The market has given back overnight gains ahead of the FOMC rate decision due out at 12:30ET. Also for the first time ever, Fed Chairman Ben Bernanke will hold a press conference at 2:30 following the announcement, like to discuss the Fed’s actions. Up to this point, Bernanke’s public statement have always been positive for stocks, so it seems unlikely the PC will spook investors. Some suggest he could lay the groundwork for additional quantitative easing.
The action has been hectic today, with a host of sectors selling off sharply. Perhaps the two most notable dogs today have been the oil service stocks and the fertilizers. Both sectors had been lagging, but had recently reclaimed moving averages, a bullish sign. However, both groups have gotten hit hard today. The Oil Service HOLDRs ETF (OIH) has down 1.75% today, filling a big gap up from last week.
Fertilizer leader PotashCorp./Saskatchewan (POT) is down 3.5% today already, putting in a nasty candlestick and engulfing more than a week’s worth of gains. The company reports earnings tomorrow. CF Industries Holdings, Inc. (CF) may not be the industry leader, but it has the strongest stock in the group. CF is down 1.75% today, but has held its moving averages and had a bounce that we have not seen in POT. Long-term we still believe in the ferts, but right now the action remains troubling. The earnings from POT tomorrow will be a major area of focus.
The big story in the market today, though, has to be Amazon.com, Inc. (AMZN). The company reported a big EPS miss yesterday after the close, which triggered a sharp decline after hours, but the company clarified that extra spending on cloud ventures was responsible for higher costs and the EPS miss. Amazon’s foray into the cloud sector is a bullish story for the stock, which has come to represent MUCH more than just an e-commerce platform. AMZN opened about flat today, but has rocketed higher during the session, making all-time highs up 5.7%.
The Chinese Internet stocks have been a mixed bag today. Yoku.com Inc (YOKU) has remained weak after a downgrade from Goldman, still down more than 6% despite bouncing. SINA Corporation (SINA), which was also downgraded by Goldman last week, has also sold off hard, down more than 5% on some more cautious comments this morning. The company is still a ways away from generating substantial its Weibo microblogging platform. Sohu.com Inc. (SOHU) on the other hand has escaped the wrath of Goldman and been strong most of the day after early weakness. SOHU is up 3.2$ on the day.
*DISCLOSURE: Scott Redler is long GLD, JDSU, GIGM, WFC, CIEN, JPM. Short SLV. Evan is short LULU, BHI.
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