D&D Note (7.18.2022) ~ Apple News of Slowing Hiring & Spending Fizzles Todays Rally ~
Stocks started todays session with a continuation of last weeks rally on the back of bank earnings. The 2 Year Note continues to be a main directional driver of the overall stock market.
Today we saw a slightly weaker dollar and higher oil prices which also are drivers of directionality of stocks.
Markets took a major leg down after Apple announced plans to slow hiring and spending growth next year in specific divisions to cope with a potential downturn.
Stocks drifted down and closed near session lows on the day.
The price action in Apple todays shows investors what might happen in the markets if the company provides negative guidance when they report earnings next week.
Homebuilder sentiment plunges to July by 12 points to 55 which marks the largest single-month drop in the 37-year history of the survey with the only exception being April 2020. This is actually good news as the housing market needs to cool off and is too expensive.
Goldman Sachs CEO David Solomon says inflation is ‘deeply entrenched’ in global economy and it’s unclear if things will get better later this year and he expects more volatility and uncertainty.
Crypto miners temporarily shut down in Texas to preserve power on the Texas power grid with a heat wave hitting the state.
Stock Specific News:
Goldman Sachs rises 3% after reporting earnings that exceed estimates with the banks fixed income traders making $700 million more revenue than expected.
Delta Airlines gained over 5% on news they are buying 100 Boeing 737 Max 10 planes. Boeing gained over 2% on the news.
Tesla jumped 4% after Duetsche Bank added the company to its short-term buy list citing potential to exceed Wall Street expectations when the company reports earnings.
Coinbase soared 15% after DNB Asset Management bought shares of the crypto exchange.
GE announces new names with the upcoming company split with GE HealthCare, GE Aerospace and GE Vernova.
Energy stocks rose with the lift in oil prices and fears supply remain tight with Devon Energy rising over 5% today and leading percentage gainer in D&D’s trading portfolio.
Closing Markets (as of 1:15pm PST)
DOW down -0.69%
S&P 500 down -0.84% (3,830.85)
NASDAQ down -0.81%
VIX up 4.42% to 25.30
2 Year Note up 3.25bp to 3.16%
10 Year Note up 4.25bp to 2.96%
Oil up 4.734% to $102.21 a barrel.
Gold up 0.117% to $1705.60 an ounce.
Bitcoin up 2.96% to $21,557.38
Ethereum up 9.29% to $1,466.48
~ Dave James / Principal Trader and Market Strategist