The market limped out of the week, snapping the S&P 500's six-week winning streak. But the compelling shift is the rebound in growth names written off by Wall Street mavens all spring and summer.

During the session, growth was the only factor that finished in green.

Rewriting the Script

The surprising strength of growth is the story of the Magnificent Seven (MAGS), who aren’t fading into that goodnight.  Five big names reporting this week could send MAGS into all-time high territory.

Bond Yields Bounding Higher

There are many theories about why the ten-year bond yields (TNX) have erupted higher. Normally, the rate of change is a red flag, even if one believes it's connected to a string of positive economic surprises.

Wild Card

Israel finally struck back at Iran. It was limited but surgical. It was also brilliantly tactical. Taking out key radars leaves Iran blind and its nuclear sites vulnerable. The ball is back in Iran’s court.

 

Earnings Season Continues

It’s the second biggest week for earnings with important names including Alphabet (GOOG), Meta (META), Amazon (AMZN), Microsoft (MSFT), and Apple (AAPL).

While they call it “earnings season,” it's really about the overall health of publicly traded companies, from the bottom line. Revenue is more difficult to manipulate and tells a story of demand, pricing power, and strategy.

We’ve seen a few companies pay heavy prices for missing on revenue, although more have gotten away with it if they beat on earnings and management spins a good yarn during the earnings call.

Still, be very leery of names in your portfolio that miss on revenue.

Today’s Session

Markets are ready to rock and roll, as last week's consolidation seemed to potentially set up a much bigger move.

This coiled spring will have three significant influences this week.

• Earnings
• Inflation Data
• Jobs Report

We keep hearing about market jitters before the election, but investors are coming out of their foxholes.

Business looks years out, and sadly, Wall Street only looks at the current quarter unless it's trying to shape a narrative that helps its positioning.

The narrative now is that it is time to ditch the Mag Seven and mega-cap names.

Hedge funds have beaten a hasty retreat, lowering exposure from 21% of their book to 16% as they have layered on more short positions.

Market concentration has remained near the highest level in the past 100 years. It’s a significant concern for Wall Street.

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