The market was relatively quiet until the September Durable Goods number came out. A gauge for the U.S. economy, business investment was weak again. New orders for September decreased by $2.9 billion, or 1.2% to $231.1 billion. Manufacturing, which accounts for about 12% of the US economy, has been hit by a strong dollar and large spending cuts in the energy sector. In addition, the slowdown was aided by an attempt by businesses to reduce inventory and weaker global demand.
Excluding transportation, new orders decreased 0.4 percent. But August numbers were revised down 3.0 percent. This marks two consecutive months of declines. This read adds more support to the camp that believes the Federal Reserve will not hike rates in 2015.
The earnings parade continues today. This morning we got earnings from several big firms including Merck (MRK), Pfizer (PFE), DuPont (DD), Comcast (CMCSA), Cummins (CMI), Corning (GLW), Paccar (PCAR), to name a few. Overall, earnings have been mixed, many beating on Earnings per Share, but missing revenue. Alibaba (BABA) beat, with revenues up 32%, and is up about 6% (our swing clients are currently in BABA and are up 10%). Seems like the Chinese had quite an appetite for shopping and spent 713 billion yuan, up 28%, on BABA's network.
But the big report that everyone appears to be waiting for after the bell is Apple. Not only will we see how Apple is fairing especially with its sales of the iPhone, but it may give us another read on how the Chinese economy is doing (from BABA’s earnings, seems like the Chinese consumer is indeed spending). It really is a mixed bag out there from the analyst on their expectations for Apples’ quarterly results.
Oil and Natural Gas are down yet again today, weighing on the energy sector. Gold, Silver and Platinum are all down as well. Cooper is up slightly.
The Federal Reserve began their two day session and could add to market jitters. The Dow is flirting with its 200 moving average of 17573. We are going to hold off on a new idea and see how the day progresses.