Amazon and Apple results—is this where it all goes wrong for the stock market?

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Hopefully, that Dow 25,000 hat didn’t end up in the pile of things that don’t “spark joy” in your life late last year.

That is right, step away from the stock-record accessories, Marie Kondo, as a close of 25,000 and a venture beyond 2,700 for the S&P 500 look distinctly possible on the first day of February. It seems like only yesterday investors were gnashing their teeth over one festering S&P level thought to be unattainable just a few weeks ago. But now — the market has blown right past it.

“At this point, we are far enough away from 2,600 support that it will probably become the level we pull back to,” CrackedMarket’s Jani Ziedens told clients.

But when a market is this “bi-polar” — from focusing on all the negatives in December to shoving aside all that scares it at the start of the year — investors should stay on their toes, says the ever-cautious Ziedens.

“Given January’s dramatic rebound, it is clear December’s plunge was completely unwarranted. But too far in one direction often leads to too far in the other. That means there is a good chance this month’s surge higher could also be a little too far, too fast,” he says.

He thinks we might get some idea of how much legitimacy to place in the latest market rally, once the bears and emotional sellers of late last year have stopped clambering over each other to get back into the market.

Meanwhile, Wall Street is facing another thorn in its side after another market bellwether failed to meet even-lowered expectations late Thursday. Amazon














AMZN, +2.89%












may be in for its worst session since late last year as record-breaking holiday sales were obscured by a weak first-quarter growth forecast, and chatter about higher spending in 2018.

Our call of the day from Joe Rundle, CEO at Markets.com, says Amazon’s news is unsettling taken along with Apple’s downbeat results last week. While investors shouldn’t base their portfolio decisions based on one set of company results, if the investing atmosphere worsens, these earnings stumbles may be viewed as warnings just before the rot sets in, he cautions.

“It won’t cause contagion until it’s a snowball effect — markets will shrug it off. But if 2019, 2020 are going to be an awful years in the markets, I think it’s likely people will point to these moments as a warning” they should have listened to, Rundle said in a telephone interview.

They are, after all, two big U.S. companies that can single-handedly drive markets swings, and both offer valuable insight into consumer-spending habits.

Don’t miss: In the aftermath of the Fed, we’re all “data junkies” now

“Amazon is a domestic indicator for the U.S…and Apple when it did its warning, was completely focused on China,” said Rundle. In the future, he says, it isn’t too tough to imagine Apple and Amazon results even being used as “massive leading indicators.”

Expect a storm of Amazon chatter for Friday and here’s a tidy summation from Neil Saunders, managing director at GlobalData Retail, who says he’s staying positive on the retailer:

“The Prime platform still has enormous potential, there is plenty of upside in devices, and there are many opportunities to improve own-brands (some of which have underperformed). Taken together, along with AWS (Amazon Web Services), this means Amazon has scope for future growth. However, it is also clear that Amazon will now need to work doubly hard to achieve any future sales gains.”

Read: Amazon may have been putting many eggs in its Whole Foods basket.

The market

Dow














YMH9, +0.04%












 and S&P 500














ESH9, -0.12%












 futures are flat, while Amazon looks to be weighing on Nasdaq














NQH9, -0.51%












 futures. Thursday’s session closed out with gains for the S&P 500














SPX, +0.86%












 and Nasdaq














COMP, +1.37%












but a virtually flat finish for the Dow














DJIA, -0.06%











Gold














GCG9, +0.05%












 is clinging to another win, while the dollar














DXY, -0.07%












and oil














US:CLU8












are flat.

Europe stocks














SXXP, -0.22%












 are again pretty mixed. Asia was mixed, but the Shanghai Composite














SHCOMP, +1.30%












 rose despite weak manufacturing data.

Plus: Here is what the stock market’s monster January rally means for February

The chart

It’s Friday and that means time for Bank of America Merrill Lynch’s Flow Show, which is one of the best weekly assessments of market action out there.

Our chart of the day from that note zeroes in on what the bank says was record U.S. equity outflows over the past three months, to the tune of $82 billion. “Equivalent to around 2% of assets under management, i.e., consistent with U.S. equity bearishness at ‘events’ & ‘big lows’ of [the] past decade,” say the bank’s strategists, pointing to this chart:



Here’s a bonus chart of their latest bull & bear indicator, which runs on a scale of 1 to 10, with the former being extreme bearish and the latter extreme bullish. It’s sitting at 3.3 right now, so still on the buy side.



Note, the bank also says the biggest contrarian call out there right now is a Fed hike this year.

The buzz

Apart from Amazon, Symantec














SYMC, +0.96%












 reported late Thursday and is up on an earnings beat. Earnings that are rolling out Friday include Cigna














CI, +0.01%












Merck














MRK, +1.44%













HON, +0.24%












Madison Sq. Gard














MSG, +0.37%












Exxon














XOM, +1.37%












 and Chevron














CVX, +1.45%











Troubled German banking group Deutsche Bank














DB, -4.41%












 reported a profit for the first time since 2014, but revenue fell again.

Get ready for a smaller, cheaper version of Nintendo’s














7974, -9.19%












 Switch console.

Twenty tons of Venezuelan gold — worth about $850 million — are stuck in the central bank’s vault amid accusations dictator Nicolás Maduro is trying to move it to Russia or Dubai. Meanwhile, tensions are up as Venezuela opposition leader Juan Guaidó says a brutal security force threatened his family.

The economy

It’s a big data day, with nonfarm payrolls for January, the unemployment rate and average hourly earnings. The Markit manufacturing purchasing managers index, the Institute for Supply Management’s manufacturing index, along with construction outlays, consumer sentiment and wholesale inventories.

Read: Hiring probably slowed sharply in January, but not for reasons you might think

The quote

“We looked at the entire Kiss manufacturing process, and we made some adjustments to shaping the tips to allow us to have greater consistency.” — That was Hershey CEO Michele Buck explaining what caused the famous chocolate candies to lose their delicate point, in an interview with CNBC. Tip of the iceberg?

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Goodbye polar vortex this weekend, and don’t let the frozen door hit you on the way out:

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Source : MTV