Friday's Market Minute: A Bifurcated Week In Stocks

A week of big-name quarterly earnings releases and an unwelcome surprise in weekly jobless claims numbers on Thursday has contributed to a stark divide among the four major indices over the past week: the RUT and SPX are in the green, and the $DJI and NDX are in the red.

The market has kept an eye on the rotation out of the tech-heavy Nasdaq and into the small-cap Russell that has taken over as the leader of the major stock indices, at least for the short-term. Yesterday, declines in tech leaders, including Apple and Microsoft, helped to push the major averages lower, as did Intel Corporation INTC earnings. Despite beating EPS and revenue expectations and announcing strong demand in its cloud-delivered services, shares of INTC fell. Microsoft Corporation MSFT saw a similar fate when it reported earnings Wednesday. Both companies, and many other names in the NDX, have primarily made up losses from earlier in the year. MSFT is just off a new all-time high of $214.

And then there’s Tesla Inc TSLA. TSLA reported what was likely its best quarter ever earlier in the week, and the stock shot higher in response only to give back those gains over the following trading session. Perhaps the market response to these earnings beats can be explained by profit-taking: traders taking what they can after incredible moves higher. And, if so, the current bifurcation in the major averages, or at least the RUT in the lead, may not be long-term.

Photo by Austin Distel on Unsplash