WASHINGTON, July 24, 2017 – Wall Street’s Summer of Weirdness in Monday trading action, with the Dow and the S&P getting nicked again in weak trading while the tech-heavy NASDAQ continued in resurrection mode, up 0.35 percent on the day.
The NASDAQ regular trading hours party occurred due largely to general excitement over Alphabet’s – aka Google’s – (trading symbol: GOOGL) reported increase in Q2 profits. But after the 4 p.m. closing bell, GOOGL shares suddenly sank by a negative $29.31 per share.
That big, nearly 3 percent drop in the company’s shares occurred when volatile after-hours traders absorbed the news that the tech giant’s profit numbers were actually better before they took a big hit from the Eurozone’s whopping $2.74 billion antitrust fine against the company’s European division. We’ll see what happens to tech tomorrow, given that the rent-seeking Euro-socialists are also after Apple (AAPL), charging that company effectively with tax evasion.
CNBC reports that Google was also hurt after hours when traders learned
“The drop in cost per click — the amount advertisers are paying each time a user clicks on an ad served by Google — was much higher than the 15% analysts expected, according to StreetAccount, due to more search traffic coming from mobile devices.”
Obviously, this is the week when Q2 earnings season launches. Over the next 3 weeks or so, cascades of U.S. corporate earnings will be reported nearly every day, and stocks will rise or fall based on how close earnings come to meeting or beating analyst expectations. Of course, those companies taking a swing and a miss will get clobbered horribly, as markets as a whole remain remarkably overpriced… unless those earnings prove otherwise.
Another bad sign: The McClellan Oscillator, one of our favorite short-to-intermediate term market barometers, looks like it may have topped late last week, meaning that the next direction for the market could very well be down, not up.
One more thing hanging over stocks today: the potential for market-moving news to come from the Fed midweek.
Trading Monday remained light and, to our way of thinking, fairly trendless. You can no longer make a good guess as to this market’s day-to-day movements. The bull has galloped along for longer than usual since the results of Election 2016 shocked the nation (or at least the DNC’s MSM auxiliaries).
Newtonian physics often applies in such cases. What goes up will indeed come down. We just don’t know when, but certainly don’t want to be caught napping when that happens.
Maybe we’ll get a better read Tuesday.