Amazon Pukes on Forward Guidance, Takes Down the Entire Market
Happy Friday, folks! Welcome to the final trading day of July. What a month it's been, but the real shock here imo is the fact that the S&P has essentially (as of now) tagged 6 straight months of gains. DJ Powell must be exhausted standing at the booth, spinning every story of economic hardship into a love song for his retail permabull ravers.
Amazon's earnings last night really shook markets, though. We saw a roughly -6% sell-off after Amazon's forward guidance came in significantly below estimates. Not that they're the only one's but when even the golden child of the market is seeing headwinds coming, it's time to reassess those nose bleed 2H estimates. Consider approx. 50% of S&P earnings are in and 91% beat, this could be as good as it gets for the "recovery."
Moments ago we saw PCE and Core PCE data come in at 0.5% vs the 0.7% expected, and 0.4% vs the 0.6% expected, respectively. Literally everything beat estimates this morning, with Personal Income coming in at 0.1% vs the -0.6% expected, while Personal Spending rose 1% vs the 0.7% expected. The Employment cost index rose 0.7% vs the 0.9% expected. Sounds like they keep changing those estimates so we get a technical beat. But, make no mistake, we just saw YoY Core PCE rise 3.5% vs the 3.4% rise in May. According to ZeroHedge, this is the highest level since 1991 (30 years ago). Still, I imagine Powell yawning when he sees today's inflation print. We'll see the Chicago PMI print around 9:45AM, and then Consumer Sentiment for July at 10:00AM.
Stocks appear to be holding firm after the scorching hot US PCE prints. As of 8:45AM the S&P was down -0.64% to 4,390.90, the Dow was down -0.23% to 35,003, the Russell was down -0.40% to 2,232, and the Nasdaq was down -1.14% to 14,877. The Vix continues to rise off the recent test of trendline support around 15. We're sitting at a 19 handle, and look poised to spike on potential heavy month end equity outflows. Having said that, every time Goldman or BofA say we should see Billions in outflows on portfolio rebalancing, we end up closing higher. I don't know if that's PPT, corporate buy-back flows, or retail gone wild. Could be a combination of all.
In crypto, Bitcoin (BTCUSD) is holding on to a 38k handle for now, but we're down around -3% on the day and looking shaky after the 21EMA (w)/ 100DMA (40k) rejection. Ethereum (ETHUSD) is running out of steam also, having failed to break out of the July high around 2,400. We never made it to the 100DMA (2,535), but the bulls did recapture the 21EMA (w) around 2,171, in convincing fashion. Let's see how the US Equity Put/Call (PCE) shapes up to end the month, and if we can get any real sense of a shift in broader market sentiment heading into August.
Our live analysis begins at 9:30AM! Cheers, Michael.
* I am/we are currently long HUV, UVXY.
Amazon's earnings last night really shook markets, though. We saw a roughly -6% sell-off after Amazon's forward guidance came in significantly below estimates. Not that they're the only one's but when even the golden child of the market is seeing headwinds coming, it's time to reassess those nose bleed 2H estimates. Consider approx. 50% of S&P earnings are in and 91% beat, this could be as good as it gets for the "recovery."
Moments ago we saw PCE and Core PCE data come in at 0.5% vs the 0.7% expected, and 0.4% vs the 0.6% expected, respectively. Literally everything beat estimates this morning, with Personal Income coming in at 0.1% vs the -0.6% expected, while Personal Spending rose 1% vs the 0.7% expected. The Employment cost index rose 0.7% vs the 0.9% expected. Sounds like they keep changing those estimates so we get a technical beat. But, make no mistake, we just saw YoY Core PCE rise 3.5% vs the 3.4% rise in May. According to ZeroHedge, this is the highest level since 1991 (30 years ago). Still, I imagine Powell yawning when he sees today's inflation print. We'll see the Chicago PMI print around 9:45AM, and then Consumer Sentiment for July at 10:00AM.
Stocks appear to be holding firm after the scorching hot US PCE prints. As of 8:45AM the S&P was down -0.64% to 4,390.90, the Dow was down -0.23% to 35,003, the Russell was down -0.40% to 2,232, and the Nasdaq was down -1.14% to 14,877. The Vix continues to rise off the recent test of trendline support around 15. We're sitting at a 19 handle, and look poised to spike on potential heavy month end equity outflows. Having said that, every time Goldman or BofA say we should see Billions in outflows on portfolio rebalancing, we end up closing higher. I don't know if that's PPT, corporate buy-back flows, or retail gone wild. Could be a combination of all.
In crypto, Bitcoin (BTCUSD) is holding on to a 38k handle for now, but we're down around -3% on the day and looking shaky after the 21EMA (w)/ 100DMA (40k) rejection. Ethereum (ETHUSD) is running out of steam also, having failed to break out of the July high around 2,400. We never made it to the 100DMA (2,535), but the bulls did recapture the 21EMA (w) around 2,171, in convincing fashion. Let's see how the US Equity Put/Call (PCE) shapes up to end the month, and if we can get any real sense of a shift in broader market sentiment heading into August.
Our live analysis begins at 9:30AM! Cheers, Michael.
* I am/we are currently long HUV, UVXY.
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