Overexposed
Another earnings warning, this time from the world’s
biggest seller of film, battered Dow futures
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performance Tuesday by financial and tech bellwethers IBM
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the situation, forcing the DJZ0 to nearly double its losses after the session’s
half-way mark.Â
Eastman Kodak joins a
parade of blue-chip companies that have warned quarterly earning will fall short of
expectations in September. Kodak (EK) fell as much as 20% due to
the negative surprise, a percentage in line with the 20% to 24% trouncings
Intel
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expectations.Â
Dow futures gapped lower and never substantively broke below their opening range. The contract also registered on the Implosion-5
List and the Pullback
From Lows List, from which they made good on a (Cooper) 1-2-3-4
pullback-off-lows setup and closed 201.0 at 10,735.
A positive ruling from the Supreme Court boosted Microsoft, which tagged a 22-month low early in Tuesday’s session before closing 2.35% higher. Microsoft’s rise prevented a blood bath in Dow futures and acted to restrain the fall in NASDAQ 100 futures
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PowerRating) and the S&Ps
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PowerRating), which closed 57.50 and 18.00 lower, respectively. A Washington state appellate court was ordered by the Supreme Court to hear a challenge to a recent breakup order of the world’s biggest software firm. The news is viewed as favorable because it will allow Microsoft to, at once, focus on software sales, shape the issues of the appeal, and potentially disqualify the judge who ordered the breakup.Â
European currency futures rallied on the threat of
another intervention to support the beleaguered euro. One of the “Es”
of the overexposed “four Es”–energy, the euro, earnings, and the
economy–the weak euro has become one of the scapegoats of firms with
international revenues who have failed to hedge their exposure. Although the
euro is higher, a serious sign of trouble in Euroland is apparent.
Tuesday morning, in one of Europe’s most robust economies, France said that consumer
spending fell to its lowest level in four years. Consumer spending accounts for
as much as 66% of economic growth in Europe’s second largest economy, and signals
that a weaker euro may be justified. The December euro FX contract
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Energies ended mixed ahead of an OPEC meeting in
Venezuela to reassess global oil output. The view is that OPEC will take
measures to bring the price of oil down to the $28 target it has set for a
barrel of a basket of its crude. Heating oil
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List, was the biggest decliner in the energy complex with a .0083 loss to
.9331. Despite API reports of stockpiles 35% below levels from one year ago,
there is some speculation in the market that regional suppliers and retailers
may have ample supplies. Unleaded gasoline
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closed above its
Pullback
From Highs trigger for a .0012 gain to .8980.
Going the other way in the energies, natural gas (NGX0)
rallied out of a (Cooper) 1-2-3-4 Pullback
From Highs setup (also making good on its Momentum-5
List reading) in a move to a fresh all-time high. Demand for nat gas for
heating in the Northeast, for cooling and electricity production in the western
states, and short covering spurred the rally. However, the market spiked to a
high and pulled back, leaving a Turtle Soup Plus One Setup that could presage a
swing reversal.