Tuesday Stock Market Recap: Equity markets fought back early weakness yesterday as broad market averages settled nearly unchanged on the day.
While investors can instinctively take Tuesday’s “push” as a win after an ugly start to the week on Monday, there are multiple headwinds facing the market as my screen is easily 75% “red” 90 minutes into the trading day.
Retailers are having a particularly challenging day, with Macy’s; M, $40.85 – 6.15, a decline of more than 12%. The catalyst here is disappointing Q3 sales and unexpected inventor issues. Macy’s has declined over 40% in the last 4 months since trading at $72.80 in mid July.
This is certainly not the kind of price action you want to see from a leader in the retail space going into the holiday shopping season.
Oil stocks are also largely in the “red” as the commodity is down over 2%. Oil has been in a $40 to $60 price range all year, and after failing to get through the $50 level last week, oil stocks have been much better for sale the last 3 days. The bigger concern is that if the commodity just can’t rally and instead makes another hard test of the $40 support level, we are likely to see another round of portfolio liquidation in secondary and tertiary oil names before the end of the quarter/year.
Multiple Stock Market Headwinds | Veterans Day 2015
NASDAQ had the best performance of the broad market averages in October, largely fueled by a sharp rally in the high beta momentum names. This rally was reinforced 2½ weeks ago by stellar earnings from GOOGL, MSFT, AAPL, AMZN and INTC sending the NASDAQ north of the threshold 5000 level for the first time since mid August.
The reports in the last couple days that AAPL is seeing lighter demand for their IPhone 6 orders has raised the caution flag for AAPL and its component suppliers. This might only mean that AAPL will sell 9 zillion rather than 10 zillion new phones, but AAPL sales not meeting stratospheric new highs is something the market is not used to.
Stay Tuned on this, as AAPL an intermediate term support level in the $116 range.
Never discount the ability of the market to act well in the face of headwinds during the waning weeks of the calendar year with annual performance numbers being front and center for every Big Dough and Hedge Fund manager.
The market can usually handle a few negative headlines this time of year, but a “piling on” of multiple issues, could raise the stakes a bit.