Reply To: Traders Market Weekly: Valuation Matters in Earnings Season


The mega caps were an important downside driver with the Vanguard Mega Cap Growth ETF (MGK) closing down 1.9% versus a 1.2% loss in the S&P 500.

The Invesco S&P 500 Equal Weight ETF (RSP), for its part, closed down 0.9%.

Meta Platforms (META 162.88, -7.99, -4.7%) was one of the biggest laggards after being downgraded to Underperform from Hold at Needham.
Tesla (TSLA 703.03, -49.26, -6.6%) was the single worst performing mega cap after Elon Musk walked away from his acquisition deal with Twitter (TWTR 32.64, -4.16, -11.3%).

Buyers showed reluctance this session with declining issues leading advancing issues by a 5-to-2 margin at the NYSE and a roughly 3-to-1 margin at the Nasdaq.

Nine of the 11 S&P 500 sectors closed in negative territory. The holdouts in the green were real estate (+0.1%) and utilities (+0.6%). Countercyclical sectors, consumer staples (-0.2%) and health care (-0.2%), also closed ahead of the S&P 500, though in negative territory.

Influential groups like technology (-1.3%), consumer discretionary (-2.3%), and communication services (-2.3%) dotted the bottom of today’s leaderboard. These sectors contain many multinational companies, whose foreign earnings are expected to see pressure from the recent dollar strength, which has lifted the U.S. Dollar Index to a level not seen since late 2002. The Index has gained 6.1% since the end of May.

Apple (AAPL 144.87, -2.17, -1.5%), Alphabet (GOOG 2330.45, -72.92, -3.0%), and Microsoft (MSFT 264.51, -3.15, -1.2%) lost between 1.2% and 3.0%.