The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
And they’re off
Alphabet, Amazon, Meta, and Microsoft all beat. Investors took issue with the AI results at Microsoft and the AI spend at Meta. Alphabet’s AI results were very positive and the stock was up as much as 10% during the day. Amazon’s results were welcomed and apparently expected. AMZN traded up small today.
So the reporting Mag 7 delivered beats but their stock performance was mixed. The S&P opened +20, retreated to flat around 10 AM and then went on a consistent and impressive rally over the remainder of the day. The S&P printed new all-time highs. Treasury yields came in across the curve. Crude fell on the front and climbed elsewhere but the moves were small. The Bank of Japan threatened a Yen intervention and the currency strengthened significantly, 2.5%. Capital flow was normal.
While the under-the-hood AI results from the Mag 7 stocks have single-stock implications, the overall spend and the overall results are bullish. This suggests that that entire broader market will ultimately benefit. And so the bulls went to work.
April has been an amazing month for the longs. The S&P gained 10.4%. Going back to the ‘70s, this month was in the 98th percentile. It more than repaired the damage of March. Who knows how much further we’ll climb. It’s going to be tough in the very near term since we are overbought. Maybe beginning of the month flows won’t care and we’ll shoot higher tomorrow too?
Also, if peace with Iran ever happens, overbought or not , we’re shooting higher.
It’s a rough time to be a bear. I think the dip-buyers will be slapping each other’s backs for a while and wagging their fingers at the old naysayers. Look at this chart of the S&P in the 2020s.
The dip-buyers have the Midas touch and the confidence to boot. It will take a depression to shake them out of their beliefs. And I certainly don’t see a depression on the horizon.
See you tomorrow.
-Mike
Visdom Market Commentary
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