Next Day Prep: Stagflation Warning Sparks Market Reversal
A quick analysis of today’s market outlook and key trading opportunities to start your day.
Intro & Market Mood
Welcome to Next Day Prep! Today, the market took a breather, giving back some gains from yesterday. The main driver behind the reversal was the July ISM Services PMI coming in at just 50.1, signaling potential stagflation and spooking investors.
Overnight Headlines
Despite the overall market pullback, there were interesting divergences such as small-caps gaining and strength in materials and energy sectors. Tech sector faced headwinds with President Trump’s tariff plans, but standout earnings stories included Lemonade (ticker: LMND) surging almost 30%.
Economic Announcements
Key economic events for tomorrow include the weekly mortgage applications, crude oil inventories, and the Treasury’s 10-year note auction, following today’s weak 3-year auction. Be prepared for market reactions to these announcements.
Earnings Highlights
- Lemonade (LMND) reported strong metrics leading to a massive surge.
- Palantir (PLTR) and Axon (AXON) beat earnings and raised guidance despite sector weaknesses.
Top Movers
- Small-caps and materials/energy sectors showed strength.
- Lemonade (LMND) surged nearly 30%.
Quick Trade Ideas
Axon (AXON) shows strong post-earnings momentum, watch for support at $860 and potential resistance at $875. Keep an eye on Ascendis Pharma (ticker: ASND) for a potential breakout above $187 with clear entry and target levels.
Key Takeaway
Focus on stock-picking and managing risks in this selective market environment. Be alert to shifts in leadership and look for individual stocks with strong fundamentals that can defy sector trends.