The steady beat of this market continues to the upside. We barely are getting chances to work off extreme overbought conditions before buyers step in for a new round. Yesterday was only the second down day of this near vertical rally and buyers came right back in today. News flow continues to be light, and focused on individual earning reports. For the day the S&P 500 gained 0.33% and the NASDAQ 0.56%. There was an interesting report today on how investors are piling into margin as the market continues to elevate - we saw this happen in 2007 and of course 1999 to the extreme. It can go on for a long time of course but this is usually a longer term bearish signal.
Margin levels, or the amount borrowed to purchase securities, climbed to a new record of $401 billion in September, according to NYSE Euronext data released this week. The monthly increase of 4.78 percent was also the largest gain since January. Prior to the financial crisis, debt margins peaked at $381 billion in July, 2007, three months before the S&P 500 hit an all-time high.
Not much to add to the index analysis - the NASDAQ is near the top of this upward channel that its been in all year, while the S&P 500 is above a mini channel its been in, if it can continue to hold above that it bodes well.
We are seeing the "right" kind of leadership out there - a lot of pro growth type of stocks despite the economic data coming in very average - transportation stocks, industrials, and consumer discretionary are leading the way.
After the bell both Amazon.com (AMZN) and Microsoft (MSFT) were under the spotlight and both pleased investors. Amazon.com gained 8%+ to the $360s after it posted a narrower quarterly loss and stronger than expected sales. The stock will be at another all time high tomorrow. Microsoft gained >5% after profits came in above expectations. Microsoft is of course a major component in many indexes.
The world's largest retailer posted revenue of $17.1 billion in the third quarter, up from $13.8 billion a year earlier. Analysts had expected it to post sales of $16.8 billion on average. Net loss was $41 million in the third quarter, or $0.09 per diluted share, narrowing from a net loss of $274 million, or $0.60 per diluted share, in the third quarter of 2012.
Ford (F) rose after the automaker boosted its full-year global earnings and margin outlook, helped by an improved forecast in Europe and better-than-expected third quarter results.