31.07.2026 - Dip Buyers are back
After the recent sell-off, investors were quick to return to the market following another strong round of Big Tech earnings. Once again, the familiar "buy the dip" mentality dominated trading.
Amazon surged around 11% after reporting its fastest revenue growth in more than four years, reinforcing confidence that cloud computing and AI spending continue to support its business.
Apple delivered a far less reassuring message. The stock fell almost 8% after warning that supply constraints could limit growth in the coming quarters. Investors also need to consider whether the expected increase in iPhone prices will weaken demand, particularly as Apple continues to struggle to regain momentum in China.
Microsoft gained an extraordinary 15.5%, adding almost USD 500 billion in market capitalization in a single trading session. Even by the lofty standards applied to mega-cap technology companies, the market's reaction was remarkable.
Supported mainly by Microsoft's results, the Nasdaq 100 rallied 3.4% after six consecutive losing sessions, as investors once again decided that a roughly 10% correction represented a buying opportunity rather than the beginning of a broader downturn.
Markets:
Equities: US futures lower after trading more than 1% higher earlier in the session
Bonds: yields continue to rise - US 10y yield above 4.73%, Japan 10y yield 2.80%
Commodities: Oil prices continued their advance, WTI around USD 85/barrel and Brent around USD 88/barrel
Precious metals: lower, gold at USD 4’045/oz, silver trades above USD 57/oz
Currencies: USD slightly higher
Cryptos: significantly lower - Bitcoin at USD 62k
Volatility: The VIX index almost unchanged with 17
My View: Once again, investors are chasing short-term gains by aggressively buying the dip. In my view, they are largely ignoring the broader macroeconomic picture.
The war involving Iran continues to push oil prices higher, and I believe the risk of a much larger price spike still lies ahead. Higher energy prices would inevitably feed into inflation, putting further upward pressure on government bond yields and increasing the likelihood of additional interest rate hikes.
Meanwhile, the Federal Reserve remains behind the curve. Despite increasingly restrictive market conditions, investors continue to price in an optimistic scenario that I believe is inconsistent with current macroeconomic risks.
For me, the combination of rising oil prices, persistent inflation, higher bond yields and tighter monetary policy ahead is not a favorable backdrop for risk assets.
I therefore keep my positioning unchanged. I continue to expect considerably more market turbulence ahead.
Do not try to catch a falling knife.
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