Yahoo Finance This bull market could run all summer: trader
By Alan Valdes, director of floor operations at Silverbear
It would appear the two-day rally is set to continue. What began with the first round of French elections, with wins for centrist Emmanuel Macron and far-right candidate Marine Le Pen, is getting a two-pronged earnings push today.
Caterpillar (CAT), a major Dow component, reported Q1 earnings and revenue that blew the lid off Wall Street expectations. Earnings per share came in at over twice expectations ($1.28 vs. $0.62 expected), and revenue was another strong beat ($9.822 billion vs. $9.271 billion expected).
While the fast food industry has been facing slower sales and more consumers staying home, it would seem the consumer still has an appetite for Big Macs. McDonald’s (MCD) Q1 earning per share were $1.47 vs. $1.33 expected, with a healthy revenue beat of $5.68 billion vs. $5.53 billion expected. McDonald’s—which sells 75 burgers every single second of every single minute of every single hour, seven days a week, 365 days a year—reported domestic same sales growth up 1.7% vs. an expected 0.8%.
There are about 200 major companies reporting this week. And with about 100 of the S&P 500 (^GSPC) companies already reported, early results for Q1 have been pretty strong. Seventy percent of those companies have beaten estimates and roughly 60% have beat on sales.
It’s not just the Dow (^DJI) surging higher. Today, the Nasdaq Composite (^IXIC) hit 6000 for the first time ever. Later in the week, we get another round of tech earnings from Amazon (AMZN), Google (GOOGL, GOOG) and Intel (INTC). All have the potential to push the Nasdaq even higher.
If earnings weren’t enough, tomorrow we should get the promised tax plan from President Trump. Rumors of a corporate tax rate of 15% would bring American companies from one of the highest-taxed (35%) to in line with the rest of the world. In the short term, Wall Street should embrace such a cut, though long term, we could end up with a possible $2 trillion budget shortfall over ten years.
For today, the party continues, and the bull may run all summer.
