July 18, 2022

Markets:

U.S. stock index futures rose sharply Monday as Goldman Sachs kicked off a busy week of earnings on Wall Street with a report that topped expectations.

Those moves come as investors anticipate a slew of major earnings this week. Shares of Goldman Sachs popped 3% in the premarket after the investment bank reported an earnings beat on the top and bottom lines. The firm’s fixed income traders generated about $700 million more revenue than expected.

Bank of America reported quarterly revenue that beat analyst expectations, though the stock was down slightly in the premarket. JPMorgan Chase and Morgan Stanley kicked off the season for big banks last week, posting mixed quarterly results.

The major averages are coming off a losing week, despite a Friday relief rally that saw the Dow jump more than 650 points. The 30-stock benchmark shed 0.16% on the week. The S&P 500 and Nasdaq Composite fell 0.93% and 1.57%, respectively.

Friday’s relief rally came as traders bet that the Federal Reserve will be less aggressive than feared at its upcoming meeting. The Wall Street Journal reported Sunday that the central bank is on track to lift interest rates by 75 basis points at its meeting later this month. Goldman Sachs chief economist Jan Hatzius also said in an overnight note that he expected the Fed to raise rates by 0.75 percentage point.

A batch of economic data drove last week’s wild market action. Inflation jumped 9.1% in June, a hotter-than-expected reading and the largest increase since 1981. That, in turn, led traders to bet that the Fed could raise rates by a full percentage point at its meeting at the end of July.

Portfolio:

We enter the new trading week holding positions in SQ, WEBR, LCID, and holding ITRM. We will be looking to add new trade set-ups as the queue is igniting. We told you about a month ago we saw the price activity shift and we are starting to see it work well. The next several months will not only provided you further opportunity but an opportunity for traders to take advantage of mid-term election and the market narrative that will bring. Cannot stress enough the outlook for opportunity over the next several months. Let's remain patient and hyper focused here. Let's have a great session.