Risk-On?

Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Wednesday, Aug. 7. The Bottom Line segment of today’s podcast starts at (4:16) for listeners who want to skip ahead. ‘Stocks on the Contrarian Radar’ is at the bottom of this page.

State of Play

Stocks recovered some ground yesterday after Monday’s epic selloff, but closed off the highs. After the close Airbnb (ABNB 0.00%↑) and Wynn (WYNN 0.00%↑) earnings disappointed, sending a potentially ominous sign for the travel sector and consumer discretionary spending. Supermicro (SMCI 0.00%↑) earnings also missed.

As we look at our board of indicators for signs of direction at 0650, that all appears forgotten however and risk-on is the mood:

• Stock index futures are pointing to a higher open led by small caps. The Russell 2000 is up 1.6%. Nasdaq futures are 1.4% to the good, with the S&P 500 up 1.1%;

• Cryptos are going along with this, with Bitcoin up 4.5% to trade around $57,500;

• Commodities are mixed. WTI crude oil is up 1.2% to trade around $74/barrel but copper is down 1.3%;

• Bonds are down a bit. The 2-year yield is up 5 basis points to 4.03% with the 10-year up 4bps to 3.93% (yields move inversely to prices).

Today’s Known Events

Earnings are once again the main story. Make that the only story:

• Disney (DIS 0.00%↑) earnings appear to have disappointed investors as the stock is dropping in the pre-market;

• Lyft (LYFT 0.00%↑) earnings fell short on gross bookings and that stock is down 9% in the pre-market;

• Sony (SONY 0.00%↑) and Clear Channel Outdoor (CCO 0.00%↑) both raised guidance and are moving higher in the pre-market;

• CVS Health (CVS 0.00%↑) earnings were mixed and that stock is dropping in the pre-market, down 5% at the time of this writing;

• Shopify (SHOP 0.00%↑) is also due out before the open at 0930;

• After the close we’ll hear from Robinhood Markets (HOOD 0.00%↑), Monster Beverage (MNST 0.00%↑), and others.