Markets were rattled today in a high volume selloff which came from several factors including falling oil prices, a weak start to earnings season, prospects for rising interest rates, the election and deteriorating relations between Russia and everyone else but Turkey. At the close the Dow had fallen 200 points to 18,128.
The third quarter earnings season is official upon us as Alcoa Aluminum today kicked off the flood of reports that will hit the wires over the next three weeks. Alcoa did not do well this past quarter posting profits and that missed expectations even though they were up 52% and revenues that also missed expectations by falling 6%. Shares of Alcoa traded off hard on the news in what is an auspicious start for Q3 results.
Many gurus are worried about the level of the stock market and should earnings fail to impress it could put downside pressure on stocks which are currently trading at a forward PE of 17 (this is a high level) and are two percentage points from an all-time high. On the flip side there remains a ton of cash on the sidelines which could act as a downside buffer.
Energy stocks pulled back today as the price of oil fell 1% to $50.79 and gold was off $5 an ounce to $1,255