Todd Harrison: 6 Things You Need to Know for Today's Financial Markets
Information overload beats the street.
Argentina: We spoke about the peso melt yesterday, and the government announced plans to ease currency controls today. It remains to be seen how effective that will be; as it stands we're not seeing (m)any sellers of single-name emerging market CDS.
Earnings: With 24% of the S&P 500 having reported, 67% beat revenue expectations and 73% beat EPS estimates; earnings growth is growing at the second fastest rate of the last eight quarters, albeit with lagging revenues. Brick-and-mortar retail, for its part, has been the single biggest disappointment.
China: The economic data has been decidedly soft, although the Shanghai stock market has been discounting that to a degree. Once upon a time, China was the growth engine for the world and that sword swings both ways.
PIMCO: The departure of Mohamed El-Erian is fading from the news cycle; only time will tell if it produces a "Sam Zell-like" inflection point with the benefit of hindsight.
Technical Levels: S&P 1850 whack-a-moled the breakout attempt by the bulls (S&P 1800 is important support), while NDX 3600 (INDEXNASDAQ:NDX) remains stickier than a Fathead factory.
Japan: Japan is a very crowded trade, with macro funds betting on the country in some way, shape, or form. If the Nikkei (INDEXNIKKEI:NI225) breaks 15,100, a "measured move" works to NKY 13,900 as a first stop.
There are others dynamics jockeying for mind share -- civil unrest in Turkey and the Ukraine, which speaks more to social mood than tangible catalysts -- but those are the biggies. Compartmentalize the particulars and assimilate them into your forward risk profile, while understanding that perception is reality regarding where we are in the current psychological continuum.
Good luck today, and have an awesome weekend -- you've earned it!
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Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at firstname.lastname@example.org.
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