Friends
For the past six weeks we have seen a pattern of lower stock prices on Monday, and then higher prices on “turnaround” Tuesdays. This morning it appeared we were going to continue the trend as stock prices moved higher at the opening and by mid-morning we had advanced almost 100 Dow points. Unfortunately, led by an earnings warning by truck engine maker Cummins Inc., stocks turned abruptly around and fell all afternoon.
By the close, the Dow Jones Industrial Average was down 83 points to finish the day at 12,653. The S&P 500 was down 11 points to close at 1341 (barely holding the 50 day moving average). Gold was down $20 to trade near $1568 per ounce, while oil was down $2 to finish trading near $83.95 per barrel WTI.
Unfortunately, earnings season is off to a precarious start. We have seen a plethora of earnings warnings over the past couple of weeks. We had not experienced this type of disappointment from corporate America in many quarters. We’ll see how stocks act after they report disappointments. If they hold steady after a day or two (once analysts issue downgrades), then we might be able to build on adjusted expectations. We’ll find out soon enough if stocks were priced correctly.
You should have received via email, our 3rd quarter outlook piece today. Let us know if you need a copy or would like us to pass a copy on to someone you know.
Have a nice evening everyone.
