Futures Mean Squat ... But ... February 26, 2018 -- Six More Reasons Why The Market Is Surging; And A Bonus: The Apple Page

Updates

February 27, 2018: percent of S&P 500 firms beating sales estimates highest in over a decade. 

Later, 8:08 p.m. CT: by 9:00 p.m. ET, Dow futures were down to a more believable 26 points.

Original Post

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Now, the post.

Futures mean squat. Futures for the following business day start to be seen after 6:00 p.m. Eastern Time. Generally, early in the evening, especially after a particularly good day (or bad day, I suppose) futures may remain high, which I assume is a bit of a "hangover" from the day. So, if history is a guide (using that same phrase again), we won't have a good idea for tomorrow's market until well after midnight.

But, if the futures right now mean anything ... it's going to be another huge day tomorrow.

If there is another huge day tomorrow, I think I can safely say that there will be many pundits tomorrow who will say they saw this coming -- "it always happens after a 10% correction." And, remember, we had a 10% correction. I haven't watched cable television all month (except NASCAR and some other minor exceptions) so I don't know what the buzz on Wall Street is, or what the talking heads are saying about the market now.

However, some time ago, I presented "sixteen reasons" why the market was surging then. I then followed it up with "eight more reasons" why the market would continue to surge. I then added "another reason."

I am now going to add "five more reasons" why the market will continue to surge.

• In the short run, maybe just a day or two or week or two, the tea leaves suggest a reason for buyers to buy: the volatility index is back to "zero" or some such ridiculously low number.

• The real reason for the market surge today (actually there were two and they were both related): the annual Berkshire Hathaway letter and the treacly Becky Quick-Warren Buffett interview.

• Warren Buffett gave the signal that everything was okay in the market and it was safe to buy.
• Warren Buffett said (to paraphrase) that anyone investing in bonds was an idiot; that will move a lot of money from bonds to equity.

• AAPL shares gave a clear signal that tech was back (it came close to reaching its all-time high). Note: many analysts no longer consider Apple, Inc, a tech company.

• The bond market (again, actually there were four reasons with regard to the bond market)

• First, Warren Buffett called ... well, see 2b above
• Second, when the 10-year Treasuries did hit 3% on yield, and the world did not come to an end, that calmed the market
• Third, as the market panicked with 3% yield on ten-year Treasuries (and the Dow corrected by 10%) more and more folks came out of the woodwork to tell us that "this time was different." Don't worry about the ten-year Treasury yield; we will all do just fine.
• Today, and maybe this is the other reason (the first reason being Warren Buffett's letter and treacly interview) the market surged today: the ten-year Treasury dropped back to a 2.8% yield.

• the 10% correction was really, really overdone; folks are still trying to sort that out; so now the pendulum is swinging the other way; but it's an open-book test: after every correction, there's a surge.

• percent of S&P 500 companies beating sales estimates highest in over a decade. 

So, now we have these reasons for a surging bull market:

• sixteen reasons
• eight more reasons
• one more reason
• six more reasons

The next "GDP Now" estimate comes out tomorrow. Let's see if we have yet another reason for the market to surge.

So, having said all that, what are futures right now? Hold on to your hat. Dow futures are up almost 500 points. But, as I said earlier, this is most likely a hangover from today:

I said I had no plans to watch CNBC or any television through the month of February. I have gotten so used to not watching CNBC I may continue my little boycott.

But whether I do or not, only two more days in February.

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The Apple Page

From Macrumors:

First day pre-orders for the HomePod, which became available late last month, were higher than day one pre-orders for several other smart speakers including the Sonos One and the Google Home Max in the United States.

The data was shared by NPD Group and was gathered using NPD's Checkout service, which tracks consumer purchase behavior across multiple retailers.  

HomePod beat out all other smart speaker first day pre-orders with the exception of the Amazon Echo Dot.