The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Hopeful signs
News of a ceasefire extension between Israel and Lebanon as well as US and Iranian representatives travelling to Pakistan inspired risk-on trading today. The yield curve came in a bit. Crude did too. The Dollar weakened a smidge. The S&P opened around +20 and set a new all-time high in the afternoon. Tech led all the other sectors, by far. Healthcare lagged the most.
Markets are encouraged by the Middle East developments. I’m not sure why. It sure feels like the same old song and dance but maybe this time will be different. Investors didn’t price *that* much optimism into trading today so perhaps this is just an incremental adjustment that reflects a good possibility. We shall see what the weekend brings.
Earnings season finally got its early posterchild. Intel surprised significantly and the stock rallied 23% today. It’s up 87% for the month and 124% for the year. Intel had been left for dead for a couple of years. It appears to be on the fast track to good things. While the stock doesn’t have the market cap nor mindshare that it used to, the equity market took comfort in its beat. A big stock response from an excellent quarter, plus guidance, is just the kind of anecdote that investors need to craft a narrative about earnings season and set a trend in motion.
Next week we get the reports from 5 of the Mag 7, so they could easily take the torch from Intel and keep the earnings season rally going. Amazon, Meta, Microsoft, and Alphabet all announce after the close on Wednesday. Apple reports after the close on Thursday.
Have a great weekend, see you Monday.
-Mike
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