The Principle of Multitudes

Stock futures are up slightly in today's pre-market, following a precipitous sell-off yesterday, especially in the Dow. Myriad concerns - from North Korea nuclear testing to Hurricane Irma heading for another major American flood plain (this time Florida) - seemed to finally cause a downturn in equities trading on Tuesday.

Perhaps it was that so many concerns, which on their own never seemed to register much resistance to the overall bull market of the last 10 months, all coming at the same time - and following a holiday weekend - created a "wall of worry" in aggregate. Or maybe it has more to do with the same bell being rung over and over - such as Kim Jon-un's 6th nuke test, or the U.S.'s 2nd major hurricane to approach our shores - that finally sets traders into generating a headwind against the long-term bulls.

Hurricane Irma

Considering the coming storm for a moment, although Hurricane Harvey off the Southeast coast of Texas is already projected to be the most expensive storm in U.S. history, Irma is much bigger and faster - 400 miles in diameter with winds 185+ miles per hour - and, in fact, is now one of the biggest storms ever recorded!

So we're seeing huge runs on supplies at Home Depot HD and bottled water from companies like Coca-Cola KO for those likely to try and ride the storm out. Hopefully this will result in unnecessary stockpiles if Irma suddenly turns back out to sea, but for now preparations are for another catastrophic storm to hit later this week. Irma is already bearing down on Puerto Rico this morning.

Multitudes Building

Either way, this theory would suggest that the more we see getting in the way of a prosperous market, complete with robust U.S. labor and lower-than-expected inflation, the more we see the likelihood of pushback and thus more red closings on the main indices. For today, we're seeing a bit of a rebound ahead of the bell, perhaps the result of no new negative reports coming from North Korea or Hurricane Irma not yet making landfall in the continental U.S. to further drag stocks down.

Even President Trump and Attorney General Sessions' rollback of the "Dreamers" act - which would set about deporting 800K people currently living in the U.S. because they arrived as children undocumented - must pass through Congress before it has a material impact on our economy. Executives from Apple AAPL , Alphabet GOOGL and elsewhere sent an open letter to Trump to reconsider his position on repealing DACA, to no avail. (Then again, it's not like the president has a very good relationship with top executives these days, anyway.)

July Trade Deficit

We see better-than-expected results in July's trade balance: what was expected to ratchet up near -$45 billion has instead registered -$43.7 billion. True, we're still deep in negative territory and slightly worse than last month's -$43.5 billion, but the June read was the smallest deficit we've seen all year. Compare this with the nearly -$49 billion we saw in the first month of the year. Of course, we're still a long way from being solvent on this measure - and likely will never be, actually - but we are in better stead than we had been earlier in the year.

HPE Beats

Following a giant sell-off of more than 20% in the last 5 trading days at Hewlett Packard Enterprises HPE , shares are trading up in today's pre-market following its positive surprise in earnings and especially revenues for its fiscal Q3 2017 after the bell yesterday: earnings of 30 cents per share beat the Zacks consensus by a penny, whereas quarterly sales of $8.21 billion easily topped the $7.79 billion we had anticipated. Higher sales in its networking equipment contributed to the beat. Shares originally rose 4% on the news, and are now roughly +2.6% a half-hours before Wednesday's bell.

Mark Vickery

Senior Editor

Questions or comments about this article and/or its author? Click here>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Hewlett Packard Enterprise Company (HPE): Free Stock Analysis Report

Alphabet Inc. (GOOGL): Free Stock Analysis Report

Coca-Cola Company (The) (KO): Free Stock Analysis Report

Home Depot, Inc. (The) (HD): Free Stock Analysis Report

Apple Inc. (AAPL): Free Stock Analysis Report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.