Intraday Market Update
Stocks are sharply higher in mid-session trading on the heels of a trio of very strong earnings reports, coupled with stronger than forecasted retail sales and subdued inflation. Leaders in three key sectors - JP Morgan, Intel and CSX - set the tone in early trading, making Alcoa's mixed results from Monday a distant memory. JPM reported net income of $3.3 billion and EPS of $0.74 which beat expectations by $0.10. Intel reported EPS $0.43 which was $0.05 better than forecasts, while CSX reported EPS of $0.78 compared to a $0.69 forecast.
Overall retail sales in March jumped +1.6%, beating projections of +1.2%, and improving from February's +0.5% gain. This is signaling that consumers are pulling their weight in the economic recovery and may be turning into an engine of growth. The CPI for March was in-line with expectations, nudging up +0.1% from no change in February. This is essentially indicating that inflation is non-existent, keeping the Fed's accommodative policies alive and well. In other economic reports, business inventories rose more than forecast, while mortgage applications fell.
There are mixed messages regarding the state of the economy coming out of public and private sector leaders. Fed Chairman Bernanke testified before a House committee where he reiterated the "extended period" language and warned that there are significant restraints holding back the U.S. economic recovery. On the other hand, executives at JP Morgan said on their conference call that the firm's performance would only improve in the second half of the year, citing the likelihood of a "strong recovery." Intel's CFO said that businesses have resumed spending and said tight global demand is strengthening, although he also warned that average selling prices would fall somewhat in 2010. Hmmm.
Commodities are also doing well. Front month crude oil traded as low as $82.52 yesterday and is now trading at about $86.00 per barrel (+2.41% on the day). Gold is just below $1,160 per ounce (+0.52%), while silver is higher by +1.10%. Natural gas is higher by +2% and copper is fractionally higher by +.21%.
Essentially all international markets have joined the party and closed higher on Wednesday. In the major markets, winners were Australia (+0.87%), Korea (+1.45%), Germany (+0.76%), and London (+0.60%).
Core Sector List:
Overall reading: 13 sectors advancing, 3 sectors declining
Strongest Sectors: Home Construction, Banks, Oil Services
Weakest Sectors: Healthcare, Pharmaceuticals, Utilities
S&P 500 - Daily and 30-minute Intraday Charts:
Dow Jones - Daily and 30-minute Intraday Charts:
NASDAQ - Daily and 30-minute Intraday Charts:
Russell 2000 - Daily and 30-minute Intraday Charts: