- Morning Briefing w/ KevinD
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- Friday July 26 @ 9:00am
Friday July 26 @ 9:00am
KevinD
July 26, 2024
"Successful contrarian investing requires us to live with discomfort, for being "wrong" and alone. But bargains do not exist in the absence of fear."
📺️ Programming Note
On Fridays during the summer we’ll be publishing a condensed version of our regular newsletter. Economic and earnings events for the day, along with some brief commentary will be included, however, we will not be able to cover overnight and pre-market action. Enjoy your weekend!
💵 Economic Reports and Events Today
Consensus forecasts shown
8:30am Core PCE Price Index m/m: 0.2% expected, 0.1% previous. Change in the price of goods and services purchased by consumers, excluding food and energy. (link)
8:30am PCE Price Index m/m: 0.1% expected, 0.0% previous. Change in the price of goods and services purchased by consumers. (link)
8:30am Personal Income m/m: 0.4% expected, 0.5% previous. Change in the total value of income received from all sources by consumers. (link)
8:30am Personal Spending m/m: 0.3% expected, 0.2% previous. Change in the total value of spending by consumers. (link)
10:00am Revised UoM Consumer Sentiment: 66.3 expected, 66.0 previous. Level of a composite index based on a survey of about 500 consumers which asks respondents to rate the relative level of current and future economic conditions. (link)
10:00am Revised UoM Inflation Expectations: 2.9% previous. Percentage that consumers expect the price of goods and services to change during the next 12 months. (link)
All Day G20 Meetings continue. Global leaders meet to discuss international economic cooperation and decision-making. (link)
📰 Selected Earnings Releases
Consensus Estimates shown
After Hours Today:
None
Pre-Market Monday:
💬 Commentary
The market was bifurcated yesterday, with performance split between large-caps and small-caps. While large-caps initially rallied strongly after an early selloff, the selling resumed after lunch, causing SPY and QQQ to give back all gains and close near the day's low, down 0.5% and 1.1%, respectively. The rally was driven by signs of a strong economy, indicated by the higher-than-expected Q2 GDP report, but persistent concerns about tech sector earnings weakness overshadowed this positive data.
Small caps, however, showed strength from the start, rallying through the lunch hour before succumbing to some of the same fears. Despite this, IWM managed to hold onto a significant portion of the day's gains, closing 1.25% higher. Energy was the strongest sector, up 1.75%, followed by industrials and financials. In contrast, the communications and technology sectors continued to lag, each down more than 1%. Late in the day and into the after-hours we saw very early signs of a recovery in crypto, especially Bitcoin, and in precious metals.
This morning, the Fed's favored inflation measure, the Personal Consumption Expenditures (PCE) report, will be released before the market opens. This report will be crucial for the small-cap recovery observed yesterday. An inline or slightly softer-than-expected report will likely be favorable for small caps and could potentially lift the large-cap indices out of their current funk. Conversely, a hot number could push the market into correction territory as traders lose faith in the prospect of a September rate cut.
⛵ When you’re ready…
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A powerful yet simple fundamental analysis tool: Stock Unlock
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#1 charting software for serious traders: TradingView
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