FedEx profit drops worse-than-forecast 31%
Caterpillar reports 13 pct. drop in global sales for 3-month period that ended in February
Oracle Earnings Miss as Hardware Revenue Sinks
Fed Maintains $85 Billion Pace of Monthly Asset Purchases
Which one of these headlines do you think was most responsible for stocks moving higher today?
That’s a trick question because <sarcasm>clearly all four are bullish</sarcasm>. All three of these companies are in the Fortune 100 (top companies in the world by revenue). Caterpillar and Fedex are typically considered two of the most important economic bellwethers in the marketplace. Oracle announced earnings after the close of trading so I guess it doesn’t really count.
My point is this: Investors don’t care about anything other than the Fed. And they shouldn’t. They’re keeping their eye on the ball which is currently in Ben Bernanke’s court.
It just doesn’t matter if companies like these are reporting weak numbers. It matters to the economy and to jobs but not to investors. It doesn’t matter so long as the most powerful man in the world has his mind set on supporting risk assets AND investors around the world still have confidence in his ability to do so.
Bernanke has said that he intends to do so for a considerable period of time and I think we can count on that. But will investors be as resolute in their confidence in his efficacy? I think not.
Below are a couple more charts that show technical signs of deterioration in the current uptrend. I’ve highlighted the divergence between prices and momentum indicators like MACD and RSI recently. It’s also important to note that New Highs are diverging from prices, too: