All hail this Teflon-esque stock market.
U.S. stocks came back from a steep fall and some political disappointment to close just barely in the red Monday, though the Dow is now in the grips of its biggest losing streak since Aug. 2011.
But year to date, the Dow is still up about 4% and the SP up 4.6%, as of Monday’s close. Given that undentable quality of the market, here’s what IG’s Chris Weston is telling clients in a note Tuesday:
“It is a stretch to believe anyone has really bought into the idea that the Trump administration can really deliver on far-reaching tax reform. But what we can see is that to a large extent, it isn’t going to worry them too much either.”
“This is a Teflon market where literally nothing sticks. This seems unfortunate, as volatility provides opportunity,” he says.
Weston notes in a follow-up email how so many have called for a 5%-plus equity correction. What tends to happen, though, is that investors shrug off bad news, and everyone buys the dip at just the point when the pace of decline looks like it could pick up, he says.
“All bad news gets aggregated, and traders don’t react in any negative manner for more than one day,” he adds.
Check out: Mark Hulbert on what the Dow’s losing streak is telling us
With the long-term fuzzy, the short-term may be the place to put your focus. Our chart of the day on that topic stems from a chat Sam Stovall, chief investment strategist at CFRA, had with CNBC late Monday.
Calling the late reversal by the SP “impressive,” Stovall said the next couple of days could help map out some direction for investors. He noted one widely used indicator in technical analysis.
“My thought is we tested and bounced off the 50-day moving average [near 2,330]. We might get a day or two of opposite moves when we retest the 50-day again, and maybe it does not hold,” he said.
Here’s what that chart looks like right now:
Key market gauges
is struggling for its first gain in 9 sessions, and the SP
is modestly up. Gold
and silver are flat, while crude
is higher. Asia
bounced back, with a 1% gain for the Nikkei. Europe
is moderately higher. See the Market Snapshot column for more.
Don’t miss: I drove myself crazy by investing $3 in the stock market
The U.S. trade deficit fell sharply in February. Other data showed the Case-Shiller home-price index hitting a 31-month high. Consumer confidence is coming up.
Market direction may key off a bunch of Fed speakers headed our way. While Fed Chairwoman Janet Yellen is speaking at 12:50 p.m. Eastern in Washington, the topic is workforce challenges in low-income communities. Just ahead of that, Kansas City Fed President Esther George speaks at 12:45 p.m. Later, Dallas Fed President Rob Kaplan is due to speak at 1 p.m. and Fed governor Jerome Powell at 4:30 p.m. Aside from that, Fed Vice Chairman Stanley Fischer has an interview scheduled on CNBC between 1:30 p.m. and 2 p.m.
got a lift after an upbeat outlook on shares from J.P. Morgan on Monday. How much higher can Apple’s share price go? That’s the question posed by UBS analysts Steven Milunovich and Benjamin Wilson.
In a note, the UBS analysts explore three stock-price scenarios for Apple as it moves through cycles of business development.
Their most bullish scenario sees shares hitting $200, but they see this as unlikely. That’s because it would require Apple to post double-digit earnings-per-share growth in 2019 and carry out more aggressive share buybacks.
The least positive view sees shares hitting $125. Under this scenario, the iPhone business eventually loses steam, and new products are thin on the ground. Margin pressure then kicks in.
The winner? Milunovich and Wilson say their most likely scenario is that Apple reaches a price of $175 within two to three years, with a price/earnings ratio of 15 times. Their price target right now is $151. Here’s the chart laying that middle-ground scenario:
will invest $200 million in China Southern Airlines
and begin code-sharing later this year.
tells customers “your leggings are welcome.”
says it’s buying SOUQ.com, a big player in the Middle East e-commerce market.
factory worker is suing the electric-car maker, claiming he suffered racial discrimination, sexual harassment and threats from his co-workers. Meanwhile, Tesla CEO Elon Musk’s latest project involves linking up brains to computers.
CEO Michael Pearson is suing the drugmaker over more than 3 million company shares he says he’s owed.
Olive Garden-owner Darden Restaurants
has bought a small Texas restaurant chain for $780 million.
Check out: How the collapse of Trumpcare has created some uncertain times for health stocks.
Speaking of tax reform and infrastructure, this news outlet says the Trump administration wants to do both at once.
“This is not just dangerous; it’s embarrassing to us and our businesses on a global scale to be dismissing opportunities for new technologies, economic growth, and U.S. leadership.” — Obama EPA Administrator Gina McCarthy in a statement, according to Mother Jones.
That’s ahead of an executive order expected Tuesday from U.S. President Donald Trump to start rolling back Obama-era climate-change policies.
$1 billion — That’s how much the Trump administration wants to build a wall covering 62 miles of the Mexico-U.S. border, CNN reported, citing documents from the Department of Homeland Security.
A POTUS tweetstorm late Monday touched on Republican rebels, among other topics:
The Republican House Freedom Caucus was able to snatch defeat from the jaws of victory. After so many bad years they were ready for a win!
— Donald J. Trump (@realDonaldTrump) March 28, 2017
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