Major averages fell yesterday on lower volume as oil took a 4% hit. That said, the Dow Jones Utility Average had another strong day as it made a higher-high. It is up 11.2% year-to-date while the NASDAQ Composite is down -7.2%, the S&P 500 is down -3.2%, and the Russell 2000 is down -6.0% year-to-date. This pronounced divergence along with the tough time the few leading stocks have had in their ability to follow-through with any reasonable gains suggests the life expectancy of this bounce may be limited.
Futures are up owing to higher oil prices and European stocks one day ahead of the European Central Bank meeting. The ECB tends to be dovish and has indicated more easy money is on the way. The ECB will deliver a policy decision on Thursday. The central bank is widely expected to push its deposit rate further into negative territory, but analysts are also betting on an expansion of the ECB’s aggressive quantitative-easing program as well as another round of cheap loans to banks. That said, the ECB could disappoint markets again, as it did in December when its rate cut and QE extension massively underwhelmed investors. European markets remain in downtrends overall as QE has yet to spark any sort of economic recovery.
This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2019 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.