The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
No surprises.
Continued earnings beats and no nasty headlines led to a continuation of the habitual behavior of recent markets. The S&P opened +10 and added gains consistently over the day. We printed new all-time intraday and closing highs. Yields dropped small across the curve, which helped, and the Fed cuts for the year are priced at 45 bips, not very different from yesterday.
We’re on to next week and month-end and some particularly significant events. Let’s just go over them briefly.
Wednesday:
8:15 AM
July ADP: +80k est vs -33k prior, while ADP has been horribly inaccurate in predicting nonfarm payrolls data, it will still get investors thinking ahead and re-jiggering their FOMC projections
2 PM
FOMC decision: currently a 2% probability of a cut, expect Powell to be asked about the President a lot and also to justify the current rate policy stance, it’s going to be a rougher-than-usual presser.
After close
Microsoft and Meta announce: everyone expects them to beat. They need to really beat, improve guidance, and up their AI spending plans to gin up their shareholders
Thursday:
After close
Apple and Amazon announce: everyone expects beats and all the rest, these are the 5th & 6th Mag 7 stocks to announce this season. Nvidia is the last and they announce August 27th
Friday
8:30 AM
July nonfarm payrolls: +109k est vs +147k prior, the Fed will have already acted but the Street will start planning for the rest of the year. This print establishes the path. With 3 FOMC meeting remaining in the year and about 2 Fed cuts expected by the market, things are about to get real.
We’ve known next week would be a whopper of a week for a while. It shows up in two days. Rest up everybody. I expect the bulls to prevail, which shouldn’t be surprising. Anyone looking at the chart is thinking the same.
See you Monday, have a great weekend.
-Mike
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