Stocks yesterday and today have opened higher but finished lower in a sign of selling by “weak hands”. After posting a solid opening the Dow turned tail and tumbled into the close down 380 points at 25,029. Trading volume crept higher and most of the selling occurred in the final hour of trading. BTS continues to hold cash while IBD indicators have markets in rally mode.
The month of February was a wild one. After moving higher for 10 straight months which was the longest monthly streak since 1959, February proved volatile as traders took some gains and market gurus try to figure out what to expect from the new Federal Reserve Chairman Powell in terms of interest rate actions. So far Powell has indicated there will be three rate hikes and cited a strong economy moving forward. For the month of February the Dow posted a 4.3% drop which was the first down month since March of last year. For the year the Dow is up about 1.3%.
Lowe’s Home Improvement posted earnings today and while they beat sales estimates and came in a point better on same store sales growth they missed the net profit figures causing shares to “go low”. Contributing to the bottom line miss was adjustments related to the new tax law and the recent $1,000 employee bonus. CEO Robert “Nudnick” Niblock was happy with revenue trends but vowed to do better on the bottom line and to Interimproving efficiency and margins. The report shows that when you compare Lowe’s with Home Depot, the latter is running a more efficient ship.
The latest reading of US GDP growth came in at 2.5% which is down slightly from the last estimate but matched expectations. The data showed that residential investment was up but was offset by downward revisions to inventories, gubment purchases and business investment. The view for real GDP growth in 2018 remains at 3%. Consumer confidence remains at the highest level since 2000. The “Expectations Index” improved to 109.7 from 104.0.