WASHINGTON. Mr. Market was nice to investors Friday. So it only stands to reason that he’d wake up Monday morning in a surly mood. As we head for 11:15 a.m. ET, major averages have been down all morning. But it looks as if the Dow is about to attempt a comeback. It’s only off 2.26 points (-0.01 percent) to stand at 25017.15. Plus, Amazing Amazon (AMZN) is burning up the charts this morning as the retail and cloud behemoth gears up for its 4th annual “Prime Day” discount fest. Aside from some nervousness over today’s Trump-Putin Helsinki confab, this news should help the S&P 500 and the NASDAQ.
Amazing Amazon primed for Prime Day
“Shares of Amazon hit an all-time high on Monday, while the broader stock market struggled for gains as the corporate earnings season kicked into full swing.
“Amazon rose 0.8 percent as Prime Day got under way. Sales during last year’s Prime Day surged 60 percent and reached a record.”
According to CNBC, a note from John Blackledge, an analyst for investment banking firm Cowen, reveals his expectation for “another record year” for Prime Day 2018. Elaborating on Amazing Amazon further, he wrote
“Amazon extended Prime Day ’18 to 36 hours and is available in 4 add’l countries, including WFM [Whole Foods Market] locations, and will feature more than a million deals globally. Beyond adding further revenue/GMV [gross merchandise volume], Prime Day is a key driver of Prime subs[criptions], which we view as the core driver of LT [long term] eCommerce growth.”
Standing at 1826.45 at the moment, Amazon’s already expensive shares are currently up $12.67 (+0.70 percent) on the day. We should have bought these shares 6 months ago, though chasing them now seems foolish. Amazing Amazon can’t remaing amazing forever. Can it?
Other market action
Elsewhere in markets, stocks are up, down and sideways as Q2 “earnings season” gets underway. For those new to the market, earnings season launches approximately 6 weeks after the end of a calendar quarter. That’s when a phalanx of corporate accountants emerge from their computer caves, joining with CEOs and COOs to report the previous quarter’s earnings for their respective publicly traded companies.
Thus far, the initial trickle of earnings season news – which flows unevenly for approximately 4 weeks after kickoff time – seems generally positive. However, as both Brent and WTI oil prices thankfully dipped well over $2 per barrel this morning, previously bullish investors sold off shares in that sector. This had the effect, of course, of weakening averages anyway.
Netflix’ nervous Nellies
Netflix (NFLX) also failed to help. Anticipating what could be a moderately unimpressive upcoming set of numbers from that fire-hot stock, investors sold off shares before the company reports. While these fickle investors love Netflix, at least some of the time, they refuse to believe the company is as amazing as Amazing Amazon. But lately, it has been. Whatever.
Nonetheless, analysts remain quite bullish on Q2, from a corporate earnings standpoint. The anticipated effects of the Trump administration’s tariff regime seem far off in the future at the moment. Moreover, earnings thus far in FY 2018 seem strong enough that many companies could withstand a modest hit without significantly hurting the bottom line.
Q2: Profitable enough to satisfy skeptics?
According to some estimates, Wall Street analysts expect Q2 profits, taken collectively, will advance some 20 percent. And this after Q1 profits already notched a 24 percent growth rate.
In other words, many analysts believe since earnings remain so strong, particularly in light of the recent GOP tax cuts, most companies should weather any tariff negatives quite well. Or at least that’s what those analysts think at the moment.
G7 fun. Plus, Trump and Putin meet in Helsinki
Despite the anticipated Q2 positives, headlines continue to drive the market’s mood. In this case, all eyes once again are on President Trump as he meets with Russia’s President Vladimir Putin in Helsinki, Finland.
President Trump roiled nearly everyone involved in last week’s G7 confab. He did it again at his subsequent meeting in London with embattled UK PM, Theresa May. Conveniently, DC’s Deep State contingent rose once again to club the president. Their vehicle this time: a politically timely batch of new, useless indictments against another batch of Russian spies, hackers and assorted miscreants. Just in time for Helsinki. Who knew? But it was a coincidence, of course, right?
DOJ, Deep State, throw Trump a stink bomb
Clearly, the idea for issuing these latest un-prosecutable indictments was to put Trump under pressure to be super-nasty during his meetings with Putin. The problem is, precisely zero percent of the inside-the-Beltway-#Resistance, including Mueller and Rosenstein, grasp one key bit of reality. Trump will continue to do what he does. And he’ll do so regardless of the ongoing Trump-collusion fantasy roadshow the still Obama-run DOJ and their Deep State pals choose to stage.
Unfortunately, the steady diet of fake headline antics and street theater stunts staged by disgruntled Democrat Deep Staters, hard leftists, Soros-paid agitators and MSM lackeys 24/7 does have some depressive effect on Mr. Market. That’s at least in part why we have to endure the current bipolar trading environment.
As if to emphasize this point, @markmackinnon tweeted a brief description of a stunt pulled at this morning’s Trump/Putin presser by an “accredited journalist.”
An accredited journalist was just wrestled out of the Helsinki summit press conference by security. He had made a sign that said “Nuclear Test Ban Treaty,” hoping that holding it up would get the attention of Trump and Putin so he could ask a question about it pic.twitter.com/hRHAs8XdB0
— Mark MacKinnon (@markmackinnon) July 16, 2018
More on The Nation’s fake journalist
CNBC reported key details providing context for the stunt. These details demonstrate just how low “journalists” are willing to sink to make this administration look bad. Note, BTW, how it was the Russians – not Trump – that pushed to get this stuntman ejected from the presser. (Let’s see how this story shows up in the MSM.)
“An Op-Ed reporter from the publication The Nation was forcibly removed from a press briefing between U.S. President Donald Trump and Russian leader Vladimir Putin on Monday, before the two leaders were set to take questions from the press.
“The man removed was Sam Husseini, said Vice President of Communications at The Nation Caitlin Graf. Husseini is the communications director of the Institute for Public Accuracy, a Washington D.C.-based nonprofit that promotes progressive experts as alternative sources for media reporters.
“Husseini was holding a sign that Russian authorities reportedly called a ‘malicious item.’ He had a sign that said “Nuclear Weapon Ban Treaty.”
Traders, of course, love this kind of market-roiling stuff. But investors don’t. It makes them nervous, and when they’re nervous, they sell. A lot. As a result, bulls, despite good to great earnings numbers, continue to tread cautiously, even though they’d rather not.
Today’s market action: Cloudy with a chance of thunderstorms
What should we expect from today’s market action? Aside from Amazon, it’s a battle between Q2 earnings expectations and whatever news – or fake news – emerges from Helsinki.
And remember: it’s Monday. The day is young, and you never know.#
— Headline cartoon by Branco. Reproduced with permission and by arrangement with Legal Insurrection.