The stock market has come to a standstill as earnings season gets going. So far, many earnings moves have been muted, which has caused a lack of movement in the markets over the last couple weeks.
If earnings aren’t the catalyst, traders will be focusing on the Fed’s next move. Additionally, President Biden will unveil some details on his 1.8T family aid plan. While the spending part of this is known, the taxing part is what makes big investors nervous.
The FOMC is due out today and the Fed is fully expected to hold on rates. The focus for traders will be any commentary on tapering or inflation. The more willing the Fed is to keep current policy in place, the more bullish it is for the market. However, if the Fed hints at some tapering due to vaccination progress or mention they are starting to worry about inflation, then we could see some downside in stocks.
Taxes will be a focus for traders as the details of Bidens plan become available. Under the proposed plan, the top capital gains rate will go to 39.6%. While that number would be hard to accept for moderates, taxes on capital gains will eventually be going higher. Once we get some clarity on this, market participants will start pricing in future taxes. So far, markets are not concerned.
S&P Futures Trading Levels
The S&P futures currently sits at 4882, just under the overnight highs.
Support levels for the day will be 4167 and 4154.
Upside resistance is 4193 and 4205.
The current S&P trading environment is breaking out higher, but the last two weeks have been sideways.
Three Stocks to Watch
GOOGL- Alphabet, better known as Google, reported a monster EPS beat after hours last night. The company saw a 68% surprise to the upside, which caused the stock to trade 5% higher after the bell.
Some positive highlights on the quarter include YouTube growth, Google Cloud growth, and a $50B stock buyback.
The stock has been the strongest of the FANG names and was up almost 30% on the year before EPS.
A lot of upgrades coming out this morning after this big print, including at $2,875 target from JPMorgan.
MSFT- Microsoft put up a nice quarter, but traded lower after hours. The stock has run higher just like Google, but the numbers didn’t blow away Wall Street so some profit taking came in last night to drop MSFT 3%.
Some highlights include:
Intelligent Cloud up 23% y/y
Azure revenue was up 50%
LinkedIn revenues up 25% y/y
Analysts are reiterating their buy ratings, with some lifting price targets.
V– Visa posted an almost 10% beat on EPS, which helped the stock up about 2% last night. Payments were up 11% y/y, transactions up 8% y/y, and data processing revenue was up 11%. One negative was international transactions, which were down 19%.
The stock is looking to trade into all-time highs off the open.
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After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could be a still greater bonanza for investors. Even before the latest wave of legalization, Zacks Investment Research has recommended pot stocks that have shot up as high as +285.9%
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Image: Bigstock
Traders Looking for Markets to Wake up
The stock market has come to a standstill as earnings season gets going. So far, many earnings moves have been muted, which has caused a lack of movement in the markets over the last couple weeks.
If earnings aren’t the catalyst, traders will be focusing on the Fed’s next move. Additionally, President Biden will unveil some details on his 1.8T family aid plan. While the spending part of this is known, the taxing part is what makes big investors nervous.
The FOMC is due out today and the Fed is fully expected to hold on rates. The focus for traders will be any commentary on tapering or inflation. The more willing the Fed is to keep current policy in place, the more bullish it is for the market. However, if the Fed hints at some tapering due to vaccination progress or mention they are starting to worry about inflation, then we could see some downside in stocks.
Taxes will be a focus for traders as the details of Bidens plan become available. Under the proposed plan, the top capital gains rate will go to 39.6%. While that number would be hard to accept for moderates, taxes on capital gains will eventually be going higher. Once we get some clarity on this, market participants will start pricing in future taxes. So far, markets are not concerned.
S&P Futures Trading Levels
The S&P futures currently sits at 4882, just under the overnight highs.
Support levels for the day will be 4167 and 4154.
Upside resistance is 4193 and 4205.
The current S&P trading environment is breaking out higher, but the last two weeks have been sideways.
Three Stocks to Watch
GOOGL- Alphabet, better known as Google, reported a monster EPS beat after hours last night. The company saw a 68% surprise to the upside, which caused the stock to trade 5% higher after the bell.
Some positive highlights on the quarter include YouTube growth, Google Cloud growth, and a $50B stock buyback.
The stock has been the strongest of the FANG names and was up almost 30% on the year before EPS.
A lot of upgrades coming out this morning after this big print, including at $2,875 target from JPMorgan.
MSFT- Microsoft put up a nice quarter, but traded lower after hours. The stock has run higher just like Google, but the numbers didn’t blow away Wall Street so some profit taking came in last night to drop MSFT 3%.
Some highlights include:
Intelligent Cloud up 23% y/y
Azure revenue was up 50%
LinkedIn revenues up 25% y/y
Analysts are reiterating their buy ratings, with some lifting price targets.
V– Visa posted an almost 10% beat on EPS, which helped the stock up about 2% last night. Payments were up 11% y/y, transactions up 8% y/y, and data processing revenue was up 11%. One negative was international transactions, which were down 19%.
The stock is looking to trade into all-time highs off the open.
Time to Invest in Legal Marijuana
If you’re looking for big gains, there couldn’t be a better time to get in on a young industry primed to skyrocket from $17.7 billion back in 2019 to an expected $73.6 billion by 2027.
After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could be a still greater bonanza for investors. Even before the latest wave of legalization, Zacks Investment Research has recommended pot stocks that have shot up as high as +285.9%
You’re invited to check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.
Today, Download Marijuana Moneymakers FREE >>