Key insights
- US equities rallied, led by small caps, indicating broadening market participation beyond mega-cap tech. Strong earnings from AAPL after hours, coupled with positive results from CAT, LLY and QCOM during the day, fueled the rally. The VIX collapse suggests reduced market fear. This breadth and positive earnings momentum are bullish signals for continued upside in the near term.
four mega-caps reported wednesday night. two got punished hard (MSFT -5% on $190B capex guide, META -9% on spending hike). two crushed it (GOOG cloud growth, AMZN massive EPS beat). then thursday CAT +10%, LLY +7%, QCOM +16% picked up the slack. SPX closed 7,209.
the part that actually matters: russell 2000 led the day at +2.21%. small caps outperforming mega-caps at an ATH is exactly the breadth signal you want to see. VIX collapsed 10%.
after hours AAPL beat across the board. rev +17%, gross margin 49.3% vs 48.4% expected, $100B new buyback. +3% AH.
the rally found legs outside of big tech. industrials, pharma, chips, small caps all contributing. that’s healthier than anything we’ve seen in months.
Anyone disagreees and thinks we have a mean inversion after this insane run up instead?