The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Old familiar.
There were few meaningful headlines today. Only Japan moved meaningfully, as a result of their election. The Nikkei surged 4.75%. US futures climbed small in sympathy but our equity market all that influenced. There were headlines about AI deals and headlines about new tariffs and headlines about the government shutdown. The details are different but the general nature of the news is the same. Investors continued to do what they do. The S&P 500 opened with strength, +20, faded early again, bounced in the morning, and stayed bid in the afternoon. Treasury yields climbed a few bips, but that didn’t deter the equity bulls. Capital flow was elevated at 116%. It looks like US equity investors want to push more money into the upside trend.
It's a fresh week without fresh developments worth talking about. The fundamental investment landscape isn’t shifting and so there are no significant things to discuss nor adjustments to make. We are rallying because we have rallied and big tech continues to lead the way.
The next *expected* material event on the horizon is the start of earnings season. JP Morgan kicks off the season with a few other financials on Tuesday the 14th. The large wave of earnings begins on Oct 20th. There are a handful of companies announcing this week.
The risk of earnings season derailing the rally is near-zero. Individual stocks may pop and drop but the narrative for the entire market is solidly established. And without a lot of negative preannouncements, it’s unlikely that reported results will sour overall appetites for equities.
The rally won’t last forever and stocks don’t only go up, but this looks like the smoothest sailing over the next few weeks.
Everyone is piling in to chase the bull market into the final quarter. And I think everyone may be right for a change.
See you tomorrow.
-Mike
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