After yesterday’s big rally, stocks are now waiting for the and big tech earnings. The S&P took a run at 6,900 on the open and pulled back to flat on the day. The Dow is doing better, +0.6%, on the strength of Microsoft being up 2.2%.
The next couple of days are a watershed of data in the form of the Fed cut, and importantly, the comments from Powell, along with the mega tech earnings of , , and tomorrow, and and on Thursday. The weight of Mega Tech in market weight and overall earnings in the indexes can’t be overstated. They must not disappoint for the positive momentum to continue.
The US Treasury market is flat today, going into the Fed meeting. Credit spreads are shrinking on the strength of the equity markets, and leaning into expectations for lower rates ahead. Powell’s comments are so important this week. If he comes off dovish, bets for future Fed cuts will increase and provide more fuel to market momentum.
On the commodity front, gold pulled back materially today, almost hitting $3,900/oz, before bouncing to $3,967, still down 1.3%. Silver is up 0.5%. Copper is flat. Crude oil has dipped below $60/bbl and natural gas is down 3% but up 12.9% for the trailing week at $3.87/mcf. Bitcoin has been holding at $115.1K.
So, we wait for Powell and earnings for 5 of the Magnificent 7 to determine the near-term trajectory. Other catalysts at play are the Trump and China meeting and the end of the government shutdown.
The risk appears to the upside when including the seasonal strength of November and December.