Morning Call Sheet: Tech earnings and Fed outlook keep markets on edge
Speakers
Dan Ives
— Managing Director, Wedbush Securities
Amy Wu Silverman
— Head of Derivatives Strategy, RBC Capital Markets
Jessica Inskip
— Director of Investor Research, StockBrokers.com
Summary
Panelists Dan Ives, Jessica Inskip, and Amy Wu Silverman discuss the week's market drivers: major tech earnings, AI capex, Fed policy, and geopolitical risks. Ives is bullish on tech and semiconductors due to hyperscaler spending; Silverman flags cheap options premiums on mega-cap tech earnings; Inskip sees liquidity headwinds capping upside. The Fed decision and midterm election narratives round out the risk watchlist.
- Major tech earnings and AI capex are the dominant market forces this week.
- Dan Ives sees strong tech demand and expects earnings to validate bullishness, particularly benefiting semiconductor stocks from combined cloud AI spending.
- Amy Wu Silverman observes that implied volatility on mega-cap tech earnings is cheap relative to historical moves, with sanguine put skews presenting a volatility setup.
- Jessica Inskip notes that record S&P 500 earnings are being overshadowed by geopolitical risk and liquidity-driven price action, keeping tech gains in check.
- Fed rate decision and PCE inflation data are in focus, though a rate hike is considered unlikely by the panel.
- Geopolitical tensions in the Middle East temporarily pushed oil lower and stocks higher pre-market but remain a headwind.
- Midterm elections could introduce an anti-AI policy risk that becomes a market story if sentiment shifts.
Ideas
Strong demand and earnings drive tech higher
Tech stocks can lead the market higher because geopolitical oil risks don't change the strong demand trends across technology, and earnings act as key validation moments that confirm the underlying growth story.
Tech earnings options look too cheap
Implied moves for the four mega-cap tech stocks reporting this week are cheap relative to historical realized earnings moves, and sanguine put skews suggest options are underpricing the potential for large idiosyncratic moves driven by new capex guidance, creating a setup worth monitoring for volatility opportunities.
