The markets are moving around like a yo-yo intraday, as the bulls and bears battle it out for control of the markets going into another big earnings week next week. Who will win the battle is anyone's guess, but the strength of the markets for the rest of January hinges primarily on the numbers coming from behemoth stocks like Amazon (AMZN), Facebook (FB), Caterpillar (CAT), Qualcomm (QCOM) and Yahoo! (YHOO) all set to report. Will they provide the necessary numbers to propel the markets to new multi-year highs?
The benchmark S&P 500 index is up 5.2 percent so far in January. The equity market's strong start this year has been attributed to solid corporate results, an agreement in Washington to extend the government's borrowing power, encouraging signs from the global economy and seasonal inflows into stocks. Those factors helped the S&P 500 rally for a seventh day on Thursday to reach a five-year peak. But the index has struggled to convincingly climb above 1,500, a level it surpassed briefly on Thursday for the first time since December 2007.
"It looks like we are encountering a little short-term resistance. The market always likes whole numbers and 1,500 seems like as good as any," said Doug Foreman, co-chief investment officer at Kayne Anderson Rudnick Investment Management in Los Angeles.
The earnings are coming in pretty good overall. Expectations had been pretty low for the quarter given the 'fiscal cliff' concerns, etc., so some of the stocks are acting pretty well even with numbers that are a little bit better than people had feared. If the S&P 500 rises for an eighth day on today, it will be its longest winning streak since late 2004, when it rallied for nine straight days. Let’s hope the bull run continues.
If you're interested in finding out which companies are set to report next week, click here for a complete earnings calendar for each day of the week: http://biz.yahoo.com/research/earncal/20130128.html. It's always good to know when companies you are invested in are set to report.
A Watchful Small Cap Eye
With many speculative small caps doing well so far this year, it's important to know which ones are worth considering and which ones are not. Here's a couple of interesting editorials on select small stocks coming from the SCN Community worth reading this week...
Bryan Murphy published an article titled, "A (Bizarre) Tale of Two Mattress Makers: SCSS Versus TPX". He breaks down the two premier mattress companies providing his opinion on which one might be the better play. When it comes to small caps, the obscure sectors and niche product companies can often yield better results than those high flying techs everyone is always so enamored with.
Murphy says, "Though no two companies are exactly alike, one would think that two companies in the same industry would be quite similar, dealing with the same problems and seeing the same upsides as one another. When it comes to mattress companies Select Comfort Corp. (NASDAQ: SCSS) and Tempur-Pedic International, Inc. (NYSE: TPX), however, one would be wrong to assume any similarities other than the obvious one - they both make mattresses. Indeed, the differences are almost confounding, beginning with their respective stocks, yet not ending with last quarter's results."
Click here for the full article.
John Udovich published an article this week titled, "Are Yesterday's Small Cap Biotech Losers Long Term Losers?" Knowing which small caps to let go of is equally as important as which ones to keep. Udovich mentions, "On Wednesday, small cap biotech stocks Arena Pharmaceuticals (NASDAQ: ARNA), ERBA Diagnostics (AMEX: ERB), Albany Molecular Research (NASDAQ: AMRI) and Impax Laboratories (NASDAQ: IPXL) all ended the day down anywhere from 7% to almost 10% for the day. Moreover, two of these stocks were also falling in after hours or premarket trading on Wednesday. So why were these small cap biotech stocks falling and more importantly, will they continue falling? Here is a quick look before you invest or start trading."
Click here for the full article.
Lastly, SCN Community Contributor, James E. Brumley, slices and dices “Wednesday's Winners (& Why): CTIC, LEE, and WLT Have Something Most Other Stocks Don't Right Now”. Brumley says, “Though futures are up again in pre-market trading on Wednesday, there's still something un-easing about the recent rally; it doesn't feel like it's built to last. Yet, there are a handful of stocks - like Walter Energy, Inc. (NYSE: WLT), Cell Therapeutics Inc. (NASDAQ: CTIC), and Lee Enterprises, Inc. (NYSE: LEE) - that look ready to keep rolling higher no matter what the broad market does from here. Take a look.”
Click here for the full article.
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