{"id":193730,"date":"2023-07-21T09:30:00","date_gmt":"2023-07-21T13:30:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=193730"},"modified":"2023-07-21T10:00:25","modified_gmt":"2023-07-21T14:00:25","slug":"following-rules-of-stock-market-physics","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/following-rules-of-stock-market-physics\/","title":{"rendered":"Following Rules of Stock Market Physics"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">The Nasdaq Composite declined 2.0% on Thursday with losses in&nbsp;<strong>Tesla (TSLA)<\/strong>,&nbsp;<strong>Netflix (NFLX)<\/strong>, and semiconductor stocks weighing heavily. Based on this year&#8217;s rules of stock market physics, however, what goes down must go up. Sure enough, those stocks and others are making a rebound effort that has the Nasdaq 100 futures in better shape this morning.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Currently, the S&amp;P 500 futures are up 19 points and are trading 0.4% above fair value, the Nasdaq 100 futures are up 99 points and are trading 0.7% above fair value, and the Dow Jones Industrial Average futures are up 62 points and are trading 0.2% above fair value.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There isn&#8217;t much more to it other than a Pavlovian, buy-the-dip response knowing that the news flow hasn&#8217;t possessed a catalytic pop. What will be watched closely today is whether that response holds up as the day progresses or if it is stifled by a renewed bid to take some money off the table.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Much of the news flow has been earnings related. Dow component&nbsp;<strong>American Express (AXP)<\/strong>&nbsp;is the headliner on that front. It topped the Q2 consensus EPS estimate, but its revenues were light of expectations and it logged a notable increase in its provision for credit losses that is being blamed for its weakness.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">AXP is down 4.1% in pre-market trading. That is having some impact on the Dow Jones Industrial Average futures, but in general, it isn&#8217;t having much impact on the broader market, which is keying off the rebound action in stocks like Tesla, Netflix,&nbsp;<strong>Microsoft (MSFT), Apple (AAPL)<\/strong>, and&nbsp;<strong>NVIDIA (NVDA)<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Similarly, railroad operator&nbsp;<strong>CSX Corp. (CSX)<\/strong>&nbsp;is down 3.2% after posting some lackluster Q2 numbers, but, again, the broader market is orienting itself toward the price action of its heavyweight leaders.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There isn&#8217;t any U.S. economic data of note today, so the stock market won&#8217;t be getting a push one way or the other from the economic calendar. Treasuries, in turn, might be searching for a trading catalyst.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The 2-yr note yield is down one basis point to 4.83% and the 10-yr note yield is down three basis points to 3.82%, perhaps keying a bit off an interest-rate differential trade following a&nbsp;<em>Bloomberg<\/em>&nbsp;report that indicates Bank of Japan officials don&#8217;t see an urgent need at this point to address the yield curve control policy.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That report has tamped down speculation of a shift at next week&#8217;s BOJ policy meeting, which is evident in the yen&#8217;s weakness today. Currently, the dollar is up 0.9% against the yen to 141.38 after being up as much as 1.3% earlier.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As a reminder, the Nasdaq 100 special rebalance will be effective before the open on Monday.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">&#8212;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Originally   Posted  July 21, 2023 &#8211; <a href=\"https:\/\/www.briefing.com\/page-one\">Following rules of stock market physics<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Nasdaq Composite declined 2.0% on Thursday with losses in Tesla, Netflix and semiconductor stocks weighing heavily. Based on this year&#8217;s rules of stock market physics, however, what goes down must go up.<\/p>\n","protected":false},"author":60,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[18,6,8,9,22,26,3],"tags":[14020,3598,4109],"contributors-categories":[13589],"class_list":["post-193730","post","type-post","status-publish","format-standard","category-macro","category-north-america","category-region","category-securities","category-stocks","category-text-articles","category-traders-insight","tag-market-brief","tag-market-outlook","tag-stock-market","contributors-categories-briefing-com"],"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.8) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Following Rules of Stock Market Physics | Traders&#039; Insight<\/title>\n<meta name=\"description\" content=\"The Nasdaq Composite declined 2.0% on Thursday with losses in Tesla, Netflix and semiconductor stocks weighing heavily. Based on this year&#039;s rules of...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.interactivebrokers.com\/campus\/wp-json\/wp\/v2\/posts\/193730\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Following Rules of Stock Market Physics | IBKR Campus US\" \/>\n<meta property=\"og:description\" content=\"The Nasdaq Composite declined 2.0% on Thursday with losses in Tesla, Netflix and semiconductor stocks weighing heavily. Based on this year&#039;s rules of stock market physics, however, what goes down must go up.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/following-rules-of-stock-market-physics\/\" \/>\n<meta property=\"og:site_name\" content=\"IBKR Campus US\" \/>\n<meta property=\"article:published_time\" content=\"2023-07-21T13:30:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-07-21T14:00:25+00:00\" \/>\n<meta name=\"author\" content=\"Patrick J. O\u2019Hare\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Patrick J. 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