Cautious Climb as Earnings Boost Sentiment
Healthcare and Banks Lead While Breadth Holds Steady; Eyes on Inflation Data Ahead
I. Headlines & Catalysts
Markets closed higher on Wednesday, overcoming a morning tech selloff. The mood was steadied by political clarity: President Biden confirmed Fed Chair Jerome Powell will not be replaced, reducing speculation risk.
Strong earnings from big banks and healthcare firms also lifted confidence. Meanwhile, the Fed's Beige Book noted slight economic growth from May to July, though inflation remains sticky across all 12 districts. Consumers are getting more vocal about price pressures.
The CPI report showed a 2.7% annual rise in prices, hotter than expected. Furniture, clothing, and core goods are fueling concerns about durable inflation trends.
II. Sector Performance Snapshot
✅ Leaders:
Healthcare (+1.1%)
Real Estate (+0.96%)
Financials (+0.87%) — Powered by strong bank earnings
🟩 Other green sectors: Industrials, Consumer Defensive, Technology
🟥 Lagging:
Energy (–0.61%)
Slight gains in Communication Services, Consumer Cyclical, and Basic Materials
Rotation into defensives and income plays, with healthcare and REITs seeing inflows.
III. Technical Breadth & Sentiment Check
Market Color: Mostly green, positive bias with some caution
Advancers/Decliners (Nasdaq vs. 10SMA): Still below average (Red)
VIX: Low at 17.16 bullish for now
McClellan Oscillator: –33.05 soft momentum, but not extreme
Put/Call Ratio: 0.86 neutral leaning bullish
% Stocks Above 200SMA: 41.44% improving
Guppy Trend Signal: Still in RWB (Red/White/Blue) mode = bullish trend intact
Most sentiment indicators flash green.
IV. Earnings & Corporate News
Goldman Sachs $GS (▲0.9%): EPS crushed at $10.91 vs $9.69 est. Revenue also topped. +22% YoY profit.
Johnson & Johnson $JNJ (▲6.19%): Raised guidance, cut tariff outlook by half — strong quarter.
United Airlines $UAL (▲2.42%): Beat on EPS ($3.87), but muted revenue YoY; stock fell post-market.
Alcoa $AA (▲0.25%): Doubled YoY EPS in Q2, modest response.
Roblox $RBLX: Introduced Netflix-based immersive experiences, bullish brand expansion.
Nvidia joined top picks at Wedbush alongside Meta, Tesla, Microsoft showing AI confidence ahead of earnings.
V. Economic Calendar Highlights
Core Retail Sales (8:30 AM ET)
Jobless Claims (8:30 AM ET)
Philly Fed Manufacturing Index (8:30 AM ET)
FOMC Member Daly speaks (12:45 PM ET)
Atlanta Fed GDPNow update (1:00 PM ET)
Fed Waller speaks (6:30 PM ET)
Pre-Market Earnings to Watch:
GE Aero ($GE)
PepsiCo ($PEP)
Abbott Labs ($ABT)
Novartis ($NVS)
U.S. Bancorp ($USB)
Elevance Health ($ELV)
Cintas ($CTAS)
Travelers ($TRV)
VI. Interpretation & Outlook
Markets are holding up well, powered by resilient earnings and lower volatility. However, participation remains narrow. The CPI surprise has put inflation risks back on the map, and today’s economic releases could add more clarity on growth and cost pressures. For now, the trend holds, but sentiment could shift quickly if economic data underwhelms.
Stay constructive, but selective. Favor high-quality earnings names and sectors. Watch for breadth improvement to confirm bullish conviction.
What to trade today:
Very good continuation IBIT, RBLX, SMR, RTX, LEU, GE and nice breakouts yesterday on TOST and SHOP as per trading plans / watchlists. Missed SERV and RACE.
Stop adjusted and letting the market do what it has to do.
No plan for new trades.