Although the major indexes advanced on Tuesday the bulls struggled with momentum as mixed earnings results added uncertainty.  The big reports for the tech giants only added to the hesitation as MSFT surged higher and GOOGL declined sharply.  Today we have another big day of earnings with AMZN and META  after the bell with a few more economic reports to inspire the bulls or bears.  The mix of data is leaving more questions than answers and so far unable to offset the geopolitical impacts facing the market.  Plan for another day of whippy price action as traders navigate all the data the the path forward clouded in uncertainty.

While we slept Asian markets closed mixed but mostly higher after Australia reported higher-than-expected inflation numbers.  European markets trade cautiously with modest gains and losses this morning despite the 7% earnings rally from Deutsche Bank.  U.S. futures suggest a mixed open ahead of a big day of earnings and economic reports with more tech giant reports just around the corner.

Economic Calendar

Earnings Calendar

Notable reports for Wednesday include AEM, AGI, ALGN, AMP, AR, ATR, ADP, AVB, AVY, BKR, BA, BOKF, BA, BOKF, CP, CHE, CHDN, CME, CYH, ED, ESI, EQT, EQIX, ETD, EG, EVR, FLEX, FLS, FTV, GD, GL, GGG, GBX, HESS, HLT, IBM, EIX, IMAX, INVH, KRC, KLAC, LC, LAD, MAT, MOH, MCO, COOP, MSM, MSTR NAVI, NTGR, NSC, ORLY, ODFL, OTIS, OC, PPC, R,  SLM, SEIC, NOW, SUI, NOVA, TMHC, TDY, TER, TMO, TMUS, TNL, URI, UHS, VMI, VICI, VKTX, WNC, WFRD, WSBC, WFG, WU, WHR, WH.

News & Technicals’

The recent attack on Israeli civilians by Hamas, a Palestinian militant group, has triggered a wave of violence and fear in the Middle East, a region that is vital for the global economy. Economists are worried that the conflict will spread to other countries and pose a long-term threat to the energy and trade infrastructure that connects the world. Many international powers are trying to calm the situation and prevent further escalation. The Middle East hosts some of the world’s most important shipping routes, such as the Suez Canal, the Red Sea, the Persian Gulf, and the Strait of Hormuz, which carry oil, gas, and other goods. Any disruption or damage to these routes could have serious consequences for the global markets and consumers.

The escalating conflict between Israel and Hamas is adding to the economic uncertainty and anxiety in the world, according to the IMF chief. Kristalina Georgieva, the Managing Director of the IMF, said on Wednesday that the worsening violence in the Middle East was another cloud on the horizon of an already gloomy economic outlook. She made these remarks at a panel hosted by CNBC’s Dan Murphy at the Future Investment Initiative Institute conference. Georgieva was not alone in expressing her concern, as other senior business figures at the conference also felt the impact of the conflict on the global economy. The conflict, which started on Oct. 7 when Hamas launched rockets at Israeli civilians, has killed hundreds of people and displaced thousands more. It has also raised fears of a wider regional war and disrupted the supply and demand of oil and other commodities.

The U.S. is likely to increase its pressure on Iran, an OPEC member and a major oil producer, for its support of Hamas, a Palestinian militant group that has been attacking Israel. This is the view of Helima Croft, the head of global commodity strategy at RBC Capital Markets, who spoke to CNBC on Wednesday. Croft said that the Biden administration, which has been trying to revive the 2015 nuclear deal with Iran, might tighten the sanctions on Iran’s oil exports in response to its backing of Hamas. She also said that the expected ground invasion by Israel into Gaza, where Hamas is based, could determine how the West reacts to Iran. The conflict between Israel and Hamas, which started on Oct. 7, has raised concerns about the stability of the Middle East and the global oil market.

The equity markets rallied Tuesday but the bulls struggled with momentum worried about the war in the Middle East and the mix of earnings results. Bond yields paused moving higher while the U.S. Dollar strengthened slightly as gold, silver, and crypto strengthened in a flight to safety. The tech titans came in with mixed results as MSFT surged higher while GOOGL sold off sharply adding more uncertainty as to what lies ahead.  Today we have another huge round of earnings that includes META and AMZN after the bell for traders to ponder.  On the economic calendar, we have Mortgage Applications, New Home Sales, Petroleum Status, bond auctions, and another Jerome Powell speech after the market closes to keep traders guessing.  Plan for another day of whippy price action filled with uncertainty about what comes next.

Trade Wisely,

Doug