The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
A bit different.
The bullish momentum gave out today, which is unusual. It remains to be seen whether this is a pause or a turn. S&P futures climbed to about +20 in the very early morning and climbed a bit more on the beats by the financials and the acceptable CPI data (2.7% vs 2.6% est & 2.4% prior). The S&P 500 opened +30, a new all-time high, but faded back to unch’d after about an hour. The index bumped along flat to slightly down for the bulk of the day, sliding a bit into the close. Treasury yields climbed across the curve and both the 20-year and 30-year yields popped above 5%, generating some chatter. Fed cuts for 2025 came in a fair amount and are priced at 44 bips.
Headline CPI was pretty tame but conversation over the day revolved around whether some of the internal CPI data shows the spark of tariff-induced inflation. I’ll save you the drama, it’s unclear but possible. So markets are wondering if tariff costs are *finally* showing up and so, the Fed isn’t about to ease. It could definitely explain the lack of upside enthusiasm we observed today. The question that follows is whether this is something that can actually stall or interrupt the bull market or if it’s just a bit of a hiccup. We’ll see with the release of PPI tomorrow and the market’s reaction.
More earnings reports will also matter as we proceed through the week. The market hasn’t caught earnings season fever but it’s still early. The current results are as follows:
7 S&P 500 stocks reported
Beta-adjusted:
Not much meat on the bone but as the beats accumulate, investors will talk amongst themselves about how good the reports are, and you can imagine the rest. Unlike hot earnings seasons in the past, it doesn’t feel like upside shock and awe is coming. It feels like solid and positive results, which don’t WOW but satisfy. In this environment, that’s a recipe for a continuation of the bullish trend.
If earnings deliver good growth, it will bolster the bullish case and it will draw more investors in long, regardless of valuation. The chart and the earnings (as long as the growth is OK) complement each other. So if/when that narrative gets established, we’ll be continuing northward.
Let’s see if that’s how it plays out. External catalysts, as always, can ruin the party.
See you tomorrow.
-Mike
IMPORTANT INFORMATION
This is general educational information and market commentary and is intended for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction.
All market and economic data herein is as of the date hereof and sourced from Bloomberg unless otherwise stated. The information is subject to change without notice and we have no obligation to update you.
This general market commentary is intended for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. The views and opinions expressed constitute the author(s) judgment based on current market conditions, are subject to change without notice, and may differ from those expressed by other employees of Visdom Investment Group LLC ("Visdom") and Visdom. Past performance and any forward-looking statements are not guarantees of future results. It is not possible to invest directly in an index.
We believe the information contained in this material to be reliable and have sought to take reasonable care in its preparation; however, we do not represent or warrant its accuracy, reliability or completeness, or accept any liability for any loss or damage (whether direct or indirect) arising out of the use of all or any part of this material. Any securities referenced are shown for illustrative purposes only, and are not intended as a recommendation or endorsement by Visdom or by the author(s) in this context. The information presented is not intended to be making value judgments on the preferred outcome of any government decision. This information does not constitute Visdom research, nor should it be considered a recommendation of a particular investment strategy or an offer or solicitation for the purchase or sale of any financial instrument. Investing involves market risk, including the possible loss of principal. You should speak to your financial advisor before making any investment decisions. Visdom and its affiliates do not provide legal, tax or account advice so you should seek professional guidance if you have questions.
