28Apr11:03 amEST

One Leader Goes One Way, The Other Leader Goes the Other Way...

With yet another sluggish open in equities, it is fairly clear that the market is acknowledging the gravity of today's lineup: The FOMC later today during the session, AAPL FB earnings after the bell, and then President Biden's address to a joint session of Congress for the first time later this evening. In other words, the market is biding its time before this rapid fire series of events which could tip the scales. 

Overall, with IWM above $225 and actually flipping red-to-green as I write this, it remains tough to turn bearish just yet. Tech stocks are slightly lower, and upside momentum in many names has indeed been muted for much fo the week. But, as we know, that can change quickly. Clearly, the market does not want to see the FOMC reveal any plans The Fed may have to begin to walk back their historically easy policies. And Biden will likely stay precisely on script tonight with a focus on helping families.

AAPL and FB earnings, of course, are definite wildcards. But, on that note, it is interesting to see last evening's earnings monsters go in different directions. GOOGL is up 4%, while MSFT is down more than 3%. First and foremost, these are not outsized moves. So, there is no point in extrapolating too much from them, just yet. 

However, on CNBC this morning I did see the hosts wondering why MSFT would be selling off after such a great report. Recall previous discussions we have had here and with Members where we noted that Microsoft became the epitome of the TINA and ZIRP trades in recent years, with fund managers and retail alike piling into it as a can't-miss name which simply had to go up in this setting. At some point, and I think that point is likely now, the upside reflexivity succumbs to gravity. As for MSFT's "wonderful report," that has already been priced in to the stock, in all likelihood. The coming weeks will be telling for whether this thesis proves true.

But as to the issue of why GOOGL is not doing the same fade, each stock--especially a leadership name--can move to its own drumbeat. Should the one-way MSFT express derail in in the coming weeks I think we can more reasonably expect the other leaders, including FANG names, to eventually do the same headed into summer. 

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