The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
US/Iran
Yet again, stories of progress in the US/Iran war grabbed the markets’ attention. Crude oil fell materially across the curve and Treasury yields came in materially across their curve. These moves helped push US stocks higher. Mag 7 stocks led the way, excepting Tesla. Capital flow was slightly elevated at 102%.
Hmmm. The markets’ reactions to the latest chapter of US/Iran speculation is surprising. I didn’t think investors would still yo-yo on headlines regarding that situation. Obviously we are yo-yo-ing though. Color me surprised. On an otherwise quiet day, this was the push the bulls needed to get some, albeit modest, upside going. Perhaps this suggests a bullish trend is looking to kickoff, should the Fed do and say the right things tomorrow?
Fed-hiking probabilities for tomorrow fell some today, to 32%. The market is still a bit on the fence but also losing conviction that the Fed will drop the hawkish hammer. A hike would surprise all markets for sure, but probably affect the stock market the most. We can only wait and see.
As for earnings announcements, 32 results from the S&P 500 came out yesterday after the close or today before the open. There were no megacap names that captured the attention of the broader market but the overall results are putting a little pep into the bulls’ step. Here’s the basic recap.
32 S&P 500 stocks reported today
27 beat EPS estimates, 5 missed today
19 stocks rose, 13 fell
Beta-adjusted:
18 stocks outperformed, 14 underperformed
For the first time this earnings season, the reporting stocks outperformed. This isn’t sparking a lovefest for stocks but it suggests some kind of attitude shift. It’s doubtful that it will matter if the next reporting megacaps disappoint, but if they deliver, maybe it shows a likelihood for an extended rally. Again, nothing to do but wait.
The Fed makes the first move tomorrow at 2 pm. Microsoft and Meta make the next moves after tomorrow’s close. Apple and Amazon finish up after Thursday’s close.
See you tomorrow.
-Mike
Visdom Market Commentary
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