The S&P 500 hit a new all-time high on Monday, as the indices continue to slowly trend higher. It has been dull and unexciting action in many areas of the market but there has been strength in financials, small-caps and other sectors that have more than offset many stocks that have been doing little.
FAANG names helped after positive responses to reports from Facebook (FB) , Amazon (AMZN) and Netflix (NFLX) , but Alphabet (GOOGL) missed revenue estimates in its report and is trading down over 7.5% on the news. Google is a major component of the Nasdaq 100 (QQQ) , which is down about 0.6% on the news -- but it is not a component of the DJIA, which is trading up. General Electric (GE) , which once was a major component of the DJIA, is trading up on its earnings report and that probably is helping the DJIA a little this morning.
The big question today is whether the negative reaction to Google will impact the broader market. There wasn't a huge surge on Facebook and Microsoft (MSFT) when they reported strong earnings and there is unlikely to be a major sympathetic impact caused by Google.
Apple (AAPL) reports its earnings tonight and that is likely to prevent some major moves in front of that.
In addition, the Fed begins its two-day meeting that will culminate in its interest rate decision and press conference on Wednesday afternoon. Market players will be looking for insight into whether the very strong first-quarter GDP report will temper the Fed's dovishness. There seems to be little concern that the Fed is going to be less dovish, but there will be intense focus on Fed Chair, Jerome Powell, when he holds his press conference tomorrow.
Technically, the market remains in very good health. I've been complaining about the slowness of the action and have been hesitant to do much new buying but the trend is still upward and there are no overt waning signs.
It is very easy to be anticipatorily bearish in this environment -- and with earnings season starting to wind down and negative seasonality becoming a possible issue, it doesn't take a lot of thinking to embrace a bearish posture.
My game plan is to stay focused on managing individual positions and to stick with the up-trend as long as possible. I am having a hard time finding much I want to buy right now and will continue to be selective but I'm going to remain positive and not try to anticipate a market top.
Overall action is quite positive this morning despite the Google hit. Market players have an excuse for some negativity, but aren't anxious to embrace it.