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Publishing Note: I am traveling on Friday morning and will not publish a report. Daily State of the Markets reports will return on Monday.

Good morning. To be honest, I have a love/hate relationship with the current stock market environment. On the negative side, I hate the "feel" of the last fourteen days. As I've pointed out this week, nearly every session has been a struggle as the bears have not been shy about hitting the indices with sell programs early and often. And frankly, it "feels" like this market could easily succumb to the myriad of negatives out there right now and smack investors between the eyes with one of those ugly -2% to -3% days.

Yet at the same time, I love the fact that, so far at least, the bears have been kept at bay. While it seems hard to believe given the negative macro backdrop, the S&P closed Wednesday just a smidge over 1% below its cycle high for the current 3.5 year-old bull market. I will also admit to loving the fact that both the intermediate- and long-term trends are positive at this point, and that the important near-term support levels have held up so far. Oh, and I am still pretty happy that our Market Environment model gave us a buy signal on July 26th.

Finally, while I do indeed hate these consolidation phases, I also love listening to the "experts" offer up their opinions on why the market isn't doing much of anything at the moment and then what we should all expect next. I get a kick out of this because I turn on CNBC or go to the website and hear or read just about every opinion under the sun. One says the market is about to crash. The next says earnings are stellar and valuations are cheap! Just once I'd like to hear somebody come on CNBC or Bloomberg and say, "You know, stocks are going sideways because of all the market crosscurrents and I don't have any idea what happens next."

On that score, I am quite sure that I managed to infuriate one of my colleagues this week when I was asked about which way the market was going to head next. My response the first time he asked was, "I don't know." The second and third time the question was posed in the same conversation I tried to dodge it by reminding my longtime friend that I use market models and systems to guide my exposure and timing decisions. But failing to take the hint, I was asked for a fourth time what stocks were likely to do next. To which I replied, "Which part of 'I don't know and I don't make predictions' are you having trouble with?"

After I had had my fun, I proceeded to suggest that the global QE will continue to provide a tailwind for the bulls unless Europe threatens to implode again, anyone in Congress opens their mouths about the fiscal cliff, the economic data tanks, China's economic "landing" gets bumpier than expected, or... drum roll please... the upcoming earnings season is worse than expected.

Although earnings really don't get rolling until the week after next, it is safe to say that a fair amount of investors are sitting on their hands right now waiting on (a) Spain to raise its hand and for (b) Corporate America to tell us how things are going out there. At the beginning of June, the consensus estimate was for the S&P 500 earnings to increase by something on the order of +1.6%. As of yesterday however, FactSet says that S&P earnings growth will slip -2.6%. So, as you can see, analysts have been busy over the last few months taking down their estimates and reducing expectations.

There are two ways to look at this. The bears, of course, tell us that analysts NEVER get things right and because of the economy's summer swoon, earnings (and more importantly, revenues) will disappoint over the next couple of months. On the other hand, those who don't see the sky rocketing toward them whenever they look up are suggesting that the proverbial "bar" for earnings expectations has been pushed down pretty far for this earnings parade. Some might even say the "bar" is actually sitting on the ground at the present time.

To be sure, we will know soon enough which team has it right about the earnings season. But until then, when asked which way the market is going to head, I'll continue to say "I don't play that game" and then proceed to suggest that traders will likely continue to wait on the numbers.

Turning to this morning ... While the European markets are narrowly mixed this morning, the futures in the U.S. are moving higher - reportedly in response to Mitt Romney's strong performance in last night's Presidential debate. But there is more talk of military action in Turkey/Syria and some important economic data on tap this morning.

On the Economic front ... We get a look at the Weekly Jobless Claims, Bloomberg Consumer Comfort, and Factory Orders reports this morning. And then the minutes from the latest FOMC meeting will be released this afternoon at 2:00 pm.

Thought for the day ... You can't get much done in life if you only work on the days when you feel good. -Jerry West
Pre-Game Indicators
Here are the Pre-Market indicators we review each morning before the opening bell...
  • Major Foreign Markets:
    • Shanghai: closed
    • Hong Kong: +0.09%
    • Japan: +0.89%
    • France: +0.06%
    • Germany: -0.04%
    • Italy: -0.05%
    • Spain: -0.16%
    • London: +0.02%
  • Crude Oil Futures: +$0.56 to $88.70
  • Gold: +$12.40 to $1792.20
  • Dollar: lower against the yen, euro, and pound
  • 10-Year Bond Yield: Currently trading at 1.631%
  • Stock Futures Ahead of Open in U.S. (relative to fair value):
    • S&P 500: +6.36
    • Dow Jones Industrial Average: +60
    • NASDAQ Composite: +9.26
Positions in stocks mentioned: none
Source: Daily State Of The Markets: Waiting On The Numbers