THE GIST (“THE WHAT”)
Consolidating near 15-month highs, the S&P 500 index traded sideways ahead of mega-tech earnings. Bank stocks extended their gains in the wake of better than expected second quarter earnings results, while tech stocks gave up some of their recent gains following a strong recent rally. The index closed today’s choppy session with a modest gain of 10.74 points (0.24%) at 4565.71.
Note: Our daily “S&P 500 Trading plan” will be posted around 9:30/10:00am EDT, every trading day.
Trading Plans for WED. 07/19: Q2 Earnings Releases Gain Momentum – Day 3
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THE DETAILS (The “How & Why”):
In today’s economic news, U.S. housing starts fell by 8%. June building permits, a proxy for future construction, also fell unexpectedly by 3.7%. The 10-year Treasury yield fell 4.6 basis points to settle at 3.739%.
Big banks added to their recent gains after Goldman Sachs reported an upbeat outlook amid signs of recovery in its investment banking. Regional banks also traded higher, led by a strong 13% rally in Northern Trust on reporting a second quarter recovery of credit losses of $15.5 million, beating analysts’ estimates by a huge margin. Citizens Financial and M&T Bank also rose 6.39% and 2.48%, respectively on earnings beat.
AT&T clawed back some of its sharp losses, jumping 8.5% after telecom giant announced that less than 10% of its nationwide copper-wire telecom network had lead-clad cables. Verizon also rose 5.27% on this news.
On the bearish side, Omnicom Group Inc led the losers within the index, tumbling 10.4% after the global marketing company reported a weaker than consensus revenue of $3.61 billion as against the expected revenue of $3.67 billion. Align Technology was another sharp decliner, falling 5% on stock downgrade.
Technology stocks gave back some of their recent strong gains. Microsoft shed 1.23% following reports that Apple is planning to launch AI products. Alphabet and Nvidia also fell 1.40% and 0.88%, respectively.