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“My buddies wanted to be firemen, farmers or policemen, something like that. Not me, I just wanted to steal people’s money!” – John Dillinger
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
There’s a negative bias in equity futures this morning as investors digest what has been a monster run, especially in some of the more speculative areas of the market. You can’t fault investors for taking a step back to catch their breath as earnings season picks up and we approach the August 1st tariff deadlines. Treasury Secretary Scott Bessent stated in an interview this morning that August 1st is a firm deadline, after which tariff rates will revert to the April levels for any country where a deal has not been reached. Once again, the Treasury Secretary is promising lots of deals, but so far, there has been little substance.
European stocks are also weak again this morning, with the STOXX 600 down 0.6% with Germany leading the way lower with a decline of 1%. In Asia, equities had a more mixed showing with Japan down fractionally (after being closed yesterday) while China finished about 0.5% higher.
We’re in the second full week of earnings season, but the first of the big guns will kick things off tomorrow when Alphabet (GOOGL) and Tesla (TSLA) report after the close. In TSLA’s case, the stock is down nearly 20% on the year and closed yesterday just barely above its 50-day moving average, so expectations for the stock are pretty low. GOOGL is a bit of a different story. Of the now nine stocks with trillion-dollar market caps (a trillion isn’t what it used to be!), GOOGL is the only one trading at ‘extreme’ overbought (2+ standard deviations above its 50-DMA) levels, so on a short-term basis, expectations for the stock are on the high side. Longer-term, however, GOOGL has been an underperformer this year, with just a fractional gain, making it the third-worst performer of the “Noble Nine”.
Looking specifically at GOOGL, even with the stock trading at extreme overbought levels, it remains right in the middle of the range it has occupied for the last year, with a low end just below $150 and a high end at just above $200. While GOOGL was the first mega-cap to brand itself as an AI-first company, the stock has been a battleground between those who say it missed the boat on AI and those who say it’s just taking its time.
Besides closing at extreme overbought levels yesterday, GOOGL also finished the day higher for the ninth day in a row. That’s just one day shy of the longest streak in the stock’s history since its IPO in 2004 and the longest winning streak in more than six years.
The chart below shows the long-term performance of GOOGL with each red dot indicating a 9-day winning streak. While none of these streaks occurred at or near a long-term peak in the stock (there haven’t been many), many occurred near a short-term peak.
