Financial News vs. Noise
Kind of assumed a nothing day ahead of all this weeks events. Pretty much got that except for a last minute run that looks like it was fueled by options. Today we have LLY earnings leading things off with AI related names after hours-AMZN, SMCI, and AMD to name a few. SMCI is a key customer of NVDA so the market will be expecting it to reflect NVDAs strength. Remember it was the absence of a pre announcement by SMCI that led to the 10% decline in NVDA the other day. Along with AI, weight loss drugs is one of the major themes we have been trading all year. I believe that most people given the choice of taking a drug vs. changing their diet and working out will choose the drug. I do think there could be side effects that are not being talked about, but that’s tinfoil hat stuff and also reflects my overall distrust of big pharma.
LLY looks like it is in a downtrend here. It’s just below the 10 day which could be a short entry if it can’t move back above.
The Treasury announced their quarterly refunding late yesterday, which briefly tanked stocks. Bonds seemed to shrug it off, but again keep an eye on rates. I do think this may end up being important, but right now not so much…..
Treasury Department raises its second-quarter borrowing estimate-MarketWatch
The Treasury Department said Monday it expects to borrow $243 billion in the second quarter, which is $41 billion higher than previously estimated.
The increase was driven in part by lower projected cash receipts for the second quarter. The updated forecast includes an end-of-quarter cash balance of $750 billion.
Tomorrow they announce the how, which could be more important. Why Wall Street Shouldn’t Be Scared of Treasury’s New Debt Plan-Barron’s
Despite higher borrowing estimates, market strategists don’t expect higher issuance of medium- and longer-term bonds for the current quarter. Instead, they expect Treasury to fill the gap by issuing more Treasury bills. Wall Street generally considers this announcement, which will be out on Wednesday, more significant for yields than Monday’s news of increased borrowing.
SPY bumped up against it’s 50 day and couldn’t break through. That would be my key level for today. Again, I don’t expect much out of today with all the events after hours and FOMC tomorrow.
TSLA was the news yesterday and it is down a bit pre market, which is to be expected. There is resistance in the $205 area on the upside and I would watch yesterday’s low of $184.54 on the downside. The bears were not impressed
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