The markets started the week off with a pullback initially as what little news there was came in negative. The Dow 30 was held back by weakness in Boeing and closed lower by 167. The S&P 500 ultimately recovered from its losses and closed higher by 3 and the Nasdaq finished the day higher by 15.
Earnings season is slowly becoming the focus again. It is not expected to be a good one. Earnings are broadly expected to decline 4.2% for the first quarter, which would be the first contraction since 2016 for S&P 500 earnings. Investors will be looking for names to beat and also raise their forward guidance to offset the weak expectations.
Sector News
Oil continues its march forward, gaining another 2%, a new 5-month high as investors continue to price in the OPEC cuts. The price of oil has now rallied almost 40% on the year and is up about 6% just this month. Technical traders note the prior low resistance which stopped oil on a dime today when it hit earlier this morning.
Technology (XLK ) remained just off highs today with very little in the way of pressure to the downside. The tech space has rapidly moved back to all-time highs on this year's rally as investors race to participate in big tech growth names that showed relative strength on last December's market-wide decline.
Stock News
Boeing (BA ) was the big focus today as the rollercoaster ride continues, holding back the Dow as the company announced that it would be cutting production of the 737 Max back to 2014 levels. This in turn caused a downgrade by Bank of America. The plane manufacturer, which has been at the center of two deadly crashes, decided to cut back production to 42 planes a month from 52 and Bank of America says it expects production delays of 6 to 9 months.
Morgan Stanley (MS ) shares were back in the news today as the company fought back against allegations from Lyft (LYFT ) that they had participated in short selling on the ride sharing company's new listing. Morgan Stanely says they have not been involved in any marketing or execution of short selling and the company's activities have been normal in the day-to-day course of market making for the stock. Shares of Lyft moved lower again today, holding at the lower end of its range.
Wells Fargo (WFC ) shares remained in limbo today, trading inside of a very tight, two-week range. Warren Buffett, Wells Fargo's largest shareholder, suggested that the company look outside of Wall Street for their next CEO. This comes as the current CEO announced his resignation last week.
