Today's reactions to earnings reports are pretty mixed, with Google being the big loser so far. I think expectations were running pretty high for GOOG to report a good quarter. So when they missed estimates by a $1, investors hit the sell button in a hurry. GOOG is down -8% so far today on a big jump in volume. We will have to see if it can recoup any of its early losses into the close.
Another stock that is taking it on the chin is ISRG, which actually beat estimates by a nice amount. GE and AXP are also lower this morning. On the plus side are IBM, MSFT, and INTC.
In economic news, existing home sales in December rose to a rate of 4.61 million units (vs. 4.55 consensus).
Asian markets were higher overnight. China rose 1.0% despite a PMI reading of 48.8 which marks the 3rd straight month the index was below the 50 level which marks the line between expansion and contraction.
The euro is lower this morning. Although there is talk of an agreement on the Greek debt issue, a colleague just told me CDS spreads are widening on Portugal to new highs, and Portugal is a much bigger issue than Greece.
The 10-year yield is finally moving above the 2.0% level to 2.01% currently. That is just above the 50-day moving average. As for the VIX, it closed below the 20 level yesterday and is currently a bit lower to 19.65 despite the market being down a bit.
Trading comment: The market could have been down a lot more following the GOOG miss and the reactions to GE, AXP, etc. So I think it is a slight positive that the market is only down slightly so far (although it is still early). I think most investors remain in dip buying mode, as many came into the year under-invested and holding too much cash. I want to focus on those companies that continue to beat estimates and lead the market. Unfortunately right now I cannot put GOOG in that category.
KAM Advisors was long GOOG and IBM