July 12, 2024

Markets:

U.S. stock futures were little changed Friday morning after the S&P 500 had its worst session since April, as investor evaluated the start of second-quarter earnings reporting season.

Banks kicked off earnings results Friday. Wells Fargo shares tumbled 6% after the bank said net interest income, a key measure of lending profitability for banks, fell short of expectations in the second quarter. The bank also continues to see net interest income falling from 7% to 9% this year. JPMorgan shares were down slightly even as the bank posted second-quarter revenue higher than Wall Street expectations on a jump in investment banking fees.

Investors’ move out of tech stocks on Thursday was spurred by a consumer price index report that showed a 0.1% monthly decline in June. Traders flocked to areas of the market that will benefit from Federal Reserve interest rate cuts, including small-cap stocks. Indeed, the Russell 2000 jumped about 3.6%.

On the economic front, traders will be looking toward June’s producer price index results. July’s preliminary consumer sentiment numbers from the University of Michigan are also due.

Portfolio:

We saw possibly the one of the dumbest headlines this year from a money manager this morning.  Stating yesterday was a taste of what the second half of the year will bring.  These headlines are exactly what continues to feed this market move and the hated rally.  It also strengthens are narrative of the chase for performance come the end of 2024 and into 2025.  So many continue to miss this move and it truly is still early.  They continue to chase the short side and feel this has been the narrative for the past 8 to 10 months.   But nothing has changed technically or for the bulls.  I would be willing to bet that by end of month all the move yesterday in the Nasdaq is returned plus more.  Welcome this.  It only allows us to add at better prices.

No changes needed for our current positions in NIO, GBTC, and CORZ.  Now sure we will add today, possible, but no reason to force anything on a Friday.  Monday, with monster earning reports on the horizon, should begin the next stage of movement.  Be ready today.