Market Lab Report - Premarket Pulse 7/27/16
Major averages rose yesterday on higher volume. The Federal Reserve concludes its two day meeting today at 2 pm ET. Expect a continued dovish stance. Currently, the fed funds futures market estimates the implied probability of a rate hike at today's meeting at 2.4%. It will not be until 2017 that futures puts odds of a rate hike above 50%.
Japan's Nikkei rose after Prime Minister Shinzo Abe revealed plans for a fiscal stimulus package totaling JPY28 trillion, well above prior estimates that had fiscal stimulus measures pegged at JPY20 trillion.
Central banks have no choice at this late stage to continue printing via various forms of quantitative easing. The global situation on economic and political levels continues to worsen, thus new headwinds will create further excuses why central banks must continue to print. While the loss of confidence in central banks grows, it has not yet overcome the amount of capital being printed which is finding a place in US stocks, bonds, and hard assets.
On the individual stock front, Facebook (FB) is expected to report earnings after the close. Apple (AAPL) came ahead of negative expectations last night and is gapping up this morning, as is U.S. Steel (X). Pocket pivot reports from yesterday include:
Cloud-based software maker Veeva Systems (VEEV) - pocket pivot, sales accelerating, pretax margin 26.5%, institutional sponsorship has grown since the company went public 11 quarters ago, group rank 45. VEEV gapped higher on its prior earnings report.
Semiconductor Broadcom (AVGO) - pocket pivot, earnings accelerating, sales strongly accelerating, pretax margin 40.6%, ROE 65.7%, institutional sponsorship has grown since the company went public 9 quarters ago, group rank 20.
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