Situation Awareness
Situation Awareness: Cautious. The market is navigating geopolitical tensions alongside a busy earnings week. Oil price volatility could trigger risk-off flows. Trade mode: neutral and watchful. Today’s direction hinges on geopolitical developments in the Middle East, earnings releases, and economic data, specifically the April ISM Manufacturing Index and New Home Sales. Uncertainty from the U.S.-Iran ceasefire situation is creating market jitters. Regime context — 63.37% of stocks trade above their 40-day SMA, and the 4% Bull/Bear gauge shows 0 bulls vs. 0 bears. The 5-day trend (data unavailable).
SIP: RYTM BRBR IDXX
- What’s working: Continuation breakouts.
- Leading sectors: Energy (1.83), Financials (1.54), Technology (2.09). The data does not show trending themes.
- Key event: March Trade Balance released at -$60.3 billion, matching expectations.
- Market read: Yesterday, the market showed a pullback from record highs due to escalating U.S.-Iran tensions. Maintaining a watchful stance is warranted.
- DEP watchlist: AXTI MU TEAM GTLB ASAN
- SIPS: COKE NBR FFIV
Today’s Market Narrative
Equity futures are pointing to a higher open this morning, with S&P 500 futures above fair value by 37 points and Nasdaq futures above by 214 points. This follows a down day yesterday, driven by renewed U.S.-Iran hostilities that sent oil prices higher. The market seems to be reacting positively to the fact that there have been no further escalations reported overnight.
After yesterday’s concerns over geopolitical risk, focus appears to shifting back to earnings. Approximately 120 S&P 500 companies are slated to report this week, offering a substantial flow of corporate-specific drivers. First-quarter blended growth is currently sitting at 27.5%, and markets are attuned to upside earnings surprises.
Sector performance will likely be determined by earnings results as well as oil price fluctuation. On Monday, Energy was the only S&P 500 sector to finish with a gain. This morning, the energy sector may face headwinds as crude oil is currently down $2.52 (-2.4%) to $103.90 per barrel.
The market’s narrative will likely depend on how it balances geopolitical worries with the strong earnings growth observed so far. The S&P 500 and Nasdaq have scored gains in five consecutive weeks. The push and pull between these factors will drive intraday sentiment.
Macro & Policy
U.S. Treasuries are on track for a modestly higher open after a daylong retreat on Monday. The 10-yr note yield is down 1 bp to 4.44%. The market is digesting the Reserve Bank of Australia’s expected 25 bps rate hike to 4.35%, accompanied by hints of a possible pause in tightening.
In Europe, ECB policymaker Nagel emphasized the ECB’s readiness to act at any time. The U.S. Dollar Index is up 0.1% at 98.50. Emerging market currencies face pressure, with the Indian rupee and Indonesian rupiah hitting record lows against the dollar.
While earnings garner significant attention, inflation and interest rate concerns continue to loom in the background. According to FactSet, valuations are considered lofty at 21.1x forward twelve-month earnings, a 12% premium to the 10-year average. The overnight treasury market summary showed the 10-yr yield rising 2/32 to 4.438%.
Economic Calendar Today
- 8:30 ET: March Trade Balance — Actual: -$60.3 billion | Prior: -$57.8 billion (revised) — Reflects import/export balance, impacts GDP.
- April ISM Manufacturing Index (Briefing.com consensus: 53.9%)
- New Home Sales for March (Briefing.com consensus: 654K)
- Earnings reporting today (pre/post market): Too many tickers to list, focus on those with unusual volume/price action and recognizable setups.
- No major Fed speakers are scheduled, reducing the potential for hawkish commentary.
Earnings & Corporate News
Marathon Petroleum (MPC) beat EPS expectations by $0.91 and beat revenue expectations. The stock’s reaction today will confirm whether these results can sustain a move higher. Pfizer (PFE) also beat EPS expectations by $0.03, beat revenue expectations, and reaffirmed its FY26 EPS and revenue estimates. Palantir Technologies (PLTR) beat EPS expectations by $0.05, beat revenue expectations, and guided Q2 and FY26 revenues above consensus. PLTR finished the day up 1.36% to $146.03.
In M&A news, GameStop (GME) made a $56 billion offer to acquire eBay (EBAY) at $125 per share in cash and stock. The market appears skeptical of the deal, as eBay shares are trading well below the offer price. Tyson Foods (TSN) beat EPS estimates and raised operating income guidance, but beef segment weakness remains an overhang.
Apple (AAPL) is considering using Intel (INTC) and Samsung (SSNLF) to construct main device chips in the U.S., per Bloomberg.
WaveFinder Signal Summary
The scan environment presents limited signals. The lack of Bull/Bear 4% readings is concerning, reflecting widespread indecision. 57% of stocks above SMA 20 vs 56% yesterday indicates a slight increase in short-term breadth. The 40 SMA line dipped from 64.01% to 63.37%.
Top setups worth watching include MU from the D9M scan, and COKE from the continuation scan. Given the tepid signal counts, selective trading is recommended.
Today’s Watchlist
- MU — Delayed 9M setup after earnings beat and 6.3% pop yesterday; potential for further upside.
- COKE — 2LYNCH continuation breakout; showing strength in defensives and potential for momentum.
- KLXE — 2LYNCH in energy sector, riding the oil price volatility.
- TSN — Tyson Foods, earnings beat but beef weakness needs monitoring to see if it’ll break to the upside.
- AAPL — Chip supply chain rerouting news, considering INTC/Samsung for device chips.
- ENLT — Better than expected Q1 results in the energy sector
Action Codes of the Day
CRT Controlled Risk Taking — Given the mixed signals, uncertainties, and the fact that the market is overextended on a short term-basis and due for a pullback, it’s key to only take carefully considered risks within a well-defined system.
BTFD Buy The Dip — The market is anticipating a pullback, meaning that participants who missed the rally are hoping for it. Buying the dip on a macro scale is advisable.