Will Obama's Address Tonight Trigger a Massive Sell-Off?
Despite fears that tonight's State of the Union address will trigger a broad sell-off tomorrow, stocks are moving higher in afternoon trading. Roughly an hour before the closing bell, the Dow Jones Industrial Average is up by 62 points, or 0.45%.
Will Obama trigger a sell-off?
It's hard to argue that stocks haven't performed well this year. According to the free stock-screener at Finviz.com, all 30 of the Dow's individual components are higher this year, with shares of Hewlett-Packard leading the way, up by more than 18%. And the blue-chip index itself is higher by more than 4%.
All this could come to a screeching halt tomorrow, however, if one analyst's premonitions come true. Earlier today, Jeff Saut, the chief investment strategist at Raymond James, predicted that President Obama's speech tonight could trigger a 5% to 7% sell-off in stocks.
Speaking on Yahoo! Finance's Breakout, Saut said: "I think investors are going to interpret the State of the Union as a more intransigent president. And I think some of the topics he's going to bring up are going to continue to emphasize what I would term somewhat class warfare."
While anything could happen, including an asteroid potentially grazing the planet, predictions like these are entirely meaningless. It's worth noting that the Dow gained on the first trading day after the President's inaugural speech, which likely fit Saut's preconceived notions about the contents of tonight's state of the union speech.
How individual stocks are faring
In terms of individual stocks, shares of Bank of America are leading the Dow higher, followed by the index's other banking component, JPMorgan Chase . Earlier today, the consumer credit company TransUnion released data estimating that mortgage delinquencies in the fourth quarter fell by 14% on a year-over-year basis.
According to the company's group vice president of housing, Tim Martin, "The national mortgage delinquency rate experienced its largest yearly decline since the conclusion of the recession, though we still remain far above normal levels."
For the three months ended Dec. 31, the rate fell to 5.19%, down from 5.41% in the third quarter.
Conversely, shares of Coca-Cola are sharply lower in midafternoon trading following the company's fourth-quarter financial results. As my colleague Dan Caplinger noted earlier today, the beverage giant's earnings grew an impressive 13%, while its global sales volume increased by 3%.
Triggering the sell-off, however, was the fact that its soda volume continued its decline. As Dan observed, this trend "reinforced concerns that Coke's namesake segment may have seen its best days."
At the time of writing, shares in the company are down 3%.
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The article Will Obama's Address Tonight Trigger a Massive Sell-Off? originally appeared on Fool.com.John Maxfield owns shares of Bank of America. The Motley Fool recommends Coca-Cola. The Motley Fool owns shares of Bank of America and JPMorgan Chase & Co.. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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