Equity markets today climb back after dismal start
The Dow and S&P rose meaningfully today after an early morning falls, while the Nasdaq pared losses significantly, but still cast a pall over the U.S. market. Facebook, Twitter, Groupon, and Yahoo continued yesterday's loss setting ways, while many smaller cap internet and cloud related stocks showed weakness. The most startling collapse of the day was not in a technology related company, but in healthy food. Whole Foods Markets fell 19% after saying that heightened competition would be eating into their revenues and operating results. The markets are on a valuation edge.
Other factors today had some influence. From a positive perspective, Fed chairman Janet Yellen's comments on Capital Hill were relatively muted and boring, but she gave every indication of continuing to support the economy as long as employment levels and GDP growth fell below their targets. She does expect improved growth in this quarter, although she expressed concern about a lagging housing market. Yellen speaks again tomorrow. EPS has beat estimates of securities analysts in 75% of those companies reporting this earnings season.
Putin said that Russian troops had pulled back from the border of Ukraine, although they still remain in the immediate vicinity. He requested that two eastern provinces hold off on elections to vote on seceding from Ukraine. This is what no doubt led to a decline in gold prices, offsetting yesterday's rise. Putin's expected gambit to oppose Ukraine's May 25 elections for a new government, given the unrest in the east and in Odessa, did not happen. In fact, he endorsed the election if protections were put in place for all citizens in a new constitution. Whether everything will be to Putin's liking is unclear, but the U.S. and Kiev certainly want to go ahead. The question is whether Putin's subversion and support of dissidents in the east will accomplish what he has hoped for. With Putin's supposed pullback from the border, which Ukraine officials say they have not yet seen, Ukraine and Russian stocks rose, which hopefully is not lost on Putin and his oligarchs.
One other weight on the market may be Warren Buffett's remarks at his festive annual shareholder's meeting. While not public, reports are that Buffett feels completely comfortable with Berkshire Hathaway's results, which have not met his almost traditional market beating returns for four of the last five years. Is this complacency or wise risk taking. It certainly could signal lower returns ahead for the overall market, even as they are expected to continue to be modestly positive. This view was expressed by Yale economist Robert Schiller in a Bloomberg interview earlier in the week. Essentially, Schiller said to significantly lower one's expectations, but that an investor still must be in the equity market.
Tomorrow will be watched closely by those day to day traders, especially those focused on the momentum and growth stocks that have been leaking badly.
Other factors today had some influence. From a positive perspective, Fed chairman Janet Yellen's comments on Capital Hill were relatively muted and boring, but she gave every indication of continuing to support the economy as long as employment levels and GDP growth fell below their targets. She does expect improved growth in this quarter, although she expressed concern about a lagging housing market. Yellen speaks again tomorrow. EPS has beat estimates of securities analysts in 75% of those companies reporting this earnings season.
Putin said that Russian troops had pulled back from the border of Ukraine, although they still remain in the immediate vicinity. He requested that two eastern provinces hold off on elections to vote on seceding from Ukraine. This is what no doubt led to a decline in gold prices, offsetting yesterday's rise. Putin's expected gambit to oppose Ukraine's May 25 elections for a new government, given the unrest in the east and in Odessa, did not happen. In fact, he endorsed the election if protections were put in place for all citizens in a new constitution. Whether everything will be to Putin's liking is unclear, but the U.S. and Kiev certainly want to go ahead. The question is whether Putin's subversion and support of dissidents in the east will accomplish what he has hoped for. With Putin's supposed pullback from the border, which Ukraine officials say they have not yet seen, Ukraine and Russian stocks rose, which hopefully is not lost on Putin and his oligarchs.
One other weight on the market may be Warren Buffett's remarks at his festive annual shareholder's meeting. While not public, reports are that Buffett feels completely comfortable with Berkshire Hathaway's results, which have not met his almost traditional market beating returns for four of the last five years. Is this complacency or wise risk taking. It certainly could signal lower returns ahead for the overall market, even as they are expected to continue to be modestly positive. This view was expressed by Yale economist Robert Schiller in a Bloomberg interview earlier in the week. Essentially, Schiller said to significantly lower one's expectations, but that an investor still must be in the equity market.
Tomorrow will be watched closely by those day to day traders, especially those focused on the momentum and growth stocks that have been leaking badly.
posted by John Borden at 5:38 PM
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