Stocks are holding gains, but after the opening gaps higher stocks sold a good chunk of the gains, trading now just off session lows hit 45 minutes back. Indeed, SOX has turned negative. NASDAQ is not bad but it is held up by NFLX and GOOG.
SP500 7.91, 0.35%
NASDAQ 18.91, 0.35%
DJ30 20.82, 0.10%
SP400 0.02%
RUTX 0.16%
SOX -0.58%
Oil has reversed after surging upside early. Moved past $55/bbl and now is down for the day, trading below 53 (52.47, -1.25).
Perhaps it is the fact that the 155th Congress is convening, and when they are in town things tend to get mucked up. More likely it is the dollar's surge combined with on-again skepticism about OPEC's ability to hold production lower. I mean look at the list of OPEC members, a veritable who's who of cheaters.
Economic data was solid enough.
Construction, November: 0.9% vs 0.5% exp vs 0.6% October (from 0.5%)
ISM, December: 54.7 vs 52.6 vs 53.2. 21 month high. It would appear the softer sentiment reports are still showing exuberance post-election and pre any real substance.
Prices: 65.5 vs 54.5 prior
New Orders: 60.2 vs 53.0 prior
Employment: 53.1 vs 52.3 prior
Production: 60.3 vs 56.0.
We picked up some DIS earlier in the session after it tested its first move. Then even DIS started to slip even with its upgrade.
The most telling aspect of today's session is the inability to hold an early 'happy new year' move across the board. Financial, transports, semiconductors, metals, oil jumped early but are struggling. Many holding gains as noted earlier, but with the pre-year end downside that action leaves them still in the same pullback involved in to end 2016. If they cannot hold midday and reassert the early moves it could be a situation where the same action to end 2016 continues over into 2017
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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