By Shawn Langlois
The market is eerily breezing into uncharted territory on several fronts.
In fact, we haven’t had this strong a start to a new year on the S&P 500 since… wait for it… 2012!
Still, price levels are, indeed, pushing limits, with more stocks taking out annual highs on a monthly basis than ever before. (See the chart below).
Then there’s where we stand in terms of volatility. In short, we’re seeing a complacency the likes of which we rarely, if ever, encounter. Goldman Sachs says we’re heading toward record lows on the VIX, while investors are shying away from buying options that protect themselves from market declines.
What’s it all mean for the rest of the year? An “explosion of greatness,” according to Appaloosa hedge fund manager David Tepper. First thing’s first, though: a vote to extend the debt-ceiling and Apple earnings, both later today.
Key market gauges: The Nikkei JP:100000018 -1.99% took some lumps, dropping another 2.1% and extending its losing streak to three days after Japan’s central bank didn’t up the size of its asset purchases on Tuesday.
The economy: Quarterly results will steal most of the thunder, but there are some other numbers and events lining up that are worth keying in to, including MBA weekly mortgage applications, November home prices, and the IMF world economic outlook update. Also, a vote to increase the debt-ceiling is on tap for later in the day, which could help put skittish investors (are there any left?) at ease (do they need easing?).Read: Suspending the debt ceiling is a great idea. Let’s do it forever.
Though the vote appears to be a foregone conclusion, “any type of messy behavior or inconclusive action from the government has tremendous potential to derail this rally,”according to Adam Sarhan of New York-based Sarhan Capital.
Earnings: Apple AAPL +0.39%, whose results will be dissected and debated ad nauseum, is just one of many hitting the tape today. Check out Apple’s 10 best earnings days since the iPhone began on The Tell blog.
The buzz: It’s all about Google GOOG +5.10% this morning. Shares are up 5% premarket, rallying on its strong report from yesterday. “It’s cute that Wall Street works late to never guess $GOOG earnings correctly,” writes StockTwits co-founder Howard Linzon. Sure, the quarter was good, but how good? asks AllThingsD.
Other top-trending tickers include IBM IBM +3.92%, with its shares rallying post-earnings, and MAP Pharma MAPP +59.05%, which has seen a 10-fold surge in attention amid Allergan’s move to buy the company for $958 million.
Purse purveyor Coach COH -16.48% is also on the radar. Its shares are down more than 14% ahead of the opening bell on some disappointing earnings. “I just do not see the appetite for splurge on the part of the aspirational consumer,” says Brian Sozzi, chief equities analyst at NBG Productions.
The chart of the day: We all know that the market is reaching heady levels, but this chart from Michael Arold’s blog illustrates just how broad this rally has become, with a record number of stocks hitting their 52-week highs. “Not sure if the observation is bullish or bearish, but it at least supports the notion that the market enters a different domain,” he said, echoing Goldman’s message of entering a “new domain.”
The call of the day: As part of Tepper’s aforementioned Bloomberg interview, he called out Citigroup C -0.36% and its potential for a 50% jump from here. “Ask [J.P. Morgan’s Jamie Dimon] if there’s one franchise to like to buy in the whole world. Get him to be honest. He will say Citi’s foreign business. It is unique,” he said. Read the highlights from Pragmatic Capitalism.
Random reads: Google’s “happiness machine” and why you want to work there, which may or may not have to do with a huge bonus paid to the spouse of an employee who dies. Read about it from Slate.
If you’re a beautiful seductress, and Google still won’t hire you, here’s another option.
The only thing standing between our citizens and “a full scale government takeover” isthis 62-year-old man with a shotgun. And, according to numerous reports cited by The Onion, several boxes of ammunition.
Break out the hanky, here’s the latest on the sad tale of Phil Mickelson and his tax burden. Poor Lefty. At least Tiger and the New York Daily News have his back.
Behold eyelash extensions, a real hit on the Berlin catwalk.
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