Earnings Season Starts With Disappointing Guidance

The market is under pressure again this morning, although it has come well off its early lows. The main culprits were the earnings reports from Apple (AAPL) and Motorola (MOT). Both companies beat expectations, but offered guidance well below consensus, and that hit both stocks.

Also, the ECB President made it clear that he is still concerned with inflation, which basically takes an ECB rate cut off the table. That hit the European stock markets in a big way. I'm not sure what this guy is smoking?

Oil is trading down again, around $87.40 currently. Bond yields are lower again also, with the 10-year yield down to 3.35%, and approaching some of the 2003 lows. I expect some very good refi opportunities to begin to emerge. This should help those with teaser rates lock something in, assuming they can still get credit.

Bank stocks are really outperforming for the second straight day. Wells Fargo (WFC) was up +10% this morning, and the brokers are higher as well. Homebuilders are also bucking the overall weakness, and the XHB actually looks like its breaking out.

Asian markets soared overnight, after their recent drubbing. China rose +3.1%, India gained +6.6%, and Hong Kong surged +10.7%. Can you imagine? That would be the equivalent of the Dow gaining 1280 points in one day. LOL.

long AAPL, WFC