Imagine my surprise this morning when I got up, went to work, and found the market tanking. Earnings, shmearnings, the market says, or so it seems. As I write the DIJA is down triple digits and the S&P 500 is falling toward the 1860 level.

  • Smashing Earnings Overshadowed By Ukraine Concerns

Is it Putin’s unveiled threat to Ukraine that sent the market reeling, or is it Amazon predicting an operating loss? It certainly can’t be the latest data on US consumer confidence in April.

  • The final reading for the University of Michigan’s Consumer Sentiment Index for April was reported at 84.1. The reading was above the consensus for 82.6, the preliminary reading of 82.6, and also last month’s final reading of 80.0.

And it can’t be March retail sales and bank lending in the UK either.

  • Retail sales unexpectedly chalked up modest growth in March, bucking weak industry data and adding to signs that a consumer-led economic recovery is taking hold.
  • Bank lending data also pointed to improved consumer morale, showing the first annual growth in personal loans since the depths of the financial crisis.

As much as I have railed against the ratings agencies, and still do, I cannot deny that the market looks to them for guidance, or can I?

  • Ratings agencies gave a broadly upbeat assessment of the euro zone’s creditworthiness on Friday, contrasting sharply with reviews of recent years and reflecting growing confidence in the region’s fiscal and economic recovery.

UK retail sales up, Germany’s manufacturing and business confidence up, Spain, Portugal, Ireland, Greece, and Italy all selling government bonds at normalized levels again all speak to a positive global economic outlook, as do in-the-trenches numbers from large retailers.

  • Electrolux, the world’s second-biggest home appliances maker, said on Friday its European markets were finally growing again and that a recovery in the United States would continue.

Government data, analysts’ projections, and economists’ outlooks are all fine, but what really matters is the consumer here or there spending money, and that is the fact of the matter – the US consumer and consumers across both the Atlantic and Pacific Oceans are spending money.

As well, it can’t be investor confidence in the market that is taking it downhill today. That data is encouraging, given the market behavior over the last month.  

  • Investors in U.S.-based funds committed $2.6 billion to stock funds in the week ended April 23 after some strong corporate earnings drove a rebound in equities,

Maybe it is just Friday, the last day of a week that has seen some volatility in the market. Maybe everyone is tired and any effort to buy is met with doubt as to where the market is really at.

Then again, maybe Putin’s bellicose words about the “crimes” in Ukraine and his military buildup on the border of eastern Ukraine really do have the market spooked.  

Ultimately, no matter the reason for the market tanking today, unless something catastrophic happens on a global scale, such as Putin invading Ukraine or a tsunami wiping out Japan’s nuclear industry, or earnings completely collapse, the market will rebound. This then means another buying opportunity is at hand.

Yup … I dumped a couple of trades this morning for small profits just to have more cash on hand. As well, I placed some buys way down the ladder in case this roiling market gets out of hand.

Trade in the day; Invest in your life …

Trader Ed