Today the quiet before the storm?
Index & Sector performance 10/31/13
The Market:
Second straight down day for the S&P 500. The day was slightly more active than the closing prices might suggest as a very early up open was quickly sold down to the 1756 levels where the market bottomed around 10:30am EST and then rallied to 1768 by 2:30 pm EST. What took almost all day to gain was then lost in that last hour of trading with the S&P closing back near the earlier lows for the day at 1756. What needs to be seen is if this relatively quiet day is the end of the decline or only the calm before more storm lower.
In economic news Unemployment claims came in as expected posting 340K (341K consensus expectation) while Chicago PMI came in better than thank expected posting 65.9 when 55.1 was consensus and the previous recording was 55.7. Tomorrow we get FInal Manufacturing PMI and Total Vehicle sales along with some fed speak from FOMC member Bullard.
Story Stocks:
Facebook (FB) was a headline name today after handily beating EPS (25c vs 19c) and revenue ($2.02B vs $1.91B) estimates for Q3. Traders ultimately sold the good news and after being up nearly 16% in after hours trading after reporting, FB closed down X% for the day today. On the conference call FB executives noted a decline in teen traffic which may have had an affect on the shares. The beat still send analysts upgrading and raising targets on the name which you can see below.
Also losing on EPS was Avon Products (AVP) which missed EPS badly (14c vs 19c est) and also light on revenues ($2.32B vs $2.44B est). AVP was a name we liked on the long side and was waiting to get EPS out of the way. This could still set-up for an opportunity but will likely take some time even if it does recover.
Earnings are still driving much of the headline news and we saw two big winners for the year also report, Visa (V) and Mastercard (MA). V posted inline EPS ($1.85) while slightly missing revenue ($3B vs $3.02B) and MA beat EPS ($7.27 vs $6.95) handily on better than expected revenue ($2.2B vs $2.13B). Both stocks closed lower on the day with V losing X% and MA a much tighter loss of X%. Even with today’s action the names are still up X% and X% respectively for the year.
The following noteworthy companies are scheduled to report earnings before tomorrow’s open: CVX, NEE, BPL, NVE, GWR, MSG, CBOE, RUTH
Analyst Comments:
Upgrades 10/31/13
Downgrades 10/31/13
Initiations 10/31/13
Price Target Changes 10/31/13
The Game Plan:
Analysis on the chart below including that Long Traders should want $1740 to hold in the S&P 500 cash and also an interesting possibly swing trade set-up to the long side.
