The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
FYI, I’m out tomorrow so next Recap will be Monday.
MSFT and META
Last night’s results and guidance from both Microsoft and Meta were very good for shareholders and enthusiasm for the broader market spilled over immediately. S&P 500 futures rallied last night and strengthened through the early morning. The index opened about +50 and printed +90 and the day’s highs, just before lunch. The index gave back some gains in the afternoon, especially into the close, but it finished with an impressive day for the longs. Macro data was a non-event. Yields climbed across the curve and Fed cuts for the year are priced at 91 bips, with only a 7% chance of a cut next week.
The S&P closed higher for the eighth consecutive session and the bulls are in charge of the tape. They also control the mood. The chart is screaming at all the sidelined players to get in and get in with gusto. We broke over the 50-day moving average today. Chart-readers are almost certainly bullish and they see lots more upside ahead.
What do you see?
Anyone who believes that dips should be bought, always, sees vindication in the current chart. Maybe some were scared into inaction after Liberation Day. Maybe they *knew* they should’ve hit the buy buttons but just wanted to wait.
Now the fear has dissipated and they are acting. They see that there’s a lot of room to run if we’re heading back to the previous highs and we’re starting to see an actual chase higher. I don’t know how long it might last but unless we get an *awful* set of data and/or news headlines, I think they’re going to push lots of capital into the stock market on the long side.
Speaking of downside risk, nonfarm payrolls (+135k est vs +228k prior) print tomorrow at 8:30 AM. Today, markets aren’t worried about a recession nor tariffs. If payrolls stink, that all changes. Weak ADP printed Wednesday and markets freaked out for a couple of hours and then shrugged it off. Markets will not shrug off nonfarm, whatever it is.
See you Monday.
-Mike
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