Your Wednesday Market Blip 1/8/20

Your Wednesday Market Blip 1/8/20

The Blip is early today as we are in afternoon meetings which include the privilege of being stuck in traffic.

As of approx. 11:30 today the Dow was up 198 at 28,782 on heavy trading volume. Both IBD and BTS indicators remain positive.

When Iran retaliated against the US with rockets last night market futures plummeted 400 points but then recovered as the faceoff seemed to take a step back. The message from Iran was a bit conflicted as the foreign minister tweeted the missile attack concluded the festivities while the Supreme Leader suggested the games had just begun. The White House hinted that with no US casualties they were going to sit back and monitor the situation adding that intelligence sources appear to indicate Iran was taking a step back. As these events unfolded and tensions appeared to ease market action improved.

Boeing can’t seem to get a break these days after news came out that a Ukrainian 737-800 crashed while leaving Tehran Airport. Boeing shares were down on the news but early indications from Ukrainian officials suggested it was an engine failure attributed CFM International which is co-owned by GE and Safran.

US Q4 earnings reports are due to begin in earnest next week and one side effect is that US companies are required to suspend share buybacks until after they report quarterly results. This takes a big buyer off the market but on the flip side money market balances are near record levels of $3.4 trillion plus private equity firms are sitting on approx.. $1.5 trillion in cash which could also be deployed back into markets in an effort to front run companies looking to buy back stock after earnings season.