Friends,
The markets had a lot of things to deal with today. Before the open, we got earnings from J. P. Morgan Chase which were ok, but did not really set a very good tone for the day. Bank shares had bounced nicely the first couple of weeks of the year, but this report from the nation’s strongest bank led traders to believe that reports from Citi and Bank of America next week may not justify the bounce. Then as the morning unfolded we got more confirmation on the rumors that European sovereigns would be downgraded by S&P. This is not a surprise, but when the rumors finally materialize it does weigh on the psyche of investors. The word is that France and Austria will be downgraded one notch and Portugal, Italy and Spain will be downgraded two notches. Germany will be left at AAA. On the good news front, the consumer sentiment reading was the best we have seen since May, as once again here at home, things continue to get incrementally better.
Stocks, after having a nice start to the year, struggled all day as traders, looking at a 3 day weekend, decided to stay cautious. The Dow Jones Industrial Average, after being down more than 160 points, recovered some to end the day down 49 points to close at 12,421. The S&P 500 was down 6 to close at 1289. Gold was down $9 to close at $1638 and oil was mostly flat finishing the day near $99 per barrel WTI.
Once again, on a technical basis we continue to struggle to establish a breakout pattern. We have been able to stay above 1286 on the S&P but can’t seem to get to and break through the 1300 level. After Monday’s holiday, we will get a bevy of earnings next week, which along with the never ending European saga should provide a lot of headlines for traders to deal with. We’ll see how it plays out.
The markets are closed Monday for MLK day.
Have a nice weekend everyone.
