MARKET WRAP

Stocks were mixed today but SPX and Nasdaq were able to notch new highs, despite a post-earnings drop in Tesla. Other Mag7s, including Alphabet edged higher. Small caps gave back some of yesterday’s gains. There were some other sharp moves lower on earnings including IBM, LUV, and CMG. On the day: SPX +0.1%, QQQ +0.3% and IWM -1.4%.

Elsewhere, the US10YY was up a tick to 4.40%, Gold pulled back slightly as Oil edged higher. The VIX briefly dipped below 15 before finishing the day unchanged.

Notable Gainers: TMUS +6%, AMD +2.3%, GOOGL +1%, AMZN +1.8%, NVDA +1.6%, MSFT +1.2%

Notable Losers: TSLA -8%, IBM -7.7%, UNH -4.6%, INTC -3.7%, DOW -17%, LUV -11%, CMG -11%

After hours: INTC is higher by about +1% on earnings after today’s sharp move lower into the print. NEM is higher by about +2%.

• MRKT Call: Guy and Dan with a look at some earnings gaps, including Tesla and IBM. Google earnings and the insane levels of AI CapEx. And the weekly SoFi report on euphoria, recency bias and more.

MRKT MATRIX: TODAY’S TOP STORIES

• Nasdaq, S&P 500 hit fresh records after strong Alphabet earnings (CNBC)

• Trump Says Countries Will Face Tariffs Ranging From 15% to 50% (Bloomberg)

• Tensions simmer as Xi courts EU while Brussels demands trade rebalance (CNBC)

• Tesla Braces for ‘Rough’ Quarters as US Ends EV Incentives (Bloomberg)

• Is AI Killing Google Search? It Might Be Doing the Opposite (WSJ)

• Sydney Sweeney sparks latest meme stock rally as American Eagle soars 18% (CNBC)

WHAT’S NEXT?

One of the standout features of this week’s tape is the continued collapse in implied volatility. The VIX and other vol measures keep falling, even on a mixed day like today, reflecting a market with little fear of sudden downside. That doesn’t just reflect confidence, it can create it, as falling implied vol tends to mechanically support drifts higher in the indices. 

Today’s strength in the S&P and Nasdaq was much more concentrated than yesterday’s, with the Mag7 names doing most of the heavy lifting. Under the surface, there’s still plenty of churn, some signs of exhaustion in parts of the market, and some noticeable sector rotation chaos from day to day. But the underlying index bid remains. 

So while the collapsing VIX is supportive to the SPX rally continuing, one slightly nerdy but useful thing to keep an eye on is skew—specifically the CBOE SKEW index. It’s now up near 160, a jump from around 125 back in April. That basically means volatility is looking more expensive far out on the tails compared to near the money. A lot of that is just because at-the-money vol has fallen so much, which makes those tail options look pricier in relative terms. But if skew keeps climbing while the VIX bottoms out (which is possible at 15), that can start to signal some speculative froth, early institutional hedging—or both. We’re at 160 now, but if it pushes above 170 in the days or weeks ahead, it could be an early sign that this rally is starting to lose the smart money and is just running on speculative fumes.

Looking ahead to tomorrow, it’s a pretty quiet one—nothing major on the earnings or econ front. It’s not a big expiration Friday either, but a move higher toward 6400 on the open (and maybe a rejection there) is definitely in play if we don’t see negative news overnight.

• Friday, July 24th

  • Pre-market: AN 6%, PSX 2.8%

  • 8:30am - Durable Goods

TODAY’S EPISODES

Watch MRKT Call’s newest episode: Mind The Gaps! $GOOGL, $TSLA, $IBM & $CMG Technical Analysis

A look at some of the names gapping lower on earnings, including Tesla and IBM. Google’s earnings and the insane levels of AI CapEx. The impact of interest rates on government debt. And, the weekly SoFi report on euphoria, recency bias and more

• Analysis: SPX, GOOGL, TSLA, IBM, NOW, CMG, SG, BRK.B, LUV, AAL, DAL, 

• SoFi Weekly Report: The dangers of recency bias in investing, US vs Overseas performance, historic pessimism turned to euphoria now? Dealer positioning is more short here than at the Spring lows. 

• Your Questions:

  • WAVY MCFLY - Question for Guy, have you noticed that with every “trade deal” that’s announced, we’re actually getting sell offs in Treasuries, not bids, what is this telling us?

  • Ethan Lipp - Any thoughts on a couple charts: ASML, TXN & BRK/B?

Learn more about our sponsor, SoFi.

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