Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets in the day ahead. Today is Friday, July 21. This briefing (though not the podcast) was updated to reflect Amex earnings.
State of Play
It’s a quiet summer Friday. Not an awful lot going on as of 0640:
Stock index futures are pointing to gains, reversing losses from yesterday. The Nasdaq is leading things out, up 0.5%. The S&P 500 is up 0.3%;
Commodities are mixed. Copper is unchanged but WTI crude oil is up >1% to trade around $76.50/barrel. Soft commodities wheat, corn, and soybeans are down 1% to 2%;
Cryptos are retreating a bit, with Bitcoin down 2% to trade around $29,800;
Bonds are unchanged. The 2-year yields 4.85% whilst the 10-year yields 3.85%.
Known Events
We get a few earnings this morning. American Express (AXP 0.00%↑) just reported mixed results and basically trebled loss provisions while reaffirming guidance. The stock is dropping now in the pre-market, down 3.5% at 0705.
Schlumberger (SLB 0.00%↑) and AutoNation (AN 0.00%↑) are also due to report before the open at 0930.
There are no economic data releases to speak of.
The Bottom Line©️
Earnings have been pretty decent, with 75% of S&P companies so far beating estimates, roughly in line with the three-year average of 80%. The chips slowdown (so far just cited by one company, Taiwan Semiconductor (TSM 0.00%↑)) discussed yesterday did weigh on the Nasdaq as it dropped 2%. That leaves the Nasdaq with a small loss for the week, but one it is poised to recover according to futures.
Next week the focus will shift back to the Federal Reserve, which concludes its two-day policy meeting on Wednesday. A 25bps rate hike is seen as a done deal, with 99% of futures traders pricing in such a move. Then another pause is expected, with just 16% betting on an additional rate hike at the September meeting. It’s a massive week of earnings too, with tech giants Microsoft (MSFT 0.00%↑), Google/Alphabet (GOOG 0.00%↑), and Amazon (AMZN 0.00%↑) all reporting.
Housekeeping
Obviously this is not investment advice (duh). Do your own research, make your own decisions.
The Substack chat tracks the author’s trades in (almost) real time. The full portfolio is available upon request.
Be sure to check out our Substack notes, for more contrarian thoughts and missives throughout the day.
If this daily thing is drowning your inbox and/or you CBF to bother with it and prefer to just get the guest feature or actionable highlights — you can control these settings on your account page.
Also:
Please take the listener survey! It’s like, five questions and should only take a few minutes of your time. You can win free merchandise. A lucky respondent will be selected each month to receive a classic crew-neck T-shirt.
Referrals. The best way to support this work. Invite friends to subscribe and read/listen with us. Use this referral link:
There are benefits:
Get a 1 month comp for 3 referrals
Get a 3 month comp for 5 referrals
Get a 6 month comp for 25 referrals
Leaderboard leaders:
At the end of each month the current leader will receive a free Contrarian Investor mug. Will even pay for shipping!
A Few Earnings