Next Day Prep: Tech Turmoil Triggers Retail Rally
A quick analysis of today’s market outlook and key trading opportunities to start your day.
Intro & Market Mood
Welcome to Next Day Prep – What We Are Watching Tomorrow! Today’s market saw a significant divergence between the tech-heavy Nasdaq, down nearly two percent, and the Dow, which reached a record high intraday before retreating. This mixed market sentiment reflects a classic rotation scenario.
Overnight Headlines
- AI Trade: Broadcom (AVGO) reported earnings beat and dividend raise but faced a sharp decline of over eleven percent due to high market expectations.
- Rotation Play: Money moved from tech giants like Nvidia and Oracle to Consumer Staples, with Walmart hitting a record high and Lululemon (LULU) surging due to a CEO transition announcement.
Economic Announcements
Upcoming data includes the Jobs report on Tuesday and CPI on Thursday, with market sensitivity to inflation indicators amidst the ongoing sector rotation.
Earnings Highlights
Notable earnings reactions include Broadcom’s sell-off despite strong financials and Lululemon’s positive momentum following the CEO news.
Top Movers
Consumer Staples like Walmart and Lululemon outperformed, while tech stocks faced selling pressure with Broadcom’s decline affecting the sector.
Quick Trade Ideas
- Long Opportunities: Consider VERA for potential breakout above $50.16 and MSOS (Cannabis ETF) on positive marijuana rescheduling news.
- Avoid Short: Exercise caution in Industrials and struggling tech names like Adobe and Oracle until clear signs of reversal.
Key Takeaway
Monitor SPY at critical support of $680.07 and Nasdaq at $612 levels for market direction. Keep an eye on VIX volatility for sentiment shifts and focus on relative strength setups like VERA and GLTO amid sector rotations.