Mike Zigmont, author of the Zigmont Report, is a partner at New York-based Harvest Volatility Management, a hedge fund with over $10B AUM, offering volatility management solutions to its investor base worldwide.  Mike has been publishing his daily newsletter (Monday-Friday) privately for the firm’s investors and his personal contacts in the investment business since 2008, sending it daily shortly after the market close.

The opinions expressed below are my own and do not necessarily represent those of Harvest Volatility Management, LLC.

 

Still waiting.  Things were very quiet again today.  Capital flow was anemic at 82% and the equity market didn’t move much.  The bulls won the day but given the lack of major news, it looks like a response to Friday’s drop more than anything else.

Earnings season continues this week and things are about to get busy.  153 stocks in the S&P 500 report this week.  The season so far has been a non-event.  That is curious.  If this earnings season is going to matter at all, this is the week for it to happen.  If a narrative does take hold, I don’t think it will generate that much of a move.  So many firms have already reported that it is unlikely the remaining ones deliver lots of major surprises.  It’s possible of course but I think it’s a remote possibility.

Maybe we get a skewing of results though.  If the skew is positive, maybe we get a gentle rally…or vice versa.  I think it’s more likely that we just drift along as we wait for the FOMC decision on July 31st but a last-ditch earnings season narrative and push is still worth considering.

Maybe there’s a percent up or down still achievable if earnings season catches a narrative?

That ultimately won’t matter much when the FOMC decision comes.  Right now there’s a 19% probability of a 50 bip cut and a 81% probability of a 25 bip cut.

Whatever the Fed does, and then signals, will override whatever investors price in regarding earnings season right now.  Maybe that’s why markets are so thin and unremarkable.  Investors aren’t learning anything between now and the 31st that matters much when measured against Fed policy.

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