Friday, April 19, 2013

Earnings


The Philadelphia Fed index was slightly weaker than expected in April at +1.3 (vs consensus +3.0), nearly unchanged from March’s +2.0. The underlying components were mixed. Leading Indicators printed slightly negative. 

In results news, EBay fell 5.9% after disp on Q1 sales with their result out after market yest, UnitedHealth fell 3.4% with some effects felt from lower Govt re-imburments, Morgan Stanely was -5.4% on a bigger than expected drop in trading revenue while on the positive end, Verizon added 2.8% and PepsiCo +2.4% on better than expected numbers. Microsoft, IBM and Google all reported its was a mixed bag here with Microsoft trading +2% on good numbers while IBM dropped 4% as they missed. Google is trading +0.6%

Notably, the continued weakness in technology has caused the sector to surrender all of its year-to-date gains. The tech space and materials are the only two sectors trading in the red this year.  These markets should be leading in a bull market, another cautious indicator that momentum is losing the market structure for continued strength.  It feels that all the outperformance in the ASX has been strictly from the financial sector.  A good trade would be short ASX financials ex REIT / long materials in the second half of 2013.  I wasn't able to short the FIX etf, trying to figure out a different way to express the trade.