STTG Market Recap January 29, 2014

Well it was quite an interesting overnight session; probably as interesting as the actual U.S. market day.  After Turkey came in with a large increase in interest rates yesterday, futures jumped sharply but sold off during the overnight session.  In fact the indexes were down about 1% at the open today.  Outside of the normal volatility in the hour right after the Fed announcement at 2 PM today, the actual session today was much quieter then the overnight action.  In the end the S&P 500 fell 1.02% and the NASDAQ 1.14%.

As expected, citing a pick up in economic activity since it last met in mid-December, the Fed said it would reduce its purchases of long-term Treasuries and mortgage-backed bonds to $65 billion per month, down from $75 billion last month.

The S&P 500 remains down near recent support areas, and just above the 100 day moving average.

spx

It is worth noting the NASDAQ since we have been following this channel for well over a year now.  It has broken down below the channel for a day or two a few times in that period.  What will change this pattern?  Not breaking the channel briefly but breaking it, bouncing, but then falling back over and staying below the channel for a sustained period.  Eventually this will happen but until it does, there is no reason to anticipate it.

nasdaq

The NYSE McClellan Oscillator had a one day respite from oversold conditions yesterday but fell right back into the red band today.

nymo

It remains important to focus on emerging markets as they are the center of this selloff; on that end, another rough day.

eem

In the earnings sphere, after the close Facebook (FB) posted another great quarter, and the stock is up 12% in after hours to $60.  People will focus on mobile share, and ads served on mobile - both of which improved impressively.

Facebook delivered quarterly earnings and revenue Wednesday that surpassed analysts' expectations.  Facebook posted fourth-quarter earnings excluding items of 31 per share, up from 17 cents a share in the year-earlier period.  Revenue increased to $2.59 billion from $1.59 billion a year earlier.   Facebook said revenue from advertising came in at $2.34 billion, 76 percent more year over year, with mobile ad revenue accounting for about 53 percent of the total for the fourth quarter.  Analysts had expected the company to report earnings excluding items of 27 cents a share on $2.33 billion in revenue.  Facebook said its number of mobile active users was up 39 percent year-over-year, to 945 million as of Dec. 31, beating analysts' expectations of 919 million.

fb

Meanwhile, Yahoo (YHOO) and Boeing (BA) did not fare so well.

Yahoo Inc's online ad prices slid again in the fourth quarter and Alibaba, the Chinese e-commerce giant in which it owns a big stake, saw revenue growth decelerate from its recent rip-roaring pace.  Yahoo's overall revenue fell 6 percent in the last three months of the year to $1.266 billion, marking four consecutive quarters of eroding revenue. The company said that prices for both online display ads and search ads declined in the fourth quarter.  Yahoo's fourth-quarter net income of $348.2 million rose from the $272.3 million earned in the year-ago period. Excluding certain items, Yahoo said it earned 46 cents a share, beating the average analyst expectation of 38 cents.

yhoo

Boeing (BA) beat earnings and revenue estimates handily, but warned full-year earnings and revenue estimates will come in below analysts’ expectations.

ba