US Stocks remain resilient during earnings season

USA30, Daily               

The stock markets in the USA have remained resilient following the record highs at the end of January, which saw the USA 30 close over 20,000 for the first time and post an all-time high on January 27 at 20,132. Although both the USA30 and the more significant USA500 retraced some of their gains last week and yesterday was a fairly directionless day the lack of down ward movement suggests more upside potential. Today I have entered LONG positions on both the USA30 and US 500.  The initial entries were at 20,047 and 2,290 this morning with target 1 the new all-time highs at 20,134 and 2,304. Interestingly, the USA 500 target is the 14 DATR and so no target 2 will be set, whereas the USA30 has a 14 DATR that makes target 2 20,185.  The RSI and MACD are both positive and suggest further upside. Both indices are in the upper half of their respective Bollinger bands which both slope upwards.  The daily parabolic SAR remains negative, although there are signs of reversal in the USA30.  The unwinding of the “Trump Trade”, protestations from the new President and the markets impatience for details of the fiscal stimulus pacakage are all down side risks to higher US equity markets.


The earnings season is coming to an end, but there are still a number of key announcements due. So far 66.4% of the 274 S&P500 companies that have reported have revealed positive earnings news, while 20.8% have given negative surprises, with 12.8% in line, which have helped buoy the equity markets. Today includes GM (which beat expectations) Disney (after hours) and Michael Kors ( a miss), NETGEAR, O’Reilly Automotive, Penske Automotive, Pioneer Natural Resources, Plains All American Pipeline, and Zillow Group. Wednesday has Allergan, GlaxoSmithKline, Time Warner, Siemens, Rio Tinto, Whole Foods, Goodyear Tire, GrubHub, Owens Corning, and Sanofi. Thursday’s slate is full too with Coca-Cola, Kellogg, Yum! Brands, Twitter, McClatchy, L’Oreal, CVS, DTE Energy, Gannett, News Corp, Viacom, Cummins, Expedia, NVIDIA, Skechers, ThyssenKrupp, Coty, Beazer Homes, Blue Nile, VCA, Zynga, and Yelp. Finishing off the week on Friday are ArcelorMittal, FBR, Kering, and Ventas.


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Stuart Cowell

Senior Market Analyst


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