Friends
After the close yesterday, Apple pre-announced a significant downgrade to their first quarter earnings estimate. When the world’s biggest company warns of bad news, markets tend to get a bit jittery. Stocks opened lower this morning despite a very strong ADP private payroll number, and headed lower after a weaker than expected ISM manufacturing index number. Even a big M&A deal (Bristol-Myers buying Celgene) couldn’t stir animal spirits on a day like this.
For the day, the Dow Jones Industrial Average was down 660 points to finish the day at 22,686. The S&P 500 was down 62 points to close at 2,447. Gold was up $11 to trade at $1,295 per ounce, while oil was up $.59 to trade at $47.13 per barrel WTI.
We get the non-farm payroll number tomorrow, and the consensus is that about 180,000 new jobs were created in December (of course today’s ADP number was way higher than expected, so we’ll see). As we wade into 2019, expect volatility to continue. Bear markets usually end with a series of tests. 2350 on the S&P looks to be a level that bulls would need to protect fiercely (that was the low on Christmas eve), so that will be the first line in the sand. In the meantime, now would be a good time for economic data to stop deteriorating and for Fed Chair Powell to fly like a dove tomorrow. We’ll let you know how the week ends tomorrow.
Have a nice evening everyone.
