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Mon Apr 19, 2010 4:02 pm Reply with quote
The markets are slightly lower on the back of continued worry about financial regulation in the aftermath of charges of fraud against Goldman Sachs Group, Inc. (NYSE:GS). In addition, a volcanic eruption spewing tons of soot in the air in Iceland has put a stop to most air travel across Europe. This is causing oil to drop sharply. Oil is down over $2.00 today and the United States Oil Fund LP (NYSE:USO) is down over 2%.
Volume seems to be subsiding today as Wall Street is now waiting for further information on Goldman Sachs. Wall Street understands that this charge is politically motivated with financial regulation on the horizon. President Obama needed a push to have enough votes to pass the strong financial regulation he wants and now he will have it.
In January, financial regulation started the correction, now it seems it could be starting it again. As a Chief Market Strategist, I am looking for a key confirmation signal. Should that happen, this market may have put in the top.
Aside from Goldman Sachs, other noteworthy news came from Citigroup Inc. (NYSE:C). They reported earnings of $.14, beating on revenues and EPS. Wall Street had expected a break even quarter.
Earnings overall have been very solid. From technology to financial firms, they have been beating on almost all counts. However, some companies have fallen on earnings. Why? Simply put, stock prices have run up since the February 5th, 2010 bottom and in many cases were sitting at new 52 week highs and in some rare cases, 2007 highs. This tells us that these stocks had already factored in the amazing earnings they have been reporting.
After the close today, International Business Machines Corp. (NYSE:IBM) is set to report. Analysts are expecting $1.94 per share while the whisper number sits higher at $2.01. It will be interesting to see how the stronger dollar over the last quarter impacted their earnings.
IBM is just warming up the tech sector for the big fish tomorrow. After the close on Tuesday, Apple Inc. (NASDAQ:AAPL) will report earnings. This will be the biggest tech stock of earnings season. Everyone is curious to see how sales have been. AAPL is hovering near all time highs as it sits under the $250.00 level. Earnings are expected to be around $2.43 per share. The whisper number is expected to be upwards of $2.75 per share.
Chief Market Strategist