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One earnings report can drastically change the price trajectory of a stock and its industry. Take Snapchat for example. SNAP had a big earnings surprise (over 100% above estimates) and reported a notable acceleration in revenue. It gapped to new all-time highs and had the strongest week in its history, gaining 50% on record volume. Snapchat also projected a significant improvement in digital advertising conditions which boosted the stocks of FB, TWTR, PINS, GOOGL, SPOT.
Small caps outperforming and setting up for a potential breakout with a potential pivot at 164.25. It is not only about the new stimulus. We saw a big spike in interest rates which pushed banks and basic material stocks higher while it pressured homebuilders.
The market is acting as if the new $2 Trillion stimulus (it hasn’t been approved yet) will only help the worst-hit by COVID sectors. The amount of money is significant. It’ll eventually trickle down to the balance sheets of the most profitable companies in Big Tech. This is why I think the dips in AMZN, AAPL, FB, GOOGL, MSFT will continue to get bought. QQQ is setting up for a potential bounce just before the biggest earnings week this season.
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