Where Things Stand in the Market as of Sunday, July 21st, 2024

Hi, Investors & Traders!

Leading stocks are the best indicators of the health of the market, and last week’s volatility saw a lot of stocks attempting breakouts, but ultimately pulling back below their buy points. The market hates uncertainty, and word that the Biden administration is considering further unspecified restrictions on exporting semiconductors to China affected not only a wide swath of AI & tech companies, but eventually non-tech companies.

Next week’s slate of earnings releases will once again test the market’s leaders, with Alphabet (GOOGL), Tesla (TSLA), ServiceNow (NOW) and a lot of lesser-known stocks—both tech and non-tech reporting. Sector rotations like what we’ve been seeing can be short-lived if the bulk of earnings releases are strong, or longer-term if either earnings, revenue or outlook are weak. ASML, for example posted strong earnings and revenue, but offered a weak outlook, and suffered as a result of it. Next week will also feature the Fed’s favorite inflation indicator, namely, PCE prices and personal income & spending, so let’s keep our powder dry until a more established, hopefully positive, narrative is in place. A positive development last week was the fact that the Nasdaq fell 3.65%, and decisively below its 21-day. It’s now just 1.7% above its 50-day moving average, after being 8.9% above that key level on July 10.