The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Rebound.
Overnight futures trading bumped the S&P 500 up about 20 points and the futures tacked on and additional 30 points as Europe traded. The real bulls showed up during regular trading as the index opened +54 and climbed to +150 around lunchtime. The index gave back some of those gains in the afternoon but today was a clear victory for the bulls. Investor sentiment improved as the market embraced the narrative that yesterday’s negativity was too much. Some chatter before noon about a potential de-escalation with China sent the S&P above the +100 handle mark. Yields didn’t do much today, and capital flow was light again, 90%.
Markets essentially undid Monday’s drop. After a good night’s sleep, investors thought yesterday’s dip was attractive and they went to work, especially during regular trading hours. The swing reflects a large sentiment reversal from yesterday. It remains to be seen whether today’s sentiment is too good, too negative, or just right.
Tariff talk and Fed Chairman insults have dominated market attention lately but earnings season has also just begun. At some point, we will have earnings results mattering. They will shape investor mood and also the outlook for the rest of the year. Thus far, earnings season has been unremarkable. It hasn’t been so good as to reverse the pervasive negativity due to tariffs. It also hasn’t been so poor as to smash current valuations. Here’s what we’ve seen so far.
63 S&P 500 stocks reported
Beta-adjusted:
Tesla announces after today’s close. It is highly likely that Tesla puts earnings season on the front burner of the market. We’ll have to see what that means come tomorrow.
See you then.
-Mike
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