At least 150 of S&P's 500 firms have now reported Q3 earnings and over 70% of them have reportedly beat Wall Street expectations and offered bullish guidance going forward. A fear of losing out on the spoils prompts many investors that had been on the sidelines to rush the market.
The result is a broad market rally supported by strong consolidated volume. The high volume indicates wide support for the rally. A rally with no support on the volume side isn't that credible; it usually means many investors aren't convinced there is underlying strength to sustain it. The large caps benefit the most from today's rally as the Dow comes off the leash.
The consensus on the Street is that the Fed will leave the interest rate unchanged at 5.25% on Wednesday. This outlook has already been priced into today's rally; otherwise there wouldn't be a rally. So this week more buyers should enter the market based on the good earnings momentum, unless the Fed drops some hawkish hints on future interest rate moves after the meeting on Wednesday.
EBAY, which has traded as low as $22.83 this year, is suddenly a “darling” on Wall Street. Several analysts opine that on the site core (or auction) listings, which generate more money than store listings, have indeed been on the rise since EBAY in August raised prices for store listings. Now everyone wants a piece of EBAY. It jumps more than 4% in live action. EBAY’s weight in the folio has doubled to 4%.
MSFT reports after the markets close on Thursday so investors really hold fire on the stock today. Wall Street expects MSFT to meet consensus but not top it. Regardless of Thursday’s report i think MSFT is set for a rally this quarter. Why? Windows Vista will soon be here!
3 comments:
.....what is the most important thing?
The most important thing with regard to what?
Anyway, if you refer to the market rally, then i think the most important thing was that the rally was supported by strong volume (number of shares traded).
High volume on a rally is always a good sign because it means more buyers are convinced of the market's strength. Rallies, or tumbles, without volume supports typically don’t last, all other things being equal. I define high volume as consolidated volume - Big Board (NYSE) plus Nasdaq - of over 4 billion shares traded.
On the folio front, the most important thing is that eBay right now seems to have upside momentum, and i think the stock is going to do well this quarter partly because it's been oversold for much of the year and partly because Q4 is usually their strongest quarter.
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