The Fuse
Equity futures are on the rise, looking to build on Friday’s robust gains. Today is the last trading day of July and it is looking like this will be another sharply higher month on the close. We talked in June about this month being one of the best months in the calendar, and it did not disappoint. August gets underway tomorrow and there could be a modest spillover effect./span>
Interest Rates are slightly lower with higher bond prices. Euro and Asian stocks are on the rise this morning as bonds overseas catch a nice bid.
Japan announced a heavy bond buying program that will commence soon, crude prices are a bit lower but the commodity will post its biggest gain in months.
Earnings calendar this week is heavy with names like Amazon, Apple, PayPal and Caterpillar. This is an important week for companies to discuss their plan for the remainder of 2023 and to see how the response is towards higher interest rates (borrowing costs).
Demand seems quite strong thanks to a solid job market, which we will find out more on that situation later in the week.
Earnings this week include Apple and Amazon, and many will be watching those. But it’s all about the jobs report this week and if the economy continues to float along and test the soft landing scenario.
Solid breadth for the markets as the bulls turned around Thursday’s failure. One more strong day of breadth will put the oscillators back in positive territory, and maybe a strong start to August will ensue.
Volume trends are starting to pick up with the end of the month nigh. Solid price action with strong turnover remains a theme for the markets, and it’s very positive.
Missed it by that much! The SPX 500 tried to make a run to 4,600 on the close but just missed it, but it won’t take much effort to pull it off next week. In fact, a strong finish for July get it there, but there is more resistance up at 4,650, then the all time highs above there.
The Internals
What’s it mean?
Solid day across the board for the bulls from the start as we see the VOLD taking off to the upside and never looking back. Ticks were strong and mostly green all session, while VIX plunged following a sharp rise Thursday. Notice the put/calls, which had been jumpy this week. They plunged Friday following some news, which follows the theme of lower put/calls.
The Dynamite
Economic Data:
- Monday: Chicago PMI
- Tuesday: global PMI, ISM manufacturing, construction spending, JOLTS report
- Wednesday: ADP report, weekly crude report
- Thursday: Productivity and unit labor costs, global services PMI, ISM non-manufacturing, Factory orders
- Friday: non-farm payroll report
Earnings this week:
- Monday: HTLD, ON, CAR, BLNK, HLIT RMBS, YUMC
- Tuesday: MO, CAT, ETN, ITW, MAR, TAP, UBER, AMD, CZR, ELF, MOS, PINS, SBUX, VFC
- Wednesday: BLDR, YOU, CVX, DD, EMR, RACE, YUM, CF, CAKE DASH, EVGO, FSLY MGM, PYPL, QRVO, QCOM, SHOP, ZG
- Thursday: BUD, GOOS, CMI, PZZA, SHAK, VMC, AMZN, AAPL, SQ, NET, POST, DBX, FTNT, WW
- Friday:AMC, CBOE, PRLB
Fed Watch:
Last week’s Fed meeting seemed ho-hum to many but to use there was a message sent, and that was the committee was trying to pivot slowly, out loud. Of course, nobody heard it that way to feel confident about that call, but we believe the Fed may consider a pause or a hike over the next few meetings. Any hike that does come is likely to be the last one. We’ll have some speakers out this week talking about the economy. While inflation remains too high for their liking, they are still very pleased to see prices starting to come down due to their efforts.
Stocks to Watch
Apple – the largest company in the world will report earnings this week, the stock has added more than 1 trillion dollars in value this year. We don’t expect a disappointment but rather news about upcoming products and production concerns.
Jobs – Friday’s big employment report will give us a glimpse of how the economy has started off in the second half of 2023. So far so good and if productivity is strong the day before, the Fed will be very pleased with their hawkish campaign.
Interest Rates – Last week saw rates climb above 4% on the 10 year for a brief moment, enough to scare stock investors. We’ll be watching for more ‘scaring’ this week, if it materializes.