Market Briefing For Friday, April 28
Washington 'and' North Korean 'stonewalling' for sure are contributing to 'tension on the tape' as we approach another politically stressed, as well as militarily-daunting, weekend. However, market performance may vary as a result of new hype emanating from a few FANG-type earnings, viewed by of course the cheerleaders, as being 'red-hot'.
Of course strong Quarterly results (above conservative guidance that we've suggested many companies were using so they could meet-or-exceed with little trouble) don't create a hot-streak; they reward those who bought many months ago primarily; with any entering 'after-the-fact' exposed to rising risk though very few analysts or pundits will acknowledge that until after the run.
Whether it's Alphabet (GOOGL) or Amazon (AMZN) or others, you've got a bit of fuel for resumption of blow-off characteristics. Notice that the move is not particularly broad, and that here and there hints of breadth separation (between the core big-cap leaders and the also-ran) starts to appear. We'll not dignify the ridiculous argument about which of those two above are the ones to buy; as neither is a particular value now, or especially at near-term higher prices.
Same might be said about Apple (AAPL), where nobody will address the market-share deterioration in China for-instance; although I've never been bearish on Apple for other than short-term pullbacks, in over 15 years. (Yes we had two great shorts and a few great long ideas on Apple; for traders; while for investors buying the purges was the idea; and like now, we'd not buy into surges for any of these stocks; and lighten-up into others doing so, if one needs to build cash to take advantage of serious correction risks.
In the short-run (daily) traders are focused on these 'big Quarters' for such stocks, and not the overall micro OR macro conditions beyond impact these near-term so-called leaders have. Perhaps they might glance at what they'll now dismiss as 'old-tech' companies; like Microsoft's (MSFT) revenue miss or Intel's (INTC) softer revenue. Yes stocks will go opposite knee-jerk first reactions, but that's not the point. It's not bargain day with May on the way.
What's driving this is the multifaceted factors dominating technology; and of course a reticence to invest where there's an impact from lower investment in software and so on. Generally our concern isn't about lower spending by a lot of firms, but more about semi-parabolic behavior in the major Indexes.
The shift of focus back to the health of Corporate America is valid for just a New York moment here; as with long-awaited tax-reform seemingly in-play (it will take many months to truly come together; but it's a work-in-progress) and perhaps a 'glimmer' suggesting to me there will not be immediate 'war' with North Korea, there just might be breathing space to get new highs first, and then we can have our correction.
The 'glimmer' is barely detectable, but North Korea 'invited' the first Human Rights representative from the United Nations 'into' the hermit fiefdom, for the purpose of apparently exploring discrimination against the Handicapped. Yes that sounds odd (for a country that blasts those out of favor with showy antiaircraft guns to make a public point); but who knows; they're crazy in a way; and perhaps they wish to open an avenue this way; as contrasted to a (slightly cynical) view that they would rather disable the UN Representative.
Bottom-line:
After Wednesday's tax-plan roiling we got a fairly sanguine or erratic Thursday, which swung a lot, but wasn't a serious down-up-down or bearish session technically. Had it been we'd be more concerned near-term.
Disclosure: None.