Repricing the Growth Outlook

See the market for what it is and not what you want it to be. Here are the market observations for today.

1. Is the market now waking up to the Delta variant threat and its impact on economic growth?
2. The market is repricing the growth outlook – by selling commodity names like Oil, and metals. Sometimes one is better off exiting such names before it gets too late.
3. When it comes to headline index, buy the dips still work. The NASDAQ and S&P500 staged a smart comeback yesterday and have continued with their upmove today too. Both the indices closed +0.1% yesterday. 
4. No such recovery when it comes to the small-cap index. The Russell 2000 IWM ETF declined 1.2%. Will IWM find support at 210?
5. S&P 500 ETF SPY has just been up, up, and up. Just look at the chart
6. BUT it stinks below the surface. I have never seen this level of divergence between major indices and the broader market. There are hardly any trading opportunities but the headline index continues to move ahead.
7. No matter how bad the market is, there will be few stocks that will do well. Will Lending Club be that stock?
8. Unity Software seems to have found support at $114.5. The stock should do well as long as it respects that level.
9. When a stock makes a large candle breakout on strong earnings, then one should buy and wait for follow-through gains. Will Macy’s do that?
10. The consumption story is for real. Foot Locker, a shoe retailer, reported an adjusted profit of $2.21 a share, beating forecasts for $1 a share, on sales of $2.28 billion. 
11. When a stock makes a new all-time high, then usually it does well. Will AMD stock surprise in 2H CY2021?
12. China has passed one of the toughest Consumer data protection act. Most of the Chinese internet stocks are extremely sold and seem to be bouncing back today. All of them are toxic and avoid now.
13. S&P 500 is up 0.58% whereas NASDAQ is up 0.9% but Emerging market EEM is still in the red. 
14. Microsoft stock is now above $300. The company plans to increase the price of Office 365.
15. Marathon Digital Holdings, a company that mines Bitcoin is up 10% today on news that Blackrock has taken a 7% stake in the company. Most of the Bitcoin mining stocks are on fire.
16. One Canadian Tech company is planning to enter the Bitcoin mining space. The stock is well-positioned to rally if the broader market permits it to do so. The stock is ANY
17. The price action is horrible and traders who focused on protecting capital have done well. It is not just the correction but how long this phase has lasted is also playing a major role.
18. In a defensive market, Utilities do well. No wonder XLU Utilities ETF with a dividend yield of 3.1% has broken out to a new high.
19. When a stock starts falling, it can quickly descend and result in a huge loss. SPCE stock has lost 50% in just 10 days.
20. The market will surprise you. No matter how carefully you study, or how adroitly your plan. Embrace surprise, be agile and be humble.

I will make more updates in the comments section for today. So keep looking

Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purposes. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers