It’s time to buckle up and get ready for the volatility that big tech news events can inspire.  Apple will reveal its new products later today, and after the bell, Netflix will be the first tech giant to report quarterly results.  With indexes so elevated, they will need to report near perfection to support current valuations.  With lowered analyst expectations, it’s certainly possible, but traders should prepare for the possibility of substantial morning gaps as the market reacts.  Market emotion is high, so plan your risk carefully.

Overnight Asian markets struggled as Japan dropped nearly 2% as China leaves lending rates unchanged.  European markets display red across the board this morning, with global markets showing weakening sentiment.  Ahead of earnings and the kick-off to big tech reports later today, U.S. futures currently point to a lower open as treasury yields rise. 

Economic Calendar

Earnings Calendar

On the Tuesday earnings calendar, we have 35 companies listed, ready to report quarterly results.  Notable reports include ABT, AN, CMA, CSX, DOW, EW, FITB, HOG, IBKR, ISRG, JNJ, KEY, LMT, MAN, NFLX, PM, PG, TRV, & XRX.

News & Technicals’

Later today, we have a couple of big tech news events that could have a market effect.  First, Apple will roll out new versions of their high-end iPads and maybe even some new tech devices.  After the bell, we will get our first tech giant earnings report when Netflix reveals its results.  Keep in mind this sets the stage for possible market gaps on Wednesday’s open, which will likely continue as we progress through the tech titan reports.  This morning the 10-year Treasury yields perked up to 1.619%, and the 30-year climbed to 2.315%, reacting to the latest earnings results that hint of rising inflation.   India reports over 200,000 daily Covid cases for the 6^th consecutive day topping over 15 million as hospitals struggle under the increasing pressure.  According to the IEA, energy-related carbon emissions will surge by nearly 5% this year as the world Covid recovery begins.  The organization is sounding a warning that this surge is unstainable for our climate. 

Futures attempted a bounce in overnight trading, but we see a bit of bearishness as we begin another day of potential market-moving earnings reports so far this morning.  The SPY and the QQQ look to be the most vulnerable, leaving behind evening star-type candle patterns in very extended market conditions.  With price and moving average supports significantly lower, it could be a painful pullback should the bears find inspiration to attack.  Thus far, earnings reports have come in glowing positive, but that could negatively affect inflation hawks watch rising treasury yields this morning.  Expect the challenging price volatility to continue and even intensify as the risk of significant morning gaps increase as the tech giants begin to report.  Stay focused and flexible as anything is possible during earnings season. 

Trade Wisely,

Doug