MSFT Stock Blows Up On Earnings As Markets Get Election Nerves

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Yesterday MSFT had poor earnings and its stock dumped 6%.

AAPL had bad earnings too and fell.

Facebook META also pooped out.

GOOG, which is the one I was most interested in this weekend, had good earnings and gapped up, but sold the gap yesterday too.

Big cap tech stocks are faltering before the election, but this is nothing new.

Take a close look at the above chart and you should notice that the MSFT/SPX relative strength ratio has been falling since July.

That means that MSFT stock has been underperforming the performance of the S&P 500 since July. Stocks that lag the S&P 500 like this are prone to sharp drops at any moment.

Remember, the Nasdaq 100 and big tech stocks started to falter in the summer, as we saw money rotate out of the big tech stocks that had gone up so much, since the start of last year, into more interest rate sensitive plays, like utilities, REIT’s, and banks.

Then, as the weeks went by, that buying spread into the Russell 2000 and cyclical companies.

Now, big cap tech is faltering again!

In fact, AI fad stocks, except NVDA, are now in TOTAL collapse.

Check out SMCI.

We may get some big gyrations around the election, but the market should rally into the end of the year, and, if it does, I would not expect the big cap tech stocks to lead the way, but these cyclical stocks and sectors poised to benefit from the programs of whoever the next President is.

These earnings have put a dent in big cap tech, but that’s ok, they are not the only thing to buy in the financial markets.

Yields have been going up the past few weeks.

Gold has gone up too, but took a dip the past few days.

This weekend I’ll share my game plan for the election with WSW Pro members.

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