The stock market has erased most of the early summer losses and
is now within striking distance of the spring high. While the gains
earlier on were concentrated largely in defensive and counter
cyclical stocks, the momentum seems to have broadened a bit
following the Friday jobs report. But the gains lack in conviction,
as the small caps have lagged the large-caps -- likely a reflection
that the market remains ambivalent about the economic and Fed
We will not get any clarity on those fronts given the dearth of
economic reports this week. But the clamor for more Fed support
does not seem to have died down following the July jobs report as
indicated by the Boston Fed President's interview with the
Wall Street Journal
, where he advocates for an open-ended new round of bond purchases
by the central bank.
Eric Rosengren, the Boston Fed chief, does not have a vote on the
FOMC, but his policy stance is a reflection of others like New York
President Bill Dudley and Fed vice chairwoman Janet Yellen, who do
We will get more clarity over this debate within the FOMC later
this month at the Fed's annual Jackson Hole huddle. Bernanke had
used the Jackson Hole platform in 2010 to telegraph his QE2 plans
in 2011. We will have another monthly jobs report and a host of
other economic indicators before the Fed's next scheduled meeting
on September 12 and 13th.
The Fed aside, we are in the last stretch of second quarter
reporting season, with
) on tap to report results after the close today.
Of this morning's basket of results,
) report incorporated the two key elements that we have seen
repeatedly this earnings season - two thirds of the companies have
beaten earnings expectations, but more than 60% have fallen short
on the revenue side. In fairness to CVS, however, the drug store
chain guided higher while many others have done the opposite. Beer
) beat earnings and revenue expectations this morning.
CVS CAREMARK CP (CVS): Free Stock Analysis
DISNEY WALT (DIS): Free Stock Analysis Report
PRICELINE.COM (PCLN): Free Stock Analysis
MOLSON COORS-B (TAP): Free Stock Analysis
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