What’s On Tap for Traders: May 1 – 5
What a week!
We had:
- Big earnings beats like Microsoft (MSFT) and Meta (META)
- Whiffs like Amazon (AMZN) and Snap (SNAP)
- First Republic (FRC) melting down
- A slowdown in US GDP
Here's your trading calendar before we dig into one of the busiest weeks of 2023:
(click to enlarge)
First, let's start with a quick review of the recent action:
Tech Dominates… For Now
Stocks finished slightly higher for the month as buyers overlooked Amazon's (AMZN) post-earnings decline, the US GDP miss, and the First Republic (FRC) implosion.
Related: How Jeff Cooper Nailed Amazon at $122
And in an impressive turnaround from a weak start, the SPY finished right at the highs of the day:
Year-to-date, QQQ's is decimating the other major index ETFs thanks to the tech stock boom.
Of course, next week is huge for tech investors thanks to these earnings reports:
- AMD (AMD) on Tuesday
- Qualcomm (QCOM) on Wednesday
- Apple (AAPL) on Thursday
Apple always demands major attention from investors, and the stakes are high thanks to the stock's 29%+ gain this year:
David Prince tells us “Slowing iPhone demand could be offset by the services business picking up steam, but the upside potential looks muted from here.”
If you're interested in trading Apple pre and post-earnings, check out Inner Circle because David and his team will be tracking the stock closely next week.
AMD and Qualcomm should also be on your radar because we'll get insights into where we are in the semiconductor cycle.
And of course, it will be fun to see how many times they say ‘AI' on their conference calls.
Can they top Google, Microsoft, and META, each of whom said ‘AI' nearly 50 times?
Other Earnings Reports of Interest
The fun does not end with tech.
Starbucks (SBUX) reports Tuesday. The stock hit a 1-year high this week in the wake of strong numbers from McDonald's (MCD) and Pepsi (PEP):
So we'll see if the struggling consumer still has cash for those fabulous orange mocha frappucinos:
Crypto exchange Coinbase (COIN) reports Thursday.
Bitcoin has been one of the best-performing risk assets this year, so we'll see if that's driving results for Coinbase, which has been down in the dumps thanks to regulatory threats:
And on Friday, meme stock giant AMC Entertainment (AMC) drops its earnings numbers.
We also have:
- Monday: Stryker (SYK), Vertex Pharmaceuticals (VRTX)
- Tuesday: Uber (UBER), Illinois Tool Works (ITW), Eaton (ETN)
- Wednesday: CVS (CVS), Estee Lauder (EL), Progressive (PGR)
- Thursday: ConocoPhillips (COP), Booking Holdings (BKNG), Shopify (SHOP), Square (SQ), Doordash (DASH)
- Friday: Cigna (CI)
Okay, that's enough earnings talk because…
The Fed Is Dead Ahead
We've got a critical week ahead on the US economic front.
The Fed will announce its latest rate decision on Wednesday.
T3 Live Chief Strategic Officer Scott Redler said “There's a 90% chance they go 25 bps, and most think that's end of the rate hike cycle. This could be an inflection point for this cycle. Many people think the Fed will cut in the second half, but I don't see that happening unless we go to SPX 3700 or lower. If we hold above 4100 and start squeezing towards resistance at 4300, the Fed isn't cutting.”
IMPORTANT: Scott is hosting a Fed Day trading event in the Alpha Team VTF® on Fed Day. You can sign up right here.
Scott's Positions as of 2023-04-28 at 3.39.56 PM
Click to enlarge
On top of the Fed, we've got plenty of employment data coming including:
- Tuesday: JOLTs Job Openings
- Thursday: Initial Jobless Claims
- Friday: Nonfarm Payrolls
We also have some key international reports, including:
- Tuesday: Australia Rate decision, Eurozone CPI
- Wednesday: China Manufacturing PMI
- Thursday: ECB Rate Decision
- Friday: Canada Employment
How do Traders Feel? BEARISH
Do traders hate this market?
Yes.
Hedge funds have the largest net short position in S&P 500 futures since 2011:
Just as large speculators/hedge funds have built largest net short position for S&P 500 futures since 2011 (blue), leveraged investors have also boosted net short positions on 10y U.S. Treasury futures (orange) to record pic.twitter.com/zfcqdrHO57
— Liz Ann Sonders (@LizAnnSonders) April 25, 2023
And the American Association of Individual Investors says just 24.1% of investors are bullish, well below the long-term average of 37.5%:
“Optimism is unusually low for the 49th time out of the past 69 weeks,” AAII says.
Get to Know Kira Turner
Rodeo is more dangerous than NFL football.
And rodeo is where Inner Circle's Kira Turner learned risk management. Learn more about her story in this episode of the Madam Trader podcast:
We'll see you bright and early Monday morning! Good luck out there!