Tuesday was profound in terms of data volume. I Tweeted that only the mentally strong survive the avalanche of things to rip apart as we were forced upon us. Hearts and minds were understandably in Boston and maybe nobody truly grasped the details behind the epic Monday mini-crash (there is more to it than gold being gold, I think.)
Amidst the throngs of well-paid ugly dressers that naturally predicted a Monday market meltdown on April 15, some nine months ago (awesome job!), precisely what was learned on Tuesday? A ton if you ask me, which collectively skews to maintaining a bearish viewpoint on stocks, risk appetite, etc., in the near term.
Crazy Person's List of 10
All the main credit card stocks, Discover (DFS), MasterCard (MA) and American Express (AXP) are enough off their 52-week highs to pay attention. Visa (V) is the outlier. Further, they have unperformed the S&P 500 and Dow in April.
You thought I was insane by posting an inflation expectations chart on Saturday titled: "Let's Talk Deflation." Was I really that much of a psycho when spying the March CPI? Here is a reminder!
I'll give it to Coca-Cola (KO), its quarter wasn't as meh as that of fourth quarter '12. Nonetheless, did the stock pop in response to asset reconfiguration instead of: (1) North American volume that lagged first quarter '13 GDP; (2) Flat European volume offers little confidence in industrial sector results from the region; and (3) Umm, the company did acknowledge a China growth slowdown the day after a negative surprise on that country's GDP. On a personal note, look at the four-quarter trend in energy drink volumes for Coke:
1Q13: +9%; 4Q12: +20% 3Q12: +19% 2Q12: +21% 1Q12: +25%
Goldman Sachs (GS), yeah it's the King Daddy of the IB league tables...except that investment banking backlog in first quarter '13 fell from the end of fourth quarter '12. Got steals and deals?
New stock highs have dropped hard and fast.
Peak operating margins ain't gonna cut it this time around; gross margin trends for companies thus far hinting to me lukewarm operating margins are waiting in the wings as earnings season unfolds.
Eight macro reports have surprised to the downside this month.
Specialty apparel stocks are by and large below their 10-day moving averages and fitting well with the aforementioned message emanating from credit card stocks. Target (TGT) warning, check. Concerning.
Good three-months of stuff from Grainger (GWW), although sales in March cooled versus the previous two months (confirms negative economic surprises....) Grainger's performance, however, is what you should be seeking in a high quality company this earnings season (guidance at the low-end, both sales and EPS, are raised and the top-end is reiterated.)
A market doesn't gap lower 200 points in a single session for no reason, or only one reason. Gold is a decent excuse, but I fancy the smart money is finally seeing the convergence of a bunch of negatives and choosing to lighten the carload while continuing to pitch away. Stay cautious, and don't be a pig with those winning positions.