Let's get to the big story breakdown.
While US stocks moved higher to start a busy week for earnings, the major stock averages climbing back to our record highs from earlier this month, with the Dow clearing new intraday highs above the 477,100 level.
Meanwhile, volatility was back on Wall Street, but we are looking at the VIX hovering right around 18 this morning.
Big tech and chipmakers drove a massive rally that helped wipe out April losses and push the market.
Two dozens of new record highs, and that uncertainty has others looking for ways to protect their portfolios in case the AI boom loses team.
Well, joining me this morning is Matt Cheslock, equity trader at Virtue Financial.
Good morning, Matt.
Thank you so much for joining me.
Good morning, Ray.
How are you?
Good.
Well, out of the nearly 80 companies of the S&P 500 that have reported, we have been getting in higher than expected beats.
So what do you make of earnings season so far?
Well, it's funny, we're Starting to get off the tariff talk, you know, we saw a little bit of that yesterday, you know, from from companies like GM and 3M.
You know, we're starting to talk about we're looking at the economy.
We're not just taking tariffs and using that as an excuse.
You know, GM had a huge move that took the Dow higher, that took the S&P higher, you know, we saw 3M, obviously, you know, so these names are outside the purview of the normal investor now.
We seem to be not focused on AI for the.
Second week now.
Last week it was rare earths.
This week it's a bit of a precious metal sell off, but when that happens they've got to rotate into something else.
So we're starting to see some of these meme trades kick up again.
You've mentioned Beyond Meat a couple of times.
So these are what investors are focused on and without any government supporting data, which is actually pretty nice and refreshing, that we're actually trading companies on what they're worth, you know, that's what we're seeing these massive moves on.
Yeah, I think contact and context and perspective is key because even though we're talking about this pull back in gold, it is still up 55% year to date, right?
And we're still holding above that 4000 level, so it's outperforming the major stock averages, crypto as well.
But you talked about the guidance that we're hearing from these companies.
We saw 3M Coca-Cola push the Dow to new record highs yesterday.
So what does all of this mean in terms of the economy, especially ahead of CPI on Friday?
Well, first off, we're going to overanalyze CPI, right?
Some people are the skeptics are going to say it's not all baked in.
How did we come up with this number?
And if the number comes out OK, you know, the pundits will say that this is a great number and this is going to take us to the next level.
So let's strip out CPI because it's going to be overanalyzed both ways.
But if we are looking at what these companies are saying, you know, look at even Netflix while Down today, it's still coming in at 16 17% revenue growth for 2026.
That's pretty impressive after the run they've had.
So while it may not have met expectations this quarter, they're still forecasting good things.
The same thing with, you know, 3M talking about weaker consumer demand, but they still took the stock higher, right?
What does that mean?
That means the economy seems to be OK and on good footing.
Yeah, and after the bell we'll be hearing from Big Blue as well as Tesla.
So what are your expectations when it comes to sector breakdown?
What are you actually seeing?
Well, it's so great to hear some of these old names like Big Blue and 3M and GM, you know, companies that aren't meme related or AI related right now.
But you know, certainly these are companies that may see some.
Some rotation of money at the end of the year as we approach end of the year reallocations of money and portfolio adjustments.
It won't just be AI on your portfolio anymore, so you know they're going to be the benefit of that.
And if they have good earnings that will further drive some of that mean trade, some of that money that is looking for a new home that may have not invested in Big Blue in a long time, they might start getting into that and not just because of the name, but there's also.
End yields with some of these older companies.
Yeah, and it's hard to believe, but we are fast approaching month end.
We have the Fed meeting coming up and also the APEC summit.
So we'll see what comes out in terms of tariffs from that gathering.
But as we head into the rest of the 4th quarter, as you mentioned, usually we tend to get rallies year end.
What price targets do you have for not just the S&P 500, but other sectors as well?
You know, you mentioned gold a little bit, you know, so the The number was $250.
It was down yesterday.
It's down another $60.
These numbers are daunting, but when it's still up above $4000 you know that trend line hasn't been broken.
This was just maybe just a sell off, a bit of profit taking from some of the short term players, some of the derivative options type names, so that trend is not broken.
The same thing with the S&P, we break out above 6800.
There may be another leg.
So you know, certainly you've got to keep it.
You've got to keep fluid with what's going on because it does turn pretty quickly.
So those are some of the numbers that I would watch in gold and maybe in the S&P.
OK, Matt, always great having you on the show.
Thank you so much for joining me and thank you so much for putting your perspective on what we're seeing.
All righty, have a good day.
You too.
