SP 500 Technical Picture

Posted on | by Todd | Leave a Comment on SP 500 Technical Picture

The SP 500 index is at a critical juncture based on two technical price indicators. The daily chart shows that the 30-day moving average (2265.00) has now converged closely to the Daily Parabolic switch point (2263). The low of the day in the SP 500 futures today was 2263.25.

The significance of this convergence is that it often time signals a change in medium-term directional momentum. In this case, the SP 500 hasn’t posted a close below the 30-day moving average since November 7th at 2130.00.

Considering how the SP 500 price has now extended beyond forward expectations of inflation and 12-month EPS levels, a decisive break of 2263.00 will likely trigger range extension to the downside. The December 30th low of 2225.00 is the first level of downside support.

S&P 500 Update

Posted on | by Todd | Leave a Comment on S&P 500 Update

The Standard and Poor’s 500 index is a widely followed indicator of the general direction of the US stock market, and by extension, global equity markets.

The reason for the wide following is clear. The S&P 500 comprises 505 common stocks and covers 80% of the American equity market on a capitalization basis.

However, so far this year, the S&P 500 index has had wide intra-day ranges but has gone practically nowhere. It finished the fist week of the year near 2277 and at 2275 in the second. It finished last week near 2274.

The technical indicators are not generating clear signals with the 30-day moving average being tested over the last 4 sessions but not broken.

The prospects of business-friendly policies from the Trump administration may be helping to support the market , while fear that much of the good news has already been discounted in the market has tempered enthusiasm for new buyers.

It’s our view that this indecision pattern will be resolved as the US earnings season moves into its second full week. At this point, the risk remains asymmetrically to the downside on weaker earnings reports, versus the upside potential on better-than-expected reports.

FedEx Earnings

Posted on | by Todd | Leave a Comment on FedEx Earnings

Shares of FedEx are down 3% at $192.80 in after market trade as the parcel delivery giant fell short of fiscal Q2 earnings estimates after the NY close today.

FedEx announced Q2 earnings of $2.80 per share on revenue $14.9 billion, while the market was expecting earnings of $2.90 with revenue climbing to $14.95 billion.

Total operating margin shrank to 7.8% from 9.1% a year ago, due to the FedEx “Ground” unit’s network expansion and increased purchase transportation rates, as well as higher IT expenses. Looking forward, adjusted FY 2017 earnings are still seen in the $12.00 to $12.25 range.

On balance, FedEx has offered good shareholder value this year climbing over 25% since January. We would expect to see buyers at, or around, the initial support area of $173.00