Day Traders Diary

7/12/21

The major averages rebounded from an early sell off with the S&P 500 making new highs while the Dow Jones Industrial Average touched 35,000 for the first time.

The broad index added 15 points or 0.34%. The Nasdaq Composite traded up 31 points or 0.21%. The Dow Jones Industrial average rose about 1263 points, or 0.36%. The three major indexes closed at record highs on Friday with the S&P 500′s gain for the year so far now totaling more than 16%.

Investors may be waiting to get some more clarity from this earnings season before making their next move. JPMorgan Chase and Goldman Sachs will be among the first big companies to report Tuesday before the bell. Both were slightly higher on Monday.

Second-quarter earnings are expected to surge more than 64% from levels depleted by the pandemic a year ago, according to estimates collected by FactSet. If companies deliver on those estimates, it will be the largest growth rate since the last quarter of 2009 as the market was coming out of the Great Financial Crisis.

Markets largely churned on Monday. Names linked to economic comeback from the pandemic were slightly weaker with Carnival Corp. and General Electric lower. Technology stocks showed pockets of strength with Tesla and Nvidia higher.

Shares of Walt Disney gained after "Black Widow" earned $80 million at the domestic box office from its debut, the most of any film released in the Covid era. The company also said it garnered an additional $60 million from the movie in Disney+ sales.

Earnings season will largely be the driver of the markets in coming weeks and early signs are looking good. So far, 66 S&P 500 companies issued positive earnings guidance into the second-quarter reports, the highest number of companies since FactSet began tracking the number. All 11 sectors of the market are set to post growth with energy, industrials, consumer discretionary, financials and materials seeing the biggest gains as the economy reopened.

Along with JPMorgan and Goldman Sachs, Pepsico will also report on Tuesday before the bell. Bank of America, Citigroup, Wells Fargo, Delta Air Lines and BlackRock report on Wednesday, and Morgan Stanley, Truist and UnitedHealth post results on Thursday.

Investors also anticipate important data to be released this week, including key readings on inflation on Tuesday and Wednesday, and June retail sales on Friday.

Federal Reserve chair Jerome Powell is set to testify before Congress on Wednesday and Thursday.