July 21, 2023

Markets:

Stock futures were higher Friday as traders assessed the latest corporate earnings results, and the Dow Jones Industrial Average tried to stretch its winning streak to 10 sessions.

Corporate earnings have been mixed thus far. Seventy-three percent of S&P 500 companies that have already reported exceeding analysts’ expectations, according to FactSet data. However, that beat rate is below a three-year average of 80%, according to The Earnings Scout.

Wall Street is coming off an uneven session. The S&P 500 and Nasdaq Composite lost around 0.7% and 2%, respectively. The Dow was the outlier of the three, adding nearly 164 points, or about 0.5%, for a nine-day rally — its longest since 2017 — and its highest close since March 2022.

U.S. Treasury yields fell slightly on Friday as investors weighed what could be on the horizon for monetary policy and especially interest rates ahead of the Federal Reserve’s meeting next week.

Portfolio:

Today and early next week will be important for the Nasdaq and it's response. Yesterday was not just about TSLA & NFLX, it was much more and it's ok! This type of price activity is expected in bear and bull markets. We've enjoyed daily gains for over a week from the Q's. There is absolutely no reason to concern yourself with ONE day of price activity. OfCourse it hurts at times, but, look at what we have the next two sessions; expiration in US stock options for $2.4 trillion today! Also, it is the last day before the Nasdaq 100 rebalancing takes effect. Do you not think yesterday this rebalance also was taking place?

Allow this price to work and materialize. Technically, we are in a monster positions. Expect wild swings today. It's almost best to sit on your hands and just wait for Monday before proceeding with new trade set-ups. Allow the current portfolio to work. We will be watching the queue and it's igniting but we want to be super patient here knowing a roller coaster can be in play today and early Monday morning. This market is still in a beautiful range, and we are about to enter a great period with Monster earnings on tap and the election cycle set to begin in August. Be on alert today!