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Earnings are decent, but light revenues an ongoing trend

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Decent earnings have been overshadowed by poor showing in Asia, and a weak U.S. durable goods figure.

Halfway through earnings season, we had a raft of generally good reports from UPS , Microsoft, Amazon.

UPS, for example, beat by a penny, helped by international package volume that was up about 6 percent; meanwhile, domestic package volume rose about 2 percent.

P&G earnings 'right on track': CFO
P&G earnings 'right on track': CFO

Wynn Resorts reported another strong quarter as results in Macau were again strong, where EBITDA grew 12.6 percent, but in Vegas EBIDTA declined by about 3 percent, and that's a problem. Wynn is opening another casino in China--in Cotai--in 2016. They are also competing for a license in Philadelphia with five competitors.

Procter & Gamble confirmed its 2014 earnings and revenue guidance. They just reported a beat on their first quarter (Q1) 2104 numbers.

It wasn't all good news. The big multi-industry companies have been very mixed, as Eaton showed. They lowered the top end of their 2013 guidance, and noted they saw little revenue growth in the second quarter. Actual revenue increased from the second to the third quarter by only $5 million, as a result of "continued sluggish economic growth around the world." Overall markets in 2013 are now likely to be flat.

Some of the good news on earnings is being overshadowed by the poor September Durable Goods report. It was also an ugly session in Asia, where the dropped 2.75 percent, China's Shenzhen dropped 1.8 percent, and even Taiwan was down 1.1 percent. There was concern that rising money market rates in China may presage a rise in rates in general. The yen is also rising, the falling, which threatens the yen carry trade, where investors borrow cheap yen and invest overseas in higher-yielding assets.

Finally, word that Alibaba may delay its IPO is also weighing on the market. There is also speculation they may be reconsidering their decision to list outside of Hong Kong, which would be a blow to the NYSE and NASDAQ, both of whom would relish the listing.


1) The prevailing earnings trend continues: beat on profit but miss on revenues. I looked at eight large companies this morning who had reported: only one (Rockwell Collins) missed on earnings, but several others (including Rockwell, Eaton, Newell Rubbermaid, and UPS) were light on revenues.

2) Three IPOs priced overnight, all below the price talk: a) oil and gas distribution and storage company Sprague Resources (SRLP) priced 8.5 million shares at $18 each, below $19 to $21 range, b) broadband company CommScope (COMM) priced 38.4 million shares at $15 apiece, below $18 to $21 range, and c) pharmaceutical company Aerie Pharmaceuticals (AERI) priced 6.7 million shares at $10 each, below the $12 to $14 range.

3) The biggest sovereign wealth fund warns of a "correction" in stock prices. The CEO of Norges Bank Investment Management, the world's largest sovereign wealth fund, said he's not interested in buying more stock, according to an interview with Bloomberg.

Yngve Slyngstad runs the $180 billion sovereign fund. They held 63.6 percent in stocks at the end of September, with a 35.5 percent bond allocation and a 0.9 percent real estate. "Our share in the stock market has been stable or falling even though markets are rising, and that means in practice that we're not using inflows to buy stocks," Slyngrstad said at a press conference. He spoke of a "correction" in prices.

4) Equity funds saw massive inflows in the week ended Wednesday, collecting more than $16 billion. Stock mutual funds gathered $6 billion as the S&P 500 rallied to a record high amid the perception the Federal Reserve will keep pumping money into the economy at its current pace until at least March of next year; stock exchange-traded funds (ETFs) saw inflows of more than $10 billion.

Even though investors displayed a riskier appetite last week, there is still no sign of a "Great Rotation" out of bonds and into stocks. Bond mutual funds witnessed inflows of $1.7 billion in the week ended Wednesday, and bond ETFs accumulated $1.3 billion.

3) NYSE is hosting its annual Floor Broker Charity Trading Day. All net transaction fees on orders executed by NYSE floor brokers will be donated to St. Jude Children's Research Hospital, which specializes in research and treatment of pediatric cancer and other life-threatening diseases.

By CNBC's Bob Pisani