Ticker Sense

Earnings Delivering So Far

The market had a nice run-up ahead of earnings season and driven by some preliminary positive responses.  (GS and INTC come to mind, followed not long afterwards by CAT).  Below we have extracted a chart from a premium bulletin sent out several days ago.  By slicing the earnings reports and summarizing them we can get a better picture of the broad success large cap stocks have posted this quarter.  The red line highlights the ratio of companies that beat their earnings estimate versus those that missed (companies reporting in-line are excluded).  At 5.35 this ratio is the highest since the second quarter of 2004.  

Perhaps more importantly however is the series shown by the blue bars.  These bars represent the average difference between reported and estimated EPS.  In other words, on 7/14 Goldman Sachs reported earnings of $4.93/share versus an estimate of $3.65, the difference is 1.28.  The arithmetic mean of those differences stood at $0.06 as of 7/27.  So what does this mean? analysts were too bearish and when their estimates were blown away the market rallied.

For details on the market's next catalyst try one Birinyi Associates' professional market research products, available right here on Ticker Sense.

Birinyi's Newsletter Outperforms the S&P 500 AGAIN!

Since the last publication of Birinyi Associates' Reminiscences newsletter the S&P 500 is up 8.23% and our growth portfolio is up 10.33%.  The trading portfolio underperformed, up a modest 2.33% because of conservative stop loss limits and objectives.

This month's issue includes:

• Reasons for the rally.
• Reasons why the rally recently continued. 
• The direction and what to expect over the coming months. 
• Inputs and suggestions to make you a more successful trader and investor.  

 

Click here for more information about the professional research products and services offered by Birinyi Associates.

July 27th Blogger Sentiment Poll

The bloggers are neutral leaning bullish this week.

Blogger Sentiment Poll Participants:

24/7 Wall St (N) Ahead of the Ticker (N) Carl Futia (+) Dash of Insight (+) Elliot Wave Lives On (-) In the Money  Knight Trader (N) The Learning Curve (-) MaoXian  Millionaire Now! (N) Navivest (N) Peridot Capitalist (-) StockAdvisors.com  Wall Street Folly  Wishing Wealth (+)

July Rally Has Strategists Raising Targets

Four prominent financial institutions have either raised their S&P 500 year end targets or EPS estimates this week.  Below we detail those forecasts and where the consensus for the market.  Currently the average price target is 1007 or a further 3% rally through the end of the year (firm names are available to mini-institutional clients).

For additional consensus information, including estimates for earnings (on a bottoms up and top down basis), analyst actions, sector overviews, oil and the dollar try a month of Birinyi's Mini-Institutional service for $150.

July Rally - Market Leaders

Below we highlight some of the market's leaders during the two week long rally.  These stocks may not have moved the market the most, but of the S&P 500 members that have outperformed the index the top twenty weights are shown below.  Not suprisingly IBM tops the group, but there are several other names that might not be expected.

MSFT Lower, But Buyers Beware

MSFT is down on earnings this morning and might been seen as buying opportunity.  The history however does not support this conclusion.  Since 2000 Microsoft has opened down significantly (in excess of 5%) a total of 13 times, in 9 of those instances the stock continued lower throughout the trading day.  Also shown below is the performance over the next week and several months.  The stock does not usually rally back significantly and over the next 20 trading days it is down on average versus the equivalent of today's opening.

Dow 30: Technical vs Fundamental Parameters

Below we highlight an old report with a new twist.  In the past we have shown just the technical side with our overbought/oversold indicator; now we have added information regarding the fundamentals of each stock.  Below earnings estimates for the current fiscal year of each stock are shown.  IBM, HPQ and MCD currently have the highest fundamental scores; while MSFT presents an interesting split with a high technical score and a low fundamental score.  Most stocks in the Dow are currently overbought.  

Click here for a higher quality PDF of the images below.  A description is included at the end.

Don't Expect Big Things From AAPL Today

After reporting earnings and issuing the expected weaker guidance Apple is up $5.65 versus yesterday's close.  Below we look at other positive responses to an earnings report from Apple and show that on average the stock is flat during open market trading.  This says nothing about the longer term prospects for the company, but traders looking to make a quick buck probably won't find it in Apple today as the stock has already made its move.

July 20th Blogger Sentiment Poll

Most bloggers are neutral this week, although the bulls outnumber the bears.

Blogger Sentiment Poll Participants:

24/7 Wall St (N) Ahead of the Ticker (N) Carl Futia (+) Crossing Wall Street  Dash of Insight (N) Elliot Wave Lives On (-) In the Money  Knight Trader (+) The Learning Curve (-) MaoXian  Millionaire Now! (N) Navivest (-) Peridot Capitalist (-) Smart Money Tracker (+) StockAdvisors.com  Traders Talk (-) Wall Street Folly  Wishing Wealth (+)

July 13th Blogger Sentiment Poll

Bloggers are split between bearish and neutral this week, leaning bearish.

Blogger Sentiment Poll Participants:

24/7 Wall St (-) Ahead of the Ticker (N) Carl Futia (+) Crossing Wall Street  Dash of Insight (-) Elliot Wave Lives On (-) Fallond Stock Picks (-) In the Money  Knight Trader (N) The Learning Curve (-) MaoXian  Millionaire Now! (N) Navivest (-) Peridot Capitalist (N) Smart Money Tracker (-) StockAdvisors.com  Traders Talk (-) Wall Street Folly  Wishing Wealth (-)