Well, it’s the moment we’ve all been waiting for. This week is likely to be the most volatile week of the summer. Why? Between mega-cap tech reporting earnings, Walmart lowering its quarterly and full-year profit forecast, and the Federal Reserve 2-day meeting, one thing is for sure – it shan’t be dull!
There are so many companies coming up on the calendar. Check out this list to see some of the major names I’m watching (and potentially trading) below:
Earnings Reports on Tuesday, July 26th After Market Close:
Microsoft Corp. (MSFT)
Alphabet Inc. (GOOGL)
Visa Inc. (V)
Chipotle Mexican Grill (CMG)
Texas Instruments (TXN)
Mondelez International (MDLZ)
Teradyne, Inc (TER)
Tuesday Earnings Summary
Several heavy hitters are reporting after the bell on Tuesday, and these tickers, particularly Microsoft and Alphabet, will make all of the difference going into the Fed on Wednesday. In good news, both companies have been soft and have had bad news pre-announced, so it’s possible these moves are priced in. The problem? Alphabet in particular is clinging to yearly lows, and even an expected move to the downside on earnings will send it to a new yearly low. The Nasdaq does not like when one of its core components makes a new low on the year!
Google in the Hot Zone
Notice how a normal, expected, market maker move would send Google careening to a new low on the year? That is no good for Google!
As for the rest of the companies reporting? The chipmakers will react to news from TXN and TER. We should get more information as far as inflation is concerned from CMG, SKX, and MDLZ. I want to know how these companies are handling, and managing, inflationary pressures and how it’s impacting their customers.
I threw ENPH on the list because I think it’s one of the few fantastically looking bullish companies, despite the fact that I’m not as impressed with their system as I thought I would be. I used to be a huge ENPH bull until my solar system started giving me alerts about how it can’t function as well during this Texas heat. I mean, really!?
Earnings Reports on Wednesday, July 27th
Check out the long list of companies reporting on Wednesday, along with the Fed Meeting Minutes! I can’t say any of these companies look favorable as far as upside action is concerned, with the exception of WM. But, WM is not going to ‘save’ the indexes, especially on a Fed day.
Before Market Open:
Boeing Co. (BA)
Spotify Technology (SPOT)
Waste Management (WM)
Bristol-Myers Squibb (BMY)
Major Landmine: *Fed Meeting Minutes
After Market Close:
Meta Platforms, Inc. (META)
Ford Motor Company (F)
Qualcomm Incorporated (QCOM)
Teladoc Health (TDOC)
Etsy, Inc (ETSY)
Lam Research Corp. (LRCX)
ServiceNow, Inc (NOW)
Quantumscape Corp (QS)
Upwork Inc. (UPWK)
Wednesday Earnings Summary:
Honestly, most of the stocks on the Wednesday docket look like a disaster. I would not be surprised to get multiple earnings destruction moves from this list. Hence, why I am still short ARKK. Throw in the Fed and you have yourself a regular party!
Now, this list is nowhere near exhaustive, but simply a list of some of the names that will give me critical information as far as how big name brands and companies are handling the long list of current economic issues. From the strong dollar to high inflation, the ongoing war in Russia & Ukraine, the housing market turn, and more, there is no shortage of issues these companies are facing.
As I look over this list, my primary concern is this – even though a few of them (like Microsoft) look likely to move higher post-earnings, even a simple move higher would not change the overall direction of this downtrend. Most of the companies on this list would need to experience an absolutely explosive move in order to change their longer-term trends.
So, what does that mean?
It means that even if some of them end up reporting on the positive side, those moves likely won’t last long. At least, as long as the broader market continues lower.
And that my friends, depends largely on the combination of the Federal Reserve, plus overall sentiment. The Fed is continuing to purposely send the economy lower along with the stock market, and they will continue doing so until they have clear and convincing signs that inflation is getting under control. And that is something we have yet to see.
The only other catalyst I see on the docket is the possibility that the put/call ratio gets so high and sentiment gets so weak, that we end up rallying simply because everyone is too short – but not because of the economy or stock market are actually improving.
Market Internals Grid
Notice how the indexes keep trying to retest highs and the put/call is creeping around the 1.0 level? The 1.0 level is where I really look for a short squeeze. The Fed has been known to cause a few of those themselves!
So, where do we go from here? Well, I am trading the indexes in both directions, and I’m planning on trading several key earnings reports overnight. I’m still a market bear but my bearishness has toned down a bit with the rally off of the lows. But, I doubt it will last long. Even if we do see another day or two (or three) of upside earnings action, ultimately it will take a lot more than that to correct this trend.
Want to learn more? Join me in the Stacked Profits Mastery for more earnings analysis, including my full watchlist which includes my earnings calendar, Earnings in Focus tickers, Bonus Earnings Deep Dive sessions, and more. We’ll be diving deep into FAANG earnings and the after-effects during our live bonus session on Wednesday, July 27th at 4:30 pm CT. Take the trial now to join me there!