Significant News Flow Is About to Hit and Shake Things Up
Several big events are on the horizon that will be market movers. And here's the good news about all this news.
You've reached your free article limit
You've read 0 of 1 free Pro articles.
With the help of a strong earnings report from Tesla TSLA, the indexes bounced back on Thursday from its worst day in a while. The positive action is continuing on Friday morning as market players await some minor economic news.
There are several big events on the horizon that will determine whether we see another up leg in the action or a change in market trend to the downside.
The first big event will be earnings next week from Google GOOGL, Eli Lilly LLY, Meta META, Microsoft MSFT, Amazon AMZN, and Apple AAPL. The Magnificent Seven (MAGS) names have lost some of their relative strength in recent months, and there are questions about the monetarization of AI. Simply saying "artificial intelligence" is no longer enough to attract buyers. Market players want to start seeing some bottom-line results rather than just huge investments.
The strong response to Tesla’s earnings suggests that good reports will be rewarded, but expectations for these stocks are quite high, and a minor slip is likely to be harshly punished. The price action next week will be key.
The second event will be more economic news, such as Consumer Sentiment, CPI, and October jobs, before the FOMC interest rate decision on November 7. There has been increased concern that the weakness in the bond market is signaling a more hawkish Fed. Although a quarter-point cut is still highly anticipated, Jerome Powell’s comments may not be market friendly.
The third event is the election in less than two weeks. Market pundits are speculating about a Republican sweep, which is viewed as a market positive but likely to be inflationary as well. The biggest near-term danger is that the election is close, and there is no clear winner for several days. That is likely to cause severe problems for the market, especially if it becomes hostile.
Another event is the upcoming meetings in China about its stimulus programs. Chinese stocks faded after programs were initially introduced, and now we will see if they can be inflated again.
The good news about all this news is that it is going to create some volatility and uncover some individual stocks that have performed well in the most recent quarter. It should be a good market for trading, but there will be plenty of landmines if bad news surprises.
I’m trading more aggressively than normally and trying to take advantage of increases in volatility.
At the time of publication, Rev Shark had no positions in any securities mentioned.
