The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Google Yes, Tesla No.
S&P futures only rallied 5-10 points overnight. The index opened around +10 and wandered around all day, never dipping negative but never taking off either. Alphabets results were great and the stock rallied modestly. Tesla’s results were not so great and the stock dropped 8 percent. The broader market seemed encouraged on balance and bulls kept the tape supported throughout the session. Treasury yields climbed across the curve again and while that’s not spooking stocks, the 20 and 30-year yields are getting close to the 5% psychological level again. Fed cuts for the year… now priced at 43 bips.
Today was about as quiet of a day as one could have imagined, on the heels of two Mag 7 earnings reports. Fireworks for the broader market are lacking even though Tesla shareholders had a brutal day. We can’t extrapolate today into next week but it is very interesting that GOOG and TSLA didn’t change the earnings season narrative established last week. That narrative is that earnings and revenues are good enough.
Shorts, if they still exist, aren’t covering like mad. Longs aren’t inspired to go bonkers. The market is simply continuing the trend and putting fresh capital through the offers.
How long will it continue? Good question. Probably until Wednesday.
Wednesday:
2 PM – FOMC decision and press conference
After close – Microsoft and Meta results
Thursday:
After close – Apple and Amazon results
The rally isn’t destined to end on Wednesday. It could accelerate depending on what we learn. My point is that the sessions between now and then don’t appear to have the events that will change in mood of the market. And so it makes sense to anticipate a continuation.
Next week could be wild, especially given potential month-end flows.
See you tomorrow.
-Mike
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