Stock markets are rallying following a mixed bag of earnings from tech giants. Both Meta and Tesla saw gains in after-hours trading after topping expectations. Microsoft shares are under pressure (down approx. 7% in pre-market) despite a double-beat, as investors worry about slowing cloud growth. All eyes are on Apple, as they are scheduled to report their results after the closing bell today. Yesterday, the Fed kept interest rates steady at 3.5% – 3.75%. Chair Jerome Powell signaled a “normalcy” that calmed some nerves but offered no immediate hope for further rate cuts, keeping treasury yields stable around 4.25%.
Commodities are still rallying and the dollar is at multi-year lows, should we be worried? There is no doubt that if oil continues to rally inflation and bond yields will go up and this is negative for stocks. Oil appears to be in the early stages of a large rally, it is catching up with the metals like copper and silver. The dollar decline will encourage foreign investors to sell US assets, this can not be good for the stock market.