Your Wednesday Market Blip 2/17/16

Your Wednesday Market Blip 2/17/16

Markets rallied for a third day as the Dow gained 257 to close at 16,453 on heavy volume. IBD now indicates markets are back in rally mode for the time being.

With 87% of companies in the S&P 500 having reported 2015 Q4 results, overall earnings per share showed a drop of 4% from a year earlier, making it the worst quarter for growth since the third quarter of 2009. This is according to a Bank of America report. Healthcare showed the strongest earnings reports followed by tech. Energy was the worst and large multinational exporters were hit by a strong US dollar.

The Singapore Airshow is currently underway and so far Boeing is doing “ok” as it has received a $1.3 billion order for several 737 Max jets from China based Okay Airlines. While both Boeing and Airbus project big jet demand from Asia over the next two decades the order demand for this year’s show has been soft. Analysts are speculating that big backlogs are creating long wait times for buyers plus with fuel prices so low there is less urgency to order the new more efficient jets. Meanwhile up in the Great White North (aka Canada), Bombardier announced layoffs of about 7,000 workers as the company struggles with the rollout a passenger jet designed to compete with the 737. Closer to home, Boeing lost its appeal for the bomber contract sending Northrup Grumman shares higher.

Oil prices were higher today after Russia, Saudi Arabia and Venezuela agreed to production “ceilings” tied to January levels. While Iran and Iraq are not part of the deal they appear to support the general direction of the talks which is a good thing. Analysts caution however that Iran’s primary goal is to regain its lost market share and thus does not want to be held to any production cap. Goldman Sachs noted that producers are agreeing to “freeze” production at record levels which will not change the current supply demand equation thereby allowing the continued oversupply to the markets while demand growth from emerging economies continues to soften. WTI closed the day up 5.5% to $30.63 a barrel. Gold closed flat at $1,208 an ounce.