THE GIST (“THE WHAT”)
Gapping higher at the open, the S&P 500 index struggled to maintain the gains after hitting a 16-month high. Eventually giving up gains during the afternoon session, the index tumbled as yields jumped higher following reports that the Bank of Japan could raise its long-term interest rates. The index closed the session near day’s lows at 4537.40, down modestly by 29.34 points (-0.64%).
Note: Our daily “S&P 500 Trading plan” will be posted around 9:30/10:00am EDT, every trading day.
Trading Plans for THU. 07/27: The Bull-Goldilocks Is Humming Along
For the last published Results of the Morning Trading Plans, please click here
THE DETAILS (The “How & Why”):
Stocks rallied at the open following a stronger-than-expected U.S. second-quarter GDP that grew at a 2.4% annualized rate. The U.S. weekly initial unemployment claims fell unexpectedly by 7,000, registering a 5-month low of 221,000, indicating a resilient labor market. The pending home sales also unexpectedly rose by 0.3% month-on-month, much stronger than the expectations of a 0.5% decline. The 10-year treasury yield jumped higher to close at 4.004%.
Technology stocks jumped higher after Meta Platform reported better-than-expected second-quarter earnings. Chip stocks also traded higher after Samsung Electronics gave an optimistic outlook that the artificial intelligence could boost memory demand this year. Align Technology, Lam Research, and Textron were the top gainers of the session, soaring 13.4%, 11.9% and 9.3%, respectively on the back of stronger-than-expected quarterly earnings.
On the flip side, Ebay, Chipotle, and Edwards Lifesciences were the worst decliners of the session on missing earnings estimates, each tumbling more than 9%. Airline stocks also slipped in today’s session after Southwest Airlines reported a drop in earnings in the wake of higher fuel costs and slower-than-expected recovery in business travel, falling 9%.