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MV Weather Report: Earnings Leaders Shine on Bulls


Rain or shine, we review the day's biggest stock stories.


It was a big day for the bulls as investors cheered earnings reports from Dow companies 3M (MMM), McDonald's (MCD), and Travelers (TRV).

The S&P 500 finished green for the day, closing higher by 1.04% to 1092 closing right at the high of the day. It wasn't all roses for the bulls today; the market opened lower and then found a bottom at 1074.

Professor Jeff Macke has been a McDonald's shareholder for quite some time, and today on the Buzz and Banter he told readers what he's doing with his shares.

"So, there I was all surly and mulling ways to write about the Czar without swearing when, as lovely as John Gacy's velvet clown paintings, my long time pal and holding, Chicago based McDonald's came out and did just what I was hoping would happen when they reported, (making a religious gesture to ward off evil spirits of Hope Trading) . They beat rather nicely and did so thanks to the non-benign neglect of the dollar. You see, multinationals like a weak dollar for two significant reason. One, it makes the goods they are selling overseas seem relatively cheap. Two, companies like Micky-D's can hold the revenue in foreign currency until drawing it back for earnings, where they capture the trade of the dollar falling, or try to stash the money abroad and capture even more of the dollar falling.

"With the move towards $60 I've sold a Super Sized percentage of my McDonald's this morning; leaving me with a token long position. Why bother? Because having a long position of any size keeps MCDs on my radar and I don't want to be caught unawares if the stock pulls back. I'd like to reload in the mid-50's if and when but I have to stay on my toes to get it."

Aside from the three Dow 30 companies listed above, money also flowed into the banks like PNC Financial (PNC), JPMorgan (JPM), Goldman Sachs (GS), and Wells Fargo (WFC). Today on the Buzz and Banter, Professor Smita Sadana gave her thoughts on the Banks.

"Bank ETF (KBE) is showing its love for the 50-dma. Yesterday, it was one of the key sectors to break that important support, which it hasn't done since July (the only meaningful correction that the market has encountered since March).

"This follows the housing sector that we looked at yesterday.

"Some additional observations:

"1) Check out the markedly divergent OBV. One more note posted on the proverbial wall of worry!

"2) An important trendline support lurks at $21.6."

Click to enlarge"

Light day tomorrow when we'll get existing homes sales and earnings from Microsoft (MSFT), Whirlpool (WHR), and Schlumberger (SLB).

Have a great night!

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