THE GIST (“THE WHAT”)
Netflix and Tesla extended their previous session’s declines as investors digested disappointing earnings, weighing down on the tech sector and capping gains within the broader S&P 500 index. The index managed to eke out nominal gains led by utility stocks alongside sliding yields, closing the session at 4536.35, up slightly by 1.49 points (0.03%).
Note: Our daily “S&P 500 Trading plan” will be posted around 9:30/10:00am EDT, every trading day.
Trading Plans for FRI. 07/21: Volatile Triple Witching Friday
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THE DETAILS (The “How & Why”):
Technology extended their slide, giving back some of their recent strong gains that were stoked AI optimism. Disappointing earnings by Netflix and Tesla further dampened sentiment within the sector. Nvidia and Meta Platform slipped more than 2% each, while Microsoft closed 0.89% lower ahead of key earnings release by mega-cap tech stocks and Fed’s policy meeting next week.
Recent economic data suggests that the labor market continues to remain robust despite signs of overall economic softness, reaffirming the Fed’s ‘higher for longer’ policy stance. Microsoft, Alphabet, Meta Platforms and Amazon.com will be reporting their quarterly earnings next week.
The 10-year Treasury yield fell 1.3 basis points to 3.837%. Dividend paying utility stocks were bought back as yields fell across the board. NextEra Energy and Southern Company were the strongest performer within the sector, jumping more than 2% each.
Losses were capped within broader index on the back of some strong gainers on the back earning beats. Zoetis soared 6.9% to lead the gainers on receiving FDA approval for its NextGard Plus, a beef-flavored chew that protects dogs from internal and external parasites. Danaher Corporation and Thermo Fisher Scientific Inc were other strong gainer, up more than 2% each on strong earnings.