Art Cashin on Wall Mart – which accounted for 70 or the 250 points lost on Dow yesterday:
Walmart Goes On Sale And Takes The Dow Jones With It – Walmart reported mildly disappointing earnings. The bears, however, homed in on weak online sales performance and drubbed the stock for its worst performance in 30 years.
The early tone quickly shifted to the negative and by the time the opening bell rang, most of the 11 industry sectors in the S&P were clearly learning negative. The energy sector was the odd man out as it rose as crude firmed.
The selling was light but persistent and the weakness continued into midmorning. The bulls seemed to circle the wagons as the Dow hit 25,000 and the S&P hit 2720. What then followed looked a bit like a rally but it was more like a low volume levitation or “drift” higher.
The S&P managed to make it back into mild plus territory but the Dow came up short. As we slipped into early afternoon, it became evident to a few of us old timers that the next likely mood would be a rollover and a retest of the morning lows.
Sure enough, by 1:00, the air began to come out of the balloon. No sharp selloff but a drift lower that was the mirror image of the post-opening levitation.
By 2:45, they were set to retest the morning lows. It soon became evident that the bulls had failed to study for the test. Stocks slipped through the lows with nary a stutter. Selling accelerated a bit and by 3:15, we reached what would be the day’s lows. From there, they had a half-hearted bounce as the market on close sell indications contracted a bit.
A waste of carfare and a clean shirt.
Overnight And Overseas – In Asia, Shanghai remains closed for the Lunar New Year. Hong Kong was open and in full celebration mode, closing up the equivalent of 450 Dow points. Tokyo and India rallied far more modestly.
In Europe, markets are struggling in light volume. London is seeing fractional losses, while the dips are a shade more pronounced on the continent. Among other assets, Bitcoin has dipped back below $11,000. Gold is a shade lower after yesterday’s pronounced selloff. Crude is a bit weaker, with WTI dipping back below $62. Yields are basically flat in front of today’s auction and the release of the FOMC Minutes. The dollar is a shade higher against the euro.
Consensus – I said yesterday that certain gutsy traders called for a retest of the pullback lows. Yesterday’s action raises those odds to, maybe 35%. Watch Treasury auction and reaction to FOMC minutes. Stick with the drill – stay wary, alert and very, very nimble.