All eyes were on the Federal Reserve today as market’s awaited the central bank’s decision on interest rates. Stocks traded higher for much of the session and pushed higher just after the release of the fed decision. Volume was slightly disappointing as it finished lower across the board. We typically see volume push higher in the wake of the Federal Reserve. The S&P 500 was able to retake its 50 day moving average despite a lack of volume pushing the index higher. Today’s session was pretty decent for the stock market as we continue to push towards month end.
Today’s session was hit with some big losers like TWTR and YELP. Regardless if you believe in the story or not these two stocks have been in serious downtrends for quite some time. It is not a surprise to us we see both of these stocks moving lower. WFM and FB are trading lower during the after-market session as well. WFM is in a long-term downtrend and should not come as a surprise. FB will be interesting as it has been a winner for this market. Tough to gauge how it will react tomorrow, but any weakness will not be a good sign for the markets.
Another indication regarding the health of the market is your portfolio. If you are constantly in winning stocks your portfolio should be an indication of the health of the markets. While today was a good day it wasn’t a great day with about half of our stocks up and half down. We certainly had positive price action from the indexes. However, once again we had laggards lead us higher. Energy and Industrials were the leading sectors on the S&P 500 both up over 1.2% for the session. Health care which has been leading this entire year was the worst performing sector today only up .23%. One could simply chalk this up to a rotation into laggards, but we are not about to guess what may or may not be happening. Follow price and cut your losses.
Tomorrow morning we will get revisions to second quarter GDP. At the moment estimates are looking for an annualized rate of growth of 2.5%. ZeroHedge will certainly point out the double counting of seasonality adjustments, but the market more than likely not care until it actually becomes an issue. The release of the number should spark the talking-heads to comment on the probability the Fed will hike rates in September.
Earnings continue to roll in and while it appears many are beating EPS estimates Revenues continue to be an issue. It is best to know when your stocks are reporting so you are not overexposed and risk a good junk of your capital. This market is full of surprises, stay tuned.
