A Range-Bound Market

This is starting to look like a range-bound market. Whenever the S&P 500 gets below 2,000, it soon rallies. Yet when it gets above 2,060 or so, the index suddenly gets nervous. Sixty of the last 63 closes have been between 1,990 and 2,090. That goes back to the beginning of November.

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Perhaps the most interesting change recently has been the surge in oil. Of course, this is really coming off a very deep bottom. West Texas Crude has rallied the last three days, and it looks like it will do so again today. The spot price is back above $50 per barrel. Energy stocks have also been doing well, but again, that’s after a painful fall. Interestingly, the recent uptick in oil has not been matched by a downtick in the dollar.

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We have two earnings reports due after the close, from AFLAC and Fiserv. Shares of Ford are having a nice day after a good sales report for January. Sales rose more than 15%, but remember that this is compared with a polar-vortexed January last year. Ford got as high as $15.79 today which it hasn’t seen in two months.

Ford said its retail sales increased by 13 percent —the best retail sales month for Ford since 2004. The Dearborn automaker said passenger car sales to retail customers rose by 6 percent, utilities were up 10 percent and truck sales rose 23 percent.

Ford sold 54,370 F-Series pickups last month, up 16.8 percent in January, marking the best January for F-Series since 2004. Lincoln brand sales also jumped 10.8 percent.

I have to add that the plunge in earnings estimates is staggering. On September 30, the expectations for 2015 earnings for the S&P 500 were $136. That’s the index-adjusted number. By December 31, it was down to $131. Now it’s down to $120. For comparison, the S&P 500 probably earned about $114 last year up from $107 in 2013.

Posted by on February 3rd, 2015 at 11:37 am


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.