July 11, 2022

Markets:

U.S. equities futures fell early Monday morning as Wall Street looked ahead to big company earnings reports slated for later in the week.

Twitter shares fell 5% in the premarket after Elon Musk terminated a deal worth $44 billion to buy the social media company. The billionaire took issue with the number of bots and fake accounts on the platform and said Twitter wasn’t being truthful about how authentic activity on the platform was. However, the company said it gave Musk the information he needed to assess the claims.

Monday’s moves lower come on the back of worsening Covid trends in China, with Shanghai detecting its first case of the BA.5 subvariant and Macau closing its casinos for a week.

Wall Street is coming off a mixed session in which the Dow and S&P 500 fell slightly, while the Nasdaq Composite rose for a fifth straight day. All of the major averages secured a winning week after a stronger-than-expected jobs report Friday showed that the economic downturn worrying investors has not yet arrived and added to positive sentiment.

Still, the 2-year Treasury yield hovered above its 10-year counterpart, an inversion many see as a recession indicator. The 2-year rate on Monday traded at 3.08%, roughly 2 basis points above the 10-year.

PepsiCo and Delta Air Lines are scheduled to report earnings Tuesday and Wednesday. JPMorgan Chase, Morgan Stanley, Wells Fargo and Citigroup are set to report at the end of the week.

Investors are also looking ahead to the release of June’s consumer price index on Wednesday, which is expected to show headline inflation, including food and energy, rising above May’s 8.6% level.

Portfolio:

We enter the new trading week holding positions in: ALLY, APPS, FNKO, AEHR, and ITRM. All had beautiful technical set-ups when released along with strong option volume. We now look for price activity to materialize over the next week. This week marks the beginning of one of the most highly anticipated earnings season in years along with the bulk of seasonal trades set to begin and many traders / investors beginning to position themselves for mid-terms. The next several months will provide the strongest amount of opportunity 2022 has seen. This is the time we patiently been waiting for. Let's have a great session and be ready today!