MONDAY-WEDNESDAY’S ACTION: Earnings Season Fails To Impress
The market was closed on Monday in observance of the MLK holiday. Stocks opened lower on Tuesday but closed higher. The price-weighted Dow Jones Industrial Average was dragged down by shares of Travelers (TRV) and Verizon (VZ). Both stocks fell after reporting their latest quarterly results. After the close, IBM fell after their earnings were released which added further downward pressure on Wednesday.
THURSDAY & FRIDAY’S ACTION: STOCKS Smacked
Stocks fell hard on Thursday, after U.S. and Chinese manufacturing came in weaker than expected. Asian stocks fell after a Chinese manufacturing gauge fell to 49.6 from 50.5, missing estimates. Meanwhile, a euro-area manufacturing index climbed to 53.9 from 52.7 in December. Finally, U.S. manufacturing growth slowed in January, according to data released by Markit. Stocks were smacked on Friday and broke below important support as sellers continued to sell stocks into the close. A slew of emerging markets were smacked as fear spread that their economies will be hurt if China’s economy slows.
MARKET OUTLOOK: Market Pulling Back
It is important to monitor this pullback to see if this turns into another shallow pullback or something more substantial. As always, keep your losses small and never argue with the tape.