To The Moon

On Thursday (25 July), we saw mixed action from the stock market but we can see that there was some positive vibe underneath following a report showing U.S. gross domestic product (GDP) grew at a greater-than-expected annualized rate of 2.8% in the second quarter.

Although indications of persistent economic strength temporarily took the spotlight on Thursday, boosting stocks in intraday trading, the concerns about muted tech earnings that sent stocks tumbling in the previous session reemerged in the afternoon.

Advancers led decliners by a 2-to-1 margin at the NYSE and by a 3-to-2 margin at the Nasdaq.

The S&P 500 slipped 0.5% on Thursday, July 25, as tech stocks faltered for a second straight day even as data showed an uptick in GDP growth.

Dow Jones Industrial Average gain +0.2% and Russell 2000 gain +1.3% were either mostly or entirely positive today.

Mega Cap Stocks Show Indecisive Action

From the performance of the Vanguard Mega Cap Growth ETF (MGK), which traded up as much as 0.9% at its high and down as much as 2.1% at its low, this give us enough evidence that mega cap stocks were trading indecisively.

The equal-weighted S&P 500, however, settled with a 0.1% gain amid rebound action elsewhere.

Significant Catalyst From Earning Stocks

After we suffered from Wednesday (24 July)’s solid sell-off we began to see upside bias as investors went into the buy-the-dip mode, interest was gathering resulting in outsized moves in either direction were reserved for names with specific catalysts.

These two names are helping to power with their significant gains after earnings. IBM (IBM) rose to 191.98, up 4.3% after reporting earnings. ServiceNow (NOW) surged to 848.79, up 13.4% after reporting earnings.

Energy Lead The S&P 500 Sector Despite Investors Went Into Buy-The-Dip Mode

S&P 500 Energy sector was up +1.47%, leading the 11 sectors, ony four sectors managed to provide positive gains between +0.25% to +1.47%.

The biggest losing sectors were Communication Services down -1.86% and Information Technology losing -1.14%.

Note Yield Up Following Thursday's economic releases

Treasuries were reacting to Thursday's economic releases, which were in line with the market's soft landing expectation and also acted as support for equities. Additionally, today's $44 billion 7-yr note auction met strong demand.

The key takeaway from the GDP report is that there was no breakdown in consumer spending, which actually accelerated, increasing 2.3% following a 1.5% increase in the first quarter.

The key takeaway from the initial claims report is that there hasn't been an alarming jump in initial claims, indicating a normal slowing in the labor market rather than rapid deterioration.

The key takeaway from the durable orders report is that the weakness was driven by a large drop in nondefense aircraft and parts orders, which are volatile. Business spending in June was quite solid, evidenced by the 1.0% increase in new orders for nondefense capital goods excluding aircraft.

This caused the 10-year note yield gaining two basis points to 4.249% and the 2-year note yield also rose eight basis points to 4.447%.

Stocks To Watch

$ServiceNow(NOW)$ shares soared 13.4% to reach a record high and notch the top daily performance of any S&P 500 stock. The provider of cloud-based workflow management software exceeded analysts' estimates with its second-quarter sales and profits, with robust demand for artificial intelligence (AI) products helping to drive a 23% year-over-year increase in subscription revenue.

NOW is in a good position for BUY because the MACD is showing bullish crossover formed and KDJ is also signalling a BUY signal, with the earnings exceeded estimates and also their robust demand should continue to help gather confidence from traders and investors.

Hospital and health care service provider $Universal Health(UHS)$ topped sales and profit estimates with its second-quarter results, and its shares gained 10.2%. Despite underperformance from the company's behavioral health services, growth in acute care helped drive the strong performance and prompted UHS to boost its full-year guidance.

As shared in my previous article on UHS earnings, UHS did not disappoint and we saw a very nice gap up following its earnings report, this has given a confirmation signal that the upside movement is ongoing.

With MACD and KDJ signal for buy and bullish crossover on 24 July, this might be too high a price for entry unless you have taken a position before its earnings.

$Apple(AAPL)$ shares rose on Thursday as Baird raised its price target to $240, citing the potential boost in iPhone sales from its AI initiative, Apple Intelligence. The firm noted that a significant portion of iPhones globally would need to upgrade to take advantage of the new AI features.

Even though we saw a small increase from AAPL after price target rise to $240, from the technical, AAPL still need more conviction from market to change the downtrend presented by MACD and KDJ.

I would continue to monitor AAPL to see how it develops before deciding to load more AAPL shares.

Tesla (TSLA) experienced a significant post-earnings selloff this week, with shares dropping 12.3% on Wednesday, marking their worst single-day performance since September 2020. The electric vehicle giant's fourth consecutive quarterly earnings miss and the delay of its Robotaxi event until October contributed to a $97 billion market cap wipeout. This decline was a major factor in a broader tech selloff. Despite Tesla's dramatic drop, Nvidia (NVDA, Financial) reclaimed the number one spot on Interactive Brokers' (IBKR) updated list of the most-active symbols on its trading platform.

Juniper Networks (JNPR) shares dropped 1.3% in extended-hours trading after reporting preliminary Q2 results that missed expectations. The company earned an adjusted $0.31 per share, with revenue dropping 16.8% year-over-year to $1.19 billion. Despite the miss, Juniper saw robust orders from cloud customers and strong demand in its enterprise segment.

Microsoft-backed (MSFT) OpenAI has started testing SearchGPT, a new AI-driven search feature, with a select group of users and publishers. The initiative aims to combine AI models with web information, addressing concerns about the impact on publishers and content creators by providing clear attribution and links.

Summary

Positive vibe felt in the underneath session might be good as investors are fishing for buy-the-dip stocks, I have bought Amazon as well. But we might still see some mixed action today (26 July) as we expect PCE data.

We might want to look at some of the earning catalyst stocks and find opportunities. Next week would be more interesting with more mega cap and tech stocks reporting their quarterly earnings.

Appreciate if you could share your thoughts in the comment section whether you think we will see another mixed trading session today (26 July) to end the week?

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.