Suddenly U.S. stocks seem vulnerable

It’s not like U.S. stocks didn’t have enough to worry about today. For the day the Standard & Poor’s 500 Stock Index closed at 2136.73, off by 1.24%. That was enough to push the S&P 500 below the 50-day moving average. The index has been flirting with that support level since early September. Maybe in this context the warnings issued today by Wall Street technical analysts feel like piling on–or maybe they are exactly what they seem, that is warnings

Everything’s rallying after the Fed meeting

Yesterday, the Fed not only didn’t raise interest rates at its September meeting (a December increase gets odds of about 60%), but it also pointed toward interest rates rising more slowly in 2017 than projected in June. The Fed consensus now says two interest rate increases in 2017 rather than three. So the market got a present yesterday of lower rates for longer. Hence today’s rally

This earnings season it’s third-quarter guidance that counts

Ok, everyone knows that second quarter earnings, the earnings that companies are reporting right now, are going to be dismal. Overall earnings for the S&P 500 stocks are expected to fall 4.5% year over year. Earnings for technology stocks are expected to be even worse with a year over year decline of 7.4%. But that dismal forecast is by now old news. And a stock market that heads for new highs every day is clearly looking forward to a recovery in the third quarter