Daily Market Update – February 2, 2015 (Close)
It’s good to see January over.
Even if you outperformed the market, the likelihood is that it was still a loss for the month, so that’s not too much solace. Although it’s really important to do better than the market during downturns, most people would still rather see their assets grow, even if lagging the index.
With oil still going to be an ongoing issue, as was clearly the case late Friday afternoon, as some rumors sent oil surging and momentarily took the market with it, right now there’s not much else that’s causing markets to move.
That may change if we ever start getting some evidence that all of the money that’s not being spent on energy is being spent on other things.
So far there hasn’t been too much indication of that as Retail Sales last month were less than expected and Visa and MasterCard are both saying that people are saving more and paying down debt instead of spending their newfound cash.
It will sill be another 3 weeks until the big guns of retail, such as Macys, Kohls and Target report their earnings, although Wal-Mart reports a week earlier. By the time they all report they will have had nearly 2 months of further evidence to help form their guidance for the next quarter, even as their earnings for the previous quarter may not have had much reason to celebrate decreased energy prices.
This week started with the usually unimportant “Personal Income and Outlays Report” that could show what, if any, increased consumer spending has been going on.
It didn’t though.
Consumers aren’t spending.
So all that really leaves this week is Friday’s Employment Situation Report, although it doesn’t seem as if there’s much reason to expect that those results could send markets much higher at this point. On the other hand, if decreased energy drilling activity is spreading, there could be a much less than expected increase in new jobs creation, which could take markets lower and maybe even interest rates even lower.
With last week being another week of virtually no upward movement, other than a very brief interlude on Thursday, the assignments that I thought were going to happen never did materialize.
That means that I’m not too likely to add much in the way of new positions this week and I was hopeful that the early morning’s mild move higher in the futures translated into something more meaningful. With a handful of positions set to expire this week I would love to see them get assigned, but would still be happy if at least I got to roll them over, as was mostly the case last week.
If making any new purchases this week they are probably going to use this week’s expiration, in order to have a better chance of generating assignments and resultant cash to help fund next week’s potential purchases.
For the morning I was prepared to be in a watching mode, but didn’t really expect to be in that mode all day, as the market went back and forth without any real commitment to one side or the other, although it did recover nicely from what had been an early triple digit loss shortly after the open, despite the positive futures.
The rally heading into the close was a nice change from what 2015 has been about so far this year, although it does play into the over-riding theme of going back and forth and having large intra-day swings. The only differences were that this time it was a good swing and that good swing was sustained into the closing bell for a change
After the past few weeks that have seen a nearly 5% decline despite repeated efforts to rally back, I’m not willing to simply accept that this most recent decline which has taken the S&P 500 below 2000 is going to be just as easily corrected as has been the case over the past month.
Today was one of those days that did attempt to do some repair of the past week and even of today’s earlier trading, but it will take more than today.
Any rally, if it does occur, will hopefully be an opportunity to generate some income from existing positions and keep holding on until that time comes that either energy prices start showing some rebound or GDP really does start moving higher and taking markets with it.
Today turned out to be an alright day, but not the day we were looking for.