Morning Bid with David Gaffen

One of the primary themes that should dominate the week is one of the divergence between the Federal Reserve and the European Central Bank.

No fewer than 30 S&P 500 companies report results on Wednesday, from names as varied as Coca-Cola to American Express to Tractor Supply Co. It’s true to say that so far this has not been a great earnings season – 69 percent of companies have exceeded earnings expectations and only about 40 percent on revenue – but with just 65 names reporting as of early Tuesday, it’s also correct to say it’s early days, given the heavy action we’ll be seeing over the next couple of trading sessions.

Industrial projects, particularly large ones, tend to require lots of heavy equipment, like cranes, and so this week’s results out of Manitowoc, which makes big cranes used in various parts of the world, including Asia and the Middle East, reported pretty disappointing results, adding that it expected more softness going forward with margins remaining in the low single digits for all of 2015.

It’s worth asking whether the markets are running a little too hot, cold, or just right, given the recent run in stocks following the August-to-September swoon. Investors always have ways of finding doomsday-style evidence that indicates that one way or another, the market is doing the wrong thing, and all hell is about to break loose. Later on Thursday, we’ll detail one of these, the so-called “skew” index that measures the cost of put options versus call options, which is signaling some worrying things of late.

Nearly 10 full months into the year, the easy winner among S&P 500 companies in terms of share performance is Netflix, which has gained 132 percent, even as other major momentum names have been broad-sided by the weakness in stocks that generally benefit from positive price trends.

Equities have risen more than seven percent in the last eight sessions. Thursday’s Federal Reserve minutes became the latest ball of confusion fired on the markets, and those in the stock-market world smiled, and asked for another, pushing equities to their highest levels in some time. This is somewhat maddening.

Futures have put together modest gains as the equity market looks to turn back to its winning ways after losses interrupted a five-day rally that’s built mostly on hope and duct tape, it seems. The prevailing commentary seems to still be left in a bit more of a pessimistic mode, with Citigroup’s chief economist William Buiter, who, well, muses more than anything else, about the output gap, that is, the level of growth compared with the level of potential growth, saying that if we get another year of lousy economic activity, it would suggest the world is in recession.

The week’s data is not strong enough to offset last week’s disappointment at the weak jobs report, so markets are more likely to focus on the several Fed speakers on the docket.

For the time being, all rallies in U.S. stocks need to be met with skepticism. The market has not been able to sustain any kind of advance since the turmoil began at the end of August.

This is a weird market we’re in. Equities spent a good part of the day under pressure, rebounded late on what was attributed to a wonky note that took an inside baseball view of the recent selloff, fell, and then rose, after Federal Reserve Chair Janet Yellen first said explicitly that the Fed plans on raising rates, and then suffered a mild health issue that gave everyone a bit of a scare before doctors said she was okay to continue with her schedule.