Your Monday Market Blip 1/25/16

Your Monday Market Blip 1/25/16

Stocks fell today in concert with the price of oil as oversupply continues. The Dow fell 207 to close at 15,885. Trading volume was very light which is a positive.
McDonald’s reported earnings and beat estimates as the rollout of the 24/7 breakfast has been hotter than a fresh cup of coffee. Net income gained 16% and was well above estimates while sales fell 4% due to a strong dollar affecting international results. In the US, the same store sales number was plus 5.7% which is the best in years. One item of interest is that the “Golden Arches” is planning an expansion into Russia of all places where they plan to build 60 stores in the coming year. This could well be the contrarian play of the century!
Meanwhile shares of Caterpillar were lower as Goldman Sachs today downgraded the stock to a sell. Over the past year Cat’s stock has declined from $110 to $58. The crux of Goldman's downgrade is the plunge in commodity prices affecting the mining, agriculture, and construction companies who buy from Cat and who are getting defensive in a deflationary commodity cycle.
Oil prices traded to the downside after last week’s rally. Iran, now free of sanctions and flush with cash, has reportedly purchased over 114 Airbus planes and is rumored to be about to place an order with Boeing. Gold is positive for the first time in 3 years gaining 4% so far this year. Several gurus are thinking that gold might run to $1,400 an ounce from the current level of $1,109 and off a low of $1,051 back in December. Reasons cited are a peaking of the US dollar and more demand from emerging markets looking for a hedge dollar denominated debt.