Ahead of the open, 19-07

Market continues its bounce to post EZ Summit highs as micro outduels the macro.  Incidentally, the words ECB, EU summits, sov’ yields…..have not been appeared on these pages since the move from July 13 lows began.  Hopefully this reference to EZ doesn’t jinx things!.  The trough to peak move of over ~45 SP has been off earnings, but also because of the quietness in the EZ.

As far as earnings..

A few faults noted last week and yesterday (lagging higher beta ‘growth’/ SOX) reversed today off the notable INTC report, while missing and lowering guidance INTC traded up 3% and led the SOX to bounce 3% after it hit multi month lows yesterday.  INTC was called notable here prior to report because of the numerous pre-announcements in the sector.  INTC relates and falls into the catagory…“..the turning point for the market will be when bad reports start to turn and go ‘green’.  EMC QCOM  fall into this premise as well.   Bad reports this Q are any that simply don’t beat the watered down consensus estimates already in place.

The other sector causing recent concern was the industrials, especially since CMI’s warnings.  Today HON, GWW  had better than expected earnings.

The third type of report was just a pure good old fashion beating with VMW up 10%, (which helped all the higher beta software, cloud types today)....

..and MLNX  (up 40%) after hours showcased.. ..”A silver lining in the approach, “Sitting back and waiting for ‘surprise outlook’ earning report from single stocks”… is these stocks will likely be handsomely rewarded as traders look for any signs of corporate ‘growth’ life. 

As noted to start the week following good enough bank earnings,…” All of the above factors are elements of a dead cat bounce unless the heavy loaded earnings week ahead is greeted with the same ‘good enough’ sentiment”…is playing out!.   A dead cat bounce has turned into more due to earnings reactions, but the truth still lies in getting over post-summit highs.  The combination of good enough earnings trend seen and quietness in EZ needs to stay on track for this to occur and escape the range binding summer.