Brace for Impact
Earnings reports and Fed announcements could sway markets
Quick summary:
The Q3 competition is up & running - click here to join the action.
Last week began strong but turned volatile with sharp declines after disappointing earnings from Google (-5%) and Tesla (-12%), leading to significant drops in SPX (-2%) and NASDAQ (-3.5%).
Tech stocks (Mag7) fell 6-7%, while small caps (Russell 2000) rose 2.5%, driven by expectations of rate cuts.
This week, all eyes are on the Federal Reserve's rate decision and key earnings reports from major tech companies.
The employment report on Friday will provide critical insights into the labor market and could influence future rate decisions.
The competition
With three weeks of competition behind us, the Q3 leaderboard is heating up, showcasing both new contenders and consistent performers. With the standings evolving, it’s the perfect time to either safeguard your position or devise a bold strategy to rise.
Keep your strategies sharp and your eyes on the top!
NOTE: For all those new to the whole thing, read more about it here or watch a video of Scott and myself guiding you through the survey, showing you all its features, and briefly explaining how the competition works.
Last week’s performance
Last week began with a promising start, with the S&P 500 (SPX) up by 1% and NASDAQ (NDQ) up by 1.5% on Monday, continuing into Tuesday. However, as expected, earnings reports from Google (GOOGL) and Tesla (TSLA) fell short, leading to a sharp decline. GOOGL dropped 5%, and TSLA plummeted 12%, causing SPX to experience its first -2% day in over a year and NASDAQ to fall by 3.5%. Thursday's volatility was marked by a brief intraday squeeze, but the market ultimately fell again. Despite worse-than-expected PCE inflation data, Friday saw a rally, wrapping up a jumpy week with a "W" pattern.
The highlight of last week was the rotation from tech stocks (Mag7) to small caps (Russell 2000, IWM). Mag7 stocks saw an average drop of 6-7%, while the Russell 2000 gained 2.5%, marking a 12% monthly increase. This shift is largely driven by expectations of upcoming rate cuts, benefiting small caps. Looking ahead, the focus is on the upcoming earnings reports from MSFT, META, AAPL, and AMZN, the FOMC meeting, and the Treasury's quarterly refunding announcement (QRA). These events could dictate market movements, with scenarios ranging from potential rallies to continued sell-offs depending on the outcomes.
This week is set to be eventful for the markets with major developments in monetary policy and earnings. The Federal Reserve will announce its latest decision on interest rates on Wednesday, and while no changes are expected, Chair Jerome Powell's comments will be closely watched. The employment report on Friday will also be significant, providing insights into the labor market and potentially influencing future rate decisions.
In addition to the Fed's activities, several Big Tech companies, including Microsoft, Meta, Apple, and Amazon, will report their earnings. These reports, along with updates from other notable companies, will provide a broader picture of economic health and market trends.
Thanks for reading.
…join the $20,000 competition!
Join our survey competition to get an opportunity to participate in our quarterly ($5000) and annual (3% of our profits) prize distributions:
DISCLAIMER: Neither the survey nor any of the contents of this website can act as investment advice of any kind. The results of the survey need not correspond to actual market preferences or trends, so they should be interpreted with caution. Oraclum Capital, LLC (Henceforth ORCA) is a management company responsible for running the ORCA BASON Fund, LP, and for organizing a survey competition each week, where it invites the subscribers to its newsletter (this website) to participate in an ongoing prediction competition. The information presented on this website and through the survey competition should under no circumstances be used to solicit any investment advice, nor is it allowed to be of commercial use to any of its readers. The survey and this website contain no information that a user may use as financial or investment advice. All rights reserved. Oraclum Capital LLC.
And, as always, don’t forget to subscribe to the newsletter.