The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Uninspiring
Markets began the day calmly and stayed that way through the close. The beginning of earnings season didn’t spark a trend in the broader markets and neither did the return of trading to the bond market. The S&P 500 opened slightly lower and traded mostly near flat. Yields came in 1-3 bips, but that didn’t appear to inspire equities. Crude didn’t move much either and seems to have had little influence on stocks as well.
I wondered yesterday whether stock investors were waiting on some earnings reports and the return of bond trading to get going. Apparently not. The start of earnings season not only was uninspiring to the rest of the market, but it was also disappointing to the reporting stocks themselves.
7 S&P 500 stocks reported today
6 beat EPS estimates, 1 missed today
Beta-adjusted:
The market will likely focus on the mega cap tech stocks when they report so today’s earnings and stock reactions could rightly be set aside in terms of their significance, but I don’t like it. I worry that the concentration of value in the mega cap tech stocks has gone too far. Are we really just watching the Mag 7 plus a few other names as a proxy for the entire market?
The market caps of the biggest components of the S&P speak for themselves but JNJ and JPM are among them and it feels like this earnings season just kicked off with a dismissive attitude of anything that isn’t AI-connected tech.
See you tomorrow.
-Mike
Visdom Market Commentary
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