The stock market put together a decent rebound effort to begin the week. Buying interest was broad based and featured the outperformance of both the mega-cap stocks and the small-cap stocks. The biggest winners, though, were the semiconductor stocks, which were last week’s biggest losers.
Remarkably, the Philadelphia Semiconductor Index registered a huge 4.0% gain yesterday after dropping 8.8% last week, and it did so without a lot of hype around it. There was simply a rush of buy-the-dip interest that got overshadowed by the rush of political change after President Biden dropped out of the 2024 presidential race and endorsed Vice President Harris.
The political excitement hasn’t died down, but the equity futures market has.
Currently, the S&P 500 futures are flat and are trading fractionally above fair value, the Nasdaq 100 futures are down 35 points and are trading 0.1% below fair value, and the Dow Jones Industrial Average futures are up four points and are trading fractionally above fair value.
This mixed disposition has flowed in part from a battery of earnings reports from some widely-held companies that has been greeted with mixed responses.
Good responses have been allocated to General Motors (GM), Coca-Cola (KO), Spotify (SPOT), Lockheed Martin (LMT), Sherwin-Williams (SWH), SAP SE (SAP), and Danaher (DHR) to name a few. Bad responses have been allocated to UPS (UPS), NXP Semiconductors (NXPI), Polaris Inc. (PII), Genuine Parts (GPC), Kimberly-Clark (KMB), and Nucor (NUE) to name a few others.
These are the pre-market responses, which is when trading conditions are thinner, so any could be subject to change when the cash session begins. For now, though, they have muddled the pre-open picture.
A focal point amid that muck is the earnings reports due after today’s close. Alphabet (GOOG), Tesla (TSLA), Visa (V), Capital One (COF), and Texas Instruments (TXN) are all on the docket.
Naturally, there is commanding interest not only in what Alphabet and Tesla report and guide, but in how those stocks react to what they report and guide.
That understanding is another element contributing to this morning’s seeming lack of conviction in the futures trade. We’ll see if the Existing Home Sales Report for June (Briefing.com consensus 4.00 million; prior 4.11 million) at 10:00 a.m. ET can get things moving.
The latter should pique the interest of the Treasury market, which has started today on a positive note. The 2-yr note yield is down two basis points to 4.50% and the 10-yr note yield is down three basis points to 4.23%.
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Originally Posted July 23, 2024 – Mixed disposition on mixed response to earnings news
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