Morning Market Thoughts

by DAN Good morning. Dow 30 and S&P 500 futures are down 68 and 6.25 respectively. The drop is due to several disappointing reports, such as the earnings miss reported by Goldman Sachs (GS) this morning. This Dow component is down 3%. The rest of the banks really slapped GS on their fixed income trading results. (Maybe that’s b/c all of the good traders left GS to work at the White House? (Ah, just a thought). Bank of America (BAC) is up on the news.

Housing starts fell in March, which is never good news. BUT…permits rose, which is ALWAYS good news. When a homebuilder pulls permits, it means that they are committed to spending a lot of money to build houses. So full steam ahead in the coming months.

There are still a coupld of geopolitical events that won’t go away. Kim Jong Fat is still waddling around over there, threatening to kill us all if we even twitch. He certainly looks imposing when you consider the backdrop of the North Korean people. They all look so slim. Sadly, it’s not because they all belong to a health club. Rather, it’s because they have nothing to eat. And by the looks of their fearless leader with the really really bad haircut, you know where all that food is going.

The French election is right around the corner, and France probably will have the same result as the Brexit vote last year and the Presidential election here a few months ago. Whoever wins…it’ll be a surprise! Nobody really knows how people will vote.

Netflix (NFLX) is trading up from yesterday’s close…but DOWN from last night’s post-earnings trading. So it’s really tough to predict how this stock will trade today. The gap is just not enough to stretch the rubber band to an extreme. I’d suggest being careful with this stock and avoiding any pre-determined trading plan. If you are an active trader and want to trade NFLX, just go with the flow. It might gap up a bit and then keep going…or it might gap up and then trade down through yesterday’s trading range. We just don’t know. Frankly, their numbers weren’t great. They beat earnings estimates, but the did not get the subscriber growth that analysts were expecting. If I had my druthers, I’d rather they hit their subscription estimates and missed a bit on earnings. At least they could say that their marketing costs were higher because they got so many new subscribers.

Anyway, that’s all I got this morning! Hope you are doing well, and that you are not too complacent. Remember that complacent almost rhymes with face plant. Something to keep in mind.

See you in the forum.

–Dan

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