The debt downgrade to AA+ provided just enough encouragement to the bears to relieve some of the short-term overbought conditions in the indexes.  Although it was the worst day for stocks in a while the bullish trends took no damage and prices continue to be stretched well above key moving averages. Today will be busy with economic reports and a slew of earnings events capped off by the highly anticipated reports from AAPL and AMZN after the bell. Plan for considerable price volatility and don’t be surprised to see a morning gap on Friday due to the big tech reports and market reaction.

While we slept Asian market traded mostly lower with only the Shanghai index squeaking out a 0.58% gain.  European markets trade lower across the board this morning waiting on a Bank of England rate decision.  U.S. futures point to bearish open ahead of a huge day of earnings and economic data making anything possible by the time the market opens.  Plan your risk carefully!

Economic Calendar

Earnings Calendar

Notable reports for Thursday include AAPL, AMZN, ADT, AL, APD, ABNB, AMGN, BUD, TEAM, BHC, BDX, SQ, BE, BKNG, BIP, GOOS, CARS, LNG, CQP COHU, COIN, COP, CEG, CTVA, CUBE, CMI, DVA, DEN, DIN, DKNG, DBX, LOCO, EOG, EXPE, EXR, FND, FTNT, GIL, GILD, GDDY, GPRO, HAS, HGV, HII, H, ICE, IDCC, ITT, K, KTOS, LAMR, MTZ, MMP, MLCO, MCHP, MRNA, MNST, OPK, PZZA, PH, DOC, PBI, PLNT, PTLO, QLYS, PWR, RKT, RYAN, SHAK, SO, SWN, SYK, SYNA, TPX, TRMB, MODG, VMC, WBD, W, WRK, WW, & YELP.

News & Technicals’

JPMorgan Chase CEO Jamie Dimon dismissed the significance of the Fitch Ratings downgrade of the U.S. long-term credit rating in a CNBC interview on Wednesday. He argued that the market, not rating agencies, sets the interest rates for borrowing, so the downgrade “doesn’t matter that much”. He also expressed his frustration that some countries that rely on the U.S. for security and stability have higher credit ratings than the U.S., calling it “ridiculous”.

AMD, the U.S.-based chipmaker, sees India as a key market for its growth and innovation, according to its CTO Mark Papermaster. In an exclusive interview with CNBC on Thursday, Papermaster revealed that AMD plans to invest $400 million in India to expand its design capabilities and workforce. He said that the firm will build its largest design center in Bangalore and hire about 3,000 engineers in India. He added that the India design team is involved in almost every product that AMD develops.

Qualcomm, the leading maker of smartphone chips, posted better-than-expected earnings for the third quarter on Wednesday, but its revenue and outlook for the fourth quarter disappointed investors. The company’s revenue fell 9% year-over-year to $8.24 billion, missing analysts estimates of $8.28 billion. Qualcomm blamed the weak revenue on the slowdown in the smartphone industry, which affected its handset chip sales, which dropped 25% year-over-year to $5.26 billion.

On Wednesday, markets fell due to the short-term overbought condition with the encouragement debt downgrade. Indexes had their worst day in a while, partly because of the latest report on the labor market (ADP payroll report) that showed more job growth than expected for the month and the rising bond yields. Today investors have a huge number of earnings events to find inspiration including the highly anticipated reports from AAPL and AMZN after the bell.  We also have a busy economic calendar with Jobless Claims, Productivity & Costs, PMI Composite, Factory Orders, ISM Services, and Natural Gas numbers to keep the traders guessing as to what comes next.  Expect considerable volatility as the market reacts to all the data and watch for a Friday morning gap after the big tech reports.

Trade Wisely,

Doug