The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Great results, slow fade.
Microsoft and Meta handily beat their expectations and told investors what they wanted to hear. S&P futures traded +50 for most of the premarket session. The index opened +45 and traded about that level for an hour before slipping lower, going flat at 1:30 PM and trading flat-to-down in the afternoon. The index dropped more quickly into the close. Treasury yields barely moved and macro data didn’t change any narratives.
The story of the day is all about mood. Perhaps all the good news had been priced into the market? Microsoft and Meta shares climbed a lot today, so their shareholders seem to think the good news needed to be incorporated into their share prices. The broader market rolled over however. From an equity market standpoint, the mood certainly appears to be that things are as good as they can get. It suggests that further upside, in the short term, is a difficult proposition.
That said, moods can change in a flash so today’s tepid appetite for stocks isn’t assured to stick around. Dip-buyers may be willing to move in with force again, especially if they hear from new sources that things are great.
Tonight Amazon and Apple report. It’s pointless to guess what they’ll say and how the market will react. We’ll find out soon enough.
See you tomorrow.
-Mike
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