Earnings Season Here We Come

US Equity markets experienced their strongest week of the year, with the DJIA tacking on 5.4%, the S&P rallying 5.6% and the Nasdaq surging 6.2%.  Sentiment shifted dramatically, as investors transitioned from a period of uncertainty and fear, to an “all clear” environment where risks are now considered to be well under control.

So much for "open-ended QE driven recovery". Moments ago the March Non-farm payroll hit and it was a doozy, printing at 88K, below the lowest forecast of 100K, well below the expected number of 190K, and a tragedy compared to the February revised print of 268K (was 236K). This was the biggest miss to expectations since December 2009 and the worst print since June 2012. The unemployment rate declined to 7.6%, but this was due entirely to the collapse in the labor force participation rate, which declined by 20 bps to 63.3%, a new 30 year low.

We’re only about halfway through the Q2 earnings season, and already, we have had plenty of action with more than a few cross-currents.

Mercenary Trader submits: By Mike McDermott Earnings season kicks into high gear this week, with a number of key industry leaders releasing first quarter reports. In addition to the flood of data on individual securities, markets will also continue to handicap the ongoing antics in Washington. Republicans and Democrats have been attempting to find an agreeable approach to cutting the federal deficit.

Ralph Shell submits: There is nothing like a Friday US Non-Farm Payroll Report to re-shuffle the equity in forex accounts. Great expectations that the economy had created 130K jobs were expected but the actual number, 39K, was a downer. The unemployment rate went up to 9.8%, and the underemployed rate is now 17%. Weak economic data is gave us a lower USD as we headed to the week end.

Mercenary Trader submits: by Mike McDermott As we work our way through earnings season, there have been a number of surprises (both positive and negative) for traders to grapple with. Any trader who has been around the block a few times will tell you that the actual earnings announcement is not nearly as important as the market’s reaction to that report.

Gary Townsend submits:This morning. Equity markets are in a confirmed uptrend. Major indexes largely reversed Tuesday’s losses, closing higher on lower volume. Recent distribution days number four (on September 21st, 30th, October 15th and 19th) two for the DJI and NASDAQ, three for the SPX, and four for the NYSE composite. December SPX futures are up +7.23 points after fair value adjustment.