Throughout the first half of the week equity markets had largely shrugged off the move in oil and increasing geopolitical risks even as Treasury yields approached their YTD highs. Tech bounced modestly, helping the S&P 500 reclaim its 50d ma and earnings continued to come in pretty strong. Major US indices were hovering around unchanged levels. However, on Thursday the confluence of earnings updates, oil trading above $100, Treasury yields hitting new YTD highs along with increasing volatility across asset classes seemed to be the straw that broke the camel’s back, or at least some short-term technical levels, triggering a bit of a risk off move. Despite the calm at the index level the single stock volatility has been quite elevated, and earnings are adding to that dynamic.

All in all, considering the overarching macro backdrop the equity weakness is modest, but it does feel like we are on shaky footing with volatility starting to pick up across asset classes and with some technical damage being done. The S&P 500 broke back below its 50dma at the open yesterday and made a new low for the month of July. The index stabilized today but failed just below the 50d ma today on its rally attempt, filling most of the gap.

Central banks will take the spotlight next week with rate decisions from the US, UK and Japan. US PCE and GDP data will also be a headliner, but comes out the day after the Fed decision. Earnings will continue to flood the tape and include mega cap tech names Apple, Meta, Microsoft, Amazon, along with UPS, Coca-Cola, Visa, Mastercard and Exxon, among many others. Enjoy your weekend.