It's now looking like yesterday's breakout attempt by the NASDAQ may have been the bulls' last hurrah for a while. By the end of the day the rally had failed and overnight markets have reversed course to the downside. NASDAQ futures are down 0.6% compared with a 0.4% decline for Dow futures. European markets are also under pressure this morning with the FTSE down 0.8% and the Dax down 1.0%.
Traders continue to view earnings reports as chance to exit long positions rather than add to them. Positive reports haven't generated much excitement and overall reports so far this week have been more mixed.
Last night Apple beat the street by a penny on earnings but overall sales were below expectations. The iPhone 7 launch appears to have gone fairly well. IPhone sales beat expectations in the quarter while other products disappointed. Apple refused to disclose iWatch sales suggesting a failed product and making Apple look increasingly like a one trick pony.
Apple guided next quarter sales above street expectations but it remains to be seen it it can capitalize on Samsung's problems or if it's market share has peaked. Google's results tomorrow may give a better idea. Traders took Apple's results as neutral to slightly disappointing as it's shares and the NASDAQ fell in aftermarket trading.
Crude oil has been selling off overnight with Brent and WTI dropping 1.2%. API inventories rose 4.8 mmbbls reversing some of the recent declines. OPEC speculation lingers in the background with Russia apparently favouring a freeze rather than a cut. WTI may be active through the morning around DOE inventories. Whichever direction it exits its current $49-$50 range could set the trend for coming days.
Today brings more earnings reports headlined by Boeing in the morning and Tesla Motors in the afternoon. Twitter could also be active today with the potential for more takeover rumours and speculation ahead of tomorrow's earnings report which it moved up to the morning from the usual afternoon time.
Boeing $2.81 vs street $2.61, raises 2016 guidance to $6.80-$7.00 including a $0.70 per share tax benefit from $6.10-$6.30
Garmin $0.75 vs street $0.54, raises 2016 EPS guidance to $2.65 from $2.50
US API crude oil inventories 4.8 mmbbls
Australia Q3 consumer prices street 1.1% vs previous 1.0%
Italy retail sales street 0.5%
Upcoming significant economic announcements include:
8:30 am EDT US advance goods trade balance street ($60.5B)
9:45 am EDT US flash service PMI street 52.5
10:00 am EDT US new home sales street 600K
10:30 am EDT US DOE crude oil inventories street 2.0 mmbbls
10:30 am EDT US DOE gasoline inventories street (1.0 mmbbls)