Bulls Still Alive
-- Market Bites --
Thursday, 21st January, 2016
Yes! – the stock market bulls still alive and are very much kicking, thankyou!
Wednesday saw the stock market wave action in full force – with the Dow Jones Industrial Average (DJIA) down more than 560 points at one point during the day, due to a global sell-off, poor blue-chip earnings, and pressure from oil prices continuing to slip. However, resilience was shown by the major indices with the Dow making a valiant late-day comeback attempt, which still ended in the red. The S&P 500 Index (SPX) shook off even heavier losses but closed down to its lowest settlement since late August. The Nasdaq Composite (COMP) traded in the black late in the afternoon, but fell back below breakeven by the end of the day.
Again, the bulls strength was displayed yesterday with the Dow Jones
Industrial Average (DJIA) adding triple digits – although it was unable to regain the 16,000 level. This improvement was helped by an oil rebound from the 12-year low previously experienced, as well as bullish remarks from the European central Bank (ECB) President, Mario Draghi, and strong earnings from the blue-chip Verizon Communications Inc. (NYSE:VZ).
The S&P 500 Index (SPX) was up 0.5%, for the day, and the Nasdaq Composite (COMP) managed to finish in the black – barely – which proves that the bulls still alive.
As at the time of writing, world stocks have recorded their biggest rise in a month and Asian stocks their best day in three months. This is thanks to hints that there will be more monetary support from the European Central Bank -- as well as a sound rebound in oil prices – with oil rallying around 5% for the second day in a row – recovering from the 12-year lows that has been experienced, and is now above $30 a barrel.
It is now likely that after Draghi's comments, and the fact that inflation is so low, that the Bank of Japan might also ease policy further next week and that the Federal Reserve will go slow in raising U.S. rates this year – which would go a long way to alleviating some of the stress, turmoil and up-in-the-air risk factors that is being experienced in the stock market, and would also go a long way in keeping the stock market bulls still alive!
A quick look at a couple of companies that will be reporting today –
• General Electric Co. (NYSE: GE) is expected to post $0.50 in earnings per share (EPS) on $36.02 billion in revenue. The same quarter from the previous year had $0.56 in EPS on $42.00 billion in revenue.
The company is expecting a boost in 2016 in the form of a massive share buyback. The GE board has authorized the repurchase of up to $50 billion in common
stock, and it is expected to cut its share count by up to 8.5 billion by 2018.
• Synchrony Financial (NYSE:SYF), a consumer financial services company and a spin-off subsidiary of GE, is looking to extend its undefeated streak of beating analyst expectations, and analysts are overwhelmingly bullish, and Stock Options Made Easy (S.O.M.E.) members will certainly be riding this wave as well.
Yet despite a market cap of more than $23 billion, which is larger than rival, Discover Financial's (DFS), many investors have never even heard of Synchrony. And that's unsurprising, given that the 83-year-old company is brand new in many ways due to its past relationship with GE.
So, there is plenty of fight left in the stock market as can be seen that the bulls still alive and are taking the bears head-on and starting to make up some lost ground!
Best of Trading,
Director of Stock Options Made Easy