Showing posts with label bond market. Show all posts
Showing posts with label bond market. Show all posts

The Earnings Solution

macys earningsThe next round of earnings for Q3 has begun and thus far investors have liked the results. I have discussed the earnings paradox in prior posts as the reported results can be very misleading when not looked into further. However, the recent trend has been: if it's better than expected, that's good enough for me. Unfortunately, even if the results ARE better than expected, companies are unsustainable if they continue to suffer profit losses, which most are.

Alcoa kicked off earnings with a favorable report which pushed markets up quite a bit. Mosaic was another company who gained favor in investor's eyes, despite suffering over a 60% loss to their revenues from a year prior. However, it still was BETTER THAN EXPECTED, so the stock rallied. Today, a handful of retailers set markets on fire by announcing favorable earnings, even though most of them still suffered losses compared to the prior year. Also, many analysts fail to keep in mind back to school shopping. Even though to most industries, the time of year means no net difference, to retail, it is one of their busiest times.

Luckily for Wall Street, not much significant economic data is being released this week, as the recent trend has shown economic indicators slowing down. Next week, we are not so lucky as there is a handful of reports that could definitely stir things up, one big one being CPI. In all this mess, I was able to find something worth buying. I picked several shares of DRV in my Zecco.com account before close as a I feel increased real estate woes should bring me some reward. With buying it, I set some strict stop losses in case of a nice Friday rally.

Bonds hit a wall today as $12 billion in 30-year bonds reach a 4.009% yield today. With the Fed obviously wanting to lessen the amount of US Treasury purchases, investors have become nervous. At the current levels, its hard to make sense at buying much anything. Insider trading remains critically high and big money is still remaining on the sidelines. We'll see what tomorrow brings. Happy Trading.

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