Markets gapped slightly higher again Tuesday, then they proceeded to fade and end the day flat, if mildly in the green. Still, as a result, all three major indices eked out a new all-time high close on indecisive candles. The bottom line is that while the bulls maintain control, they do not show great enthusiasm.
After hours Tuesday, FEDX missed earnings estimates and lowered their 2020 guidance. This may reflect the feud with Amazon although they also blamed the impacts of China tariffs. That said, it may provide some read-through to general economic activity.
Overnight the Auto industry saw a couple deals. Fiat Chrysler and Peugeot signed a binding merger agreement. This will create the world’s fourth largest auto company. In addition, Isuzu bought Volvo’s small truck division.
Early this morning, the Mortgage Bankers Association reported that mortgage applications fell 5% last week as rates flattened out (stopped falling). However, that number of applications remains 65% higher that the same week in 2018. In addition, both GIS and CTAS reported a quarterly beat with revenues in-line with expectations.
The only major economic news for Wednesday are Oil Inventories (10:30 am). However, there will also be the House Impeachment vote (9 am), but that is not likely to be a big market-mover. The only earnings of note after the close are from MU.
Asian markets were in the green overnight. In Europe, markets are mixed, major labor strikes going on in the UK (Heath Service workers) and France (Transport workers). As of 7:30 am, U.S. futures are again mixed on either side of flat.
The Santa rally remains in place. However, we are not seeing a raging bull run, just a drift higher at the moment. This is not necessarily bad, because it slows the rate at which we get over-extended. Despite the optimism, remember that markets move in a zig-zag motion. So, the next pullback is not an “if” question, but rather a “when” question. Keep taking profits, moving stops, and trade your plans while we enjoy the Santa sleigh ride.
Swing Trade Ideas for your watchlist and consideration: ALLK, NKTR, TGT, CLR, FTCH, GT, KBH, WLL, LYB, PSX, IMMU, CHGG. Trade smart, take profits along the way and trade your plan. Also, do not forget to check for upcoming earnings. Stocks we mention and talk about are not recommendations to buy or sell.
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