With the upcoming earnings reports from some of the biggest names in the market, this week could be a turning point — or a dud, depending on how these releases play out.
We’re looking at Apple (AAPL), Microsoft (MSFT), Google parent Alphabet (GOOG; GOOGL), Amazon (AMZN), and Meta (META) all reporting within the week, which essentially means nearly all of the big tech names — the “Magnificent Seven” — are set to reveal their cards.
Collectively, these companies carry the weight to move the market. But with the upcoming election, we might not see the dramatic shifts that these earnings could generally create.
For the most part, big earnings tend to shake things up, especially when a company has an unexpected beat or miss. But despite their potential, these reports may not break us out of the current range.
Take Tesla (TSLA) as an example. It posted a huge gap up last week and saw continued buying Friday, yet it wasn’t enough to move the broader market. So, even if we see surprises, it’s possible that any positive movement will be held back as investors eye the election results just a week and a half out.
Institutions and large fund managers are not likely to pour serious capital into the market right now. Why risk a big move when they can wait for the dust to settle post-election?
Instead, most are likely watching from the sidelines, waiting to see who takes office before making any significant asset reallocations.
What we’re more likely to see is this trend of range-bound trading — or as I’ve mentioned, a bit of a “box.” I’ve set this box roughly between the $570 and $590 levels of the S&P 500 ETF (SPY).
For now, we’re looking at these as likely maximum levels, with no expectation of a breakout before the elections.
So, can earnings next week tip the scales?
Only if we see a consistent direction from all these big names. If all the tech giants surprise to the upside or downside, it could potentially move the needle, but the odds are slim. The real “power player” in this scenario remains the election — which holds the kind of uncertainty that keeps big money on the sidelines.
To sum it up: Watch the earnings, but don’t expect fireworks.
Unless we see extreme surprises across the board, it’s more likely that we’ll stay within this tight trading range until the election is behind us. Then, we may finally see some of these market forces — earnings, rates and the dollar — make their impact felt.
Until then, it’s a waiting game.
Kane Shieh
Kane Shieh Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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