Mike’s Morning Brief: A fast-break rundown of what’s going on.
Market opened higher after much of Monday’s gains were erased by Tuesday’s losses. Importantly, stocks closed well off their lows yesterday. But we have seen decliners 4 of the last 5 trading days. This Market continues its sideways action with a downward bias. It’s been correcting since hitting the new, all-time highs in February. Corrections can come with time rather than price. That’s what this feels like, a healthy consolidation before setting up for higher levels into Summer. That’s still our thesis. But we are very mindful that things can change. Geopolitics are a total wild card, but so far have been somewhat manageable. These are really challenging issues with no easy solutions. When the facts change, so do we. The French election is looming, and too early to call. Expectations are for the left leaning, pro-EU candidate to win. It sounds like the US aircraft carrier Vinson did not make its way to the Korean peninsula after all. Earnings haven’t brought the positive tone expected quite yet. IBM is weighing heavily on the DOW with its 20th consecutive Qtly revenue decline. Morgan Stanley reported a double beat, sending the stock higher. Interest rates are ticking up again, with the 10-Year Treasury yield back above 2.2%. Crude is getting lift as well. Gold has been strong the last few days, and is taking a breather in early trading. The Dollar is higher after an extended period of weakness, which is mostly mean reversion from super strength.
Have a great day.