Although there were some major pockets of weakness the market was holding up well following earnings reports. Results from McDonald's (MCD) were particularly worrisome but Sherwin-Williams (SHW) and Harley-Davidson (HOG) prevented the "slowing economy" narrative from taking hold.
Market players were focused on stock-picking, which produced some rotational action into biotechnology, financials and a few other groups and out of software, some recent IPOs and other growth names. Small-caps held up relatively well.
The biggest challenge for traders lately has been the surprise headline news. We had to dance around to endless newsflow about China trade and then Tuesday the Brexit issue triggered a sharp, computer-generated selloff. There was also news that the Department of Justice is moving ahead with antitrust investigations to "break up" some big technology names such as Amazon (AMZN) , Facebook (FB) , etc., which accelerated the drop in the Nasdaq 100 ETF (QQQ) .
The pockets of weakness in various momentum and growth names is a concern. The indices are not reflecting it because there has been offsetting strength in Apple (AAPL) and a variety of other names. Harley-Davidson, for example, has been a laggard but the action there offsets some of the growth-stock weakness.
We have a slew of earnings reports to deal with Tuesday night and Wednesday and we'll see how well the market can digest them. The sudden drop and weak close Tuesday were not favorable but no real technical damage was done to the indices. On the other hand, there are some badly broken growth stocks that are not going to recovery too easily.
Earnings from Texas Instruments (TXN) just hit and the stock is down very sharply on the initial headlines. It looks like weak revenue guidance is the issue and that does not bode well for the broader market.
Have a good evening. I'll be on the road for a few days and will be checking in.