Epicenter stocks could lead if interest rates flatten or rise
Stock futures mixed in the early pre-market session ahead of the kickoff of earnings season, as for the S&P 500, any further downside shouldn't be an issue over the extremely short term for a couple of reasons.
Gamma exposure is extremely elevated and likely to remain that way into the July expo this week; CPI a widely-watched inflation number coming this week and nobody wants to get caught offsides into that; Final point, earnings season is on the doorstep and likely to be another quarter of crazy growth, and it could end up a 'sell the news' event when all said and done but not likely to see follow-through in regards to selling ahead of it, with earnings just a week away.
Rotation front
Small caps and underbelly growth names look the most appealing here "tactically' over the short term. Mega cap techs have been king of the market but really have scorched off this latest push. There still will be intraday and tactical opportunities off any weakness in the likes of $Apple(AAPL.US$, $Amazon(AMZN.US$, $Oracle(ORCL.US$ ahead of earnings but the mindful of potential reversals when chasing green there.
Yields are due for an oversold bounce which help epicenter, cyclical and commodity plays but likely have a bit more work to do in regards to consolidation. These names will be a very interesting watch post-earnings.
Take a look at this chart above. It's the US 10-year yield and price ratio epicenter/Nasdaq 100. Since the 10-year started falling, the epicenter lagging badly.
Given the shift in interest rate versus the two sets of stock performance brief views, moving further, epicenter stocks could lead if interest rates flatten or rise. On the FAANG side, it would still work even if interest rates backup due to "catch-up" trade.
Notable bettings toward individual names (Thursday & Friday)
Notable bettings toward individual names (Thursday & Friday)
$UiPath(PATH.US$ , $Sunnova Energy International(NOVA.US$ , $Check Point Software(CHKP.US$ , $Tempur Sealy International(TPX.US$ , $United Parcel Service(UPS.US$ , $GDS Holdings(GDS.US$ , $Antero Resources(AR.US$ , $Delta Air Lines(DAL.US$ , $SPDR S&P 500 ETF(SPY.US$ , $Invesco QQQ Trust(QQQ.US$ , $Virgin Galactic(SPCE.US$
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