Good morning. This is the busiest week of earnings season. Four of the Magnificent Seven report, the Federal Reserve delivers a rate decision on Wednesday, and the first read on second-quarter economic growth lands Thursday. Today itself is a calm start before all of it.
The Market Gauge
Friday closed out a second rough week, and the three major indexes finished mixed. The S&P 500 edged up 0.05% to 7,411.98 and the Dow Jones Industrial Average rose 0.46% to 51,947.25, but the tech-heavy Nasdaq slipped 0.64% to 24,975.82, ending back below the 25,000 mark. For the week the Dow lost about 0.4%, the S&P about 0.6%, and the Nasdaq about 2.1%. Most of the damage was in growth and chip names. During the week the Nasdaq fell below its early-June lows, with a nearly 8% drop in Alphabet on heavy AI spending a large part of the story. IBD reads the market as under pressure, with the Nasdaq now heading toward a test of its 200-day moving average, a widely watched long-term trend line.
Beginner note: notice that the Dow finished green on the same day the Nasdaq finished red. The indexes track different baskets. The Dow holds 30 established blue chips, while the Nasdaq is dominated by growth and technology. When the growth index is the weak one, it is a caution signal for momentum traders, because that is usually where market leadership lives.
On today's calendar
A quiet Monday, then a wall of earnings. The marquee names report in the middle of the week, so today is mostly a setup day. The notable early report is F5 (FFIV), a networking and security-software company, out with fiscal third-quarter results.
Wednesday: Microsoft and Meta. The first two of the four remaining Magnificent Seven. The market wants to know how much each is spending to build AI data centers, and whether that spending is starting to generate a return.
Wednesday: the Fed. The Federal Reserve releases its interest-rate decision and policy statement, with a press conference to follow. A rate increase is seen as unlikely, but the odds rose to about 36% after last week's jump in oil prices, so the exact wording will matter.
Thursday: Apple and Amazon, plus the economy. The other two Magnificent Seven report after the close. That morning also brings the first estimate of second-quarter GDP, a measure of how fast the economy grew, and the core PCE index, the inflation gauge the Fed watches most closely.
Friday: the Employment Cost Index, the Fed's preferred measure of how fast wages are rising, closes the week.
On the radar: ATI
$ATI ( ▼ 2.61% ) makes specialty metals, titanium and nickel-based alloys that go into jet engines, airframes and defense hardware. Formerly Allegheny Technologies, it has been one of the stronger aerospace-supply stocks this year. It closed Friday at $197.80, down about 1% on the day but still within roughly 4% of its 52-week high of $205.31, and IBD notes that it has just completed a flat base, one of the base patterns we have been covering on Sundays, while holding above its 50-day moving average.
Why it is worth watching: a stock sitting near its highs while the broader market is under pressure is showing relative strength, and relative strength is one of the traits that marks a potential leader. Note the full setup, though. Buying a stock as it emerges from a base, in a market IBD calls under pressure, is exactly the situation where a predefined exit point protects you. It is a live example of the base patterns from the last two Sundays meeting the risk discipline still ahead of us.
ONE FOR THE ROAD
Four of the Magnificent Seven report this week: Microsoft, Meta, Apple and Amazon. Pick the one you are most curious about, reply with its ticker, and add one sentence on what the company actually sells. Naming the business behind the ticker is a habit worth building.
Educational content only. Not financial advice. Past performance does not predict future results. Read the full financial disclosure.