D&D Note (7.20.2022) ~ Tech Stocks Rally as Investors See Early Earnings Multiples Holding Up ~
Earnings are ‘OK’ so far as we head further into earnings season helping stocks to continue their rally.
Roughly 12% of the S&P 500 companies have reported earnings and so far 68% have beaten analyst expectations. We just have not seen the drastic revision down in earnings, so far, that investors where concerned about.
This has led to high beta tech stocks to rally while defensive sectors like utilities and consumer staples sold off today.
Mortgage demand drops to 22-year low last week after buyers lose purchasing power with rates having doubled since earlier this year.
June home sales fell 5.4% from May which is the slowest pace since June of 2020 while the median price of existing home sets record of $416,000 an increase of 13.4% year over year.
Air Travel complaints triple in May from same month in 2019 with a record 2,413 complaints with more cases of mishandled wheelchairs and bags.
The European heatwave is leading to record temperatures and fires brought on by drought and winds. In London alone the fire department had their busiest day sine WWII when Nazi Germany bombed the city. Wildfires are breaking out in France, Spain and Greece with the hot and dry weather.
Stock Specific News:
Netflix rose 4.4% after reporting last night better-than-expected subscriber losses.
Casino stocks rose with Las Vegas Sands gaining 3.3% and Wynn Resorts gaining 2.3% following a report that Macau will reopen casinos this Saturday after easing Covid restrictions.
Baker Hughes fell 8% after reporting disappointing earnings of half what analysts expected.
J.B. Hunt fell 1.7% despite reporting stronger-than-expected earnings.
Ford plans up to 8,000 job cuts to help fund their investment in EVs.
Tesla reports revenue roughly in line with expectations and the stock rose over 3% in after-hours trading.
Closing Markets (as of 1:15pm PST)
DOW up 0.15%
S&P 500 up 0.59% (3,959.90)
NASDAQ up 1.58%
VIX down -2.78% to 23.82
2 Year Note up 0.87bp to 3.25%
10 Year Note up 0.94bp to 3.03%
Oil down -1.545% to $102.61 a barrel.
Gold down -1.187% to $1691.40 an ounce.
Bitcoin up 1.07% to $23,277.43
Ethereum down -0.59% to $1,532.82
~ Dave James / Principal Trader and Market Strategist
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