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Here is a quick recap of Markets for the Week of July 19th, 2024 and what we are watching this week
S&P 500 $SPY -2.0%
Nasdaq Composite $NDX -3.6%
Dow Jones Industrial $DJI +0.7%
Russell 2000 $IWM +1.7%
It was a losing week for the stock market, but it wasn't necessarily a losing week for the broader market. 🤔
The losses were not broad based; they were concentrated among the mega-cap stocks and many of the growth stocks (mostly the semiconductor sector), that had been previously favored by the momentum crowd.
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Key points from last week:
Semiconductor selloff - the Biden Administration is considering tightening export restrictions to China, and former President Trump said Taiwan should be paying the U.S. to defend it while bemoaning how much semiconductor production occurs in Taiwan versus the U.S. 🔴
Ongoing rotation trade - not everything sold off there was an upbeat view contributed to an ongoing rotation that boosted small-caps, cyclicals, and the value stocks at the start of the week 🟢
Global IT outage - was triggered by a flaw in a technical update CrowdStrike (CRWD) was trying to implement which infiltrated Microsoft's (MSFT) operating system 😩
Earnings - were mostly better than expected, highlighted by pleasing news from Bank of America (BAC), UnitedHealth (UNH), Goldman Sachs (GS), Taiwan Semiconductor Manufacturing Company (TSM), Johnson & Johnson (JNJ), and SLB (SLB) 🤓
S&P 500 Heat map for the week
Sector Performance Breakdown for last week
The Week Ahead
Monday, July 22nd - Friday, July 26th, 2024
Attention this week will be focused on:
Existing Home Sales - After May's 4.11 and April's 4.14 million annualized rates, existing home sales in June are expected to ease slightly to a 4.00 million rate.
- Existing home sales tally the number of previously constructed homes, condominiums and co-ops in which a sale closed during the month. Existing homes (also known as home resales) account for a larger share of the market than new homes and indicate housing market trends.New Home Sales - New home sales have been especially volatile in recent months including revisions. After May's depressed 619,000 annual rate that followed April's strong 698,000, forecasters see sales in June improving to 640,000.
- New home sales measure the number of newly constructed homes with a committed sale during the month. The level of new home sales indicates housing market trends and, in turn, economic momentum and consumer purchases of furniture and appliances.
Gross Domestic Product GDP - Second-quarter GDP is expected to improve to 1.8% annualized growth vs. first quarter growth of 1.4%. Personal consumption expenditures, after the first quarter's 1.5%, are expected to rise 2%.
- Gross Domestic Product represents the total value of the country's production during the period and consists of the purchases of domestically-produced goods and services by individuals, businesses, foreigners and government entities.
Personal Income and Outlays - Personal income is expected to rise 0.4% in June with consumption expenditures expected to increase 0.3%. These would compare with May's increases of 0.5% for income and 0.2% for consumption.
- Personal income represents the income that households receive from all sources including wages and salaries, fringe benefits such as employer contributions to private pension plans, proprietors' income, income from rent, dividends and interest and transfer payments such as Social Security and unemployment compensation.
Most Anticipated Earnings this week
$SPY: S&P 500 pulled back to our 550 target last week on profit taking from the mega cap names in a seasonably weaker period for markets (end of July)📉
We saw continued rotation as market sentiment attempts to broaden out in hopes of a September Fed rate cut.
Now it’ll be up to earnings to decide if we hold or see some more relative weakness the next 3-4 weeks.
SPY reclaim of 553 look for 558,562,565 and 570. Under 548 pulls back to 542 and 536
Trades Recap 📊
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🏦 $FAS: Financials $XLF showed relative strength last week +1.13%, which helped our $FAS (Financials Bullish 3x leveraged ETF) swing as it tagged our $120 price target for +17.42% gain.
We did a video for prime subscribers explaining why we like banks heading into the second half of 2024 and how we plan on trading them.
Message us if you’d like to see it 📲
💾 $TSM: Taiwan Semiconductor from our watchlist last week gave a quick -8% drop on earnings and politics talk.
📈 If you are interested in making your money work for you by getting our swing trade alerts ahead of time, reply back or comment “Swing Trade” below for more information.
🚨Watchlist 👨🏫
🚘 $TSLA: Tesla is set to report earnings on Tuesday after the close, after a big breakout in late June this will decide if the move continues or a pullback is iminent.
Wall St is expecting adjusted earnings of 61 cents a share on sales of $24.3 billion, which would compare with adjusted earnings of 91 cents on sales of $24.9 billion in the second quarter of 2023.
TSLA reclaim of 255 has room to 265,275,285. Under 228 pulls back to 215 and 200
💻$GOOG: Alphabet will also report earnings on Tuesday. The company’s cloud services arm — Google Cloud — has become the key catalyst behind its business growth.
In Q1 2024, Google Cloud revenues rose 28.4% y/y to $9.6 billion, accounting for 11.9% of the quarter’s total revenues.
For Q2, Google Cloud revenues is pegged at $10.08 billion, suggesting growth of 25.5% from the year-ago quarter’s reported figure.
GOOG reclaim of 185 has room to 195 and 210. Under 175 pulls back to 160 and 150
$MMM: 3M Company reports earnings on Friday, it recently broke out of steady downtrending channel it was in since August of 2021. We are watching for a new reversal pattern possibly forming here.
Wall St. expects quarterly earnings of $1.66 per share representing a year-over-year change of -23.5%. Revenues are expected to be $5.89 billion, down 29.3% from the year-ago quarter.
MMM over 106 has room to 112,120,130. Under 100 pulls back to 95 and 90
*None of these stocks above are recommendations to buy, sell or trade. We do not give financial advice, you should always do your own due diligence and practice proper risk management.*
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