We have another Dow stock with much better than expected earnings, and still one more with a catalyst that could re-energize a business, so how will the selloff be engineered today?
That's what it is beginning to feel like, isn't it? Charts rolling over. Gains not lasting. Sellers swarming all over the place. Will today end up being any different?
Think about it: last week we got a Disney (DIS) report which, when you back out the hurricane-hurt theme park numbers, was better than expected. But it didn't help the Dow.
Then, we had Home Depot (HD) with a much better than expected number, and it didn't help the Dow. Now there's Cisco's (CSCO) legitimately good news and Procter & Gamble's (PG) positive catalyst, but maybe that won't do it, either. How many pieces of positive news do you need before it is enough to move the needle?
OK, sure, you had the General Electric (GE) guide-down and you have Buffett drilling IBM (IBM) . But those two pieces of news aren't exactly what should move stocks lower. Buffett's sales have nothing to do with how IBM's doing. It's almost a program.
It was only revelatory at GE because of how many thought that there wouldn't be as big a guide-down as there was. That $17 price tag that I slapped on when the stock was at $20 seems to have been the right price.
I point all of this out because I do not like what's happening in the market. I have said time and again that tax reform is a non-starter, because you should not trust the congressional leadership when it says that tax reform's a done deal. Paul Ryan reassured us time and again that repeal and replace was a done deal. Over and over again, he came on television and told us that Obamacare was dead.
Oh, well. We've got our first Republican defector in Senator Ron Johnson from Wisconsin. If he gets his way, who is next? And this darned bill is being rammed through so quickly, that I am sure many House members have no idea what's even in the bill. You think they can't be swayed? When you know nothing, you have everything to lose.
What's amazing is that Speaker Ryan has any credibility at all. He could not have been more wrong about Obamacare. I am beginning to think that he will prove to be just as wrong about tax reform, especially because it isn't at all clear what the deal really is.
So, to circle back, when you get good news from Dow companies and the Dow heads down off some failure out of Washington that we should all be inured to by now, or an alleged slowdown story in Europe, you have to take the decline with a grain of salt.
Maybe every Dow stock has to report and blow away the numbers, not just the ones that have. Maybe there have to be bigger buybacks and bigger dividend boosts.
But I think that this market's just been dumb and we are going out of our way to rationalize "the action." And I am willing to shout that from the rooftops after last night's news from two huge Dow stocks, on top of all the others that have given you fabulous reports.