Cooler PPI

Please click here for an enlarged chart of ASML Holding NV (NASDAQ:ASML).

Note the following:

  • This article is about the big picture, not an individual stock.  The chart of ASML is being used to illustrate the point.
  • ASML is important because ASML is the undisputed leader in extreme ultraviolet lithography machines.  Without ASML’s machines, none of the advanced AI chips could have been manufactured.
  • The chart shows ASML stock gapping up on earnings.
  • The chart shows that even after the earnings gap up, ASML is still below zone 1 (resistance).
  • The chart shows ASML is comfortably above zone 2 (support).
  • The ASML earnings report is outstanding.  Here are the details:
    • ASML reported Q2 EPS of EUR 7.58 vs. EUR 6.91 consensus.
    • Revenue came at EUR 9.33B vs. EUR 10.23B consensus.
    • ASML guides Q3 revenue of EUR 11.0 – 12.0B vs. EUR 10.43B consensus.
    • ASML guides FY26 revenue of EUR 43B – 45B vs. EUR 39.82B consensus.
  • In our analysis, ASML can be a tell for semiconductors and, in turn, the entire stock market if it breaks above zone 1 or below zone 2.
  • ASML earnings are bringing optimism and buying in the AI trade in the premarket.
  • Yesterday, we shared with you that the Consumer Price Index (CPI) came at -0.4% vs. -0.1% consensus. Prudent investors should note that not even one of the 57 economists who contributed to the consensus was even close to being correct. 
  • Producer Price Index (PPI) came cooler than expected.  Here are the details:
    • PPI came at -0.3% vs. 0.1% consensus.
    • Core PPI came at 0.2% vs. 0.4% consensus.
  • Of note, prior PPI has been revised to 0.6% from 1.1%.  1.1% was a four year high.
  • Just like CPI, economists were wrong on PPI.
  • The Fed’s Beige Book will be released at 2pm ET.
  • The U.S. continues to attack Iran.  Iran continues to retaliate.  In our analysis, Iran is taking advantage of President Trump’s constraints due to the upcoming midterm elections.  Oil is not spiking as traders are believing in TACO (Trump Always Chickens Out).

Magnificent Seven Money Flows

Most portfolios are now heavily concentrated in the Mag 7 stocks.  For this reason, it is important to pay attention to early money flows in the Mag 7 stocks on a daily basis. 

In the early trade, money flows are positive in Apple Inc (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), Meta Platforms Inc (NASDAQ:META), Microsoft Corp (NASDAQ:MSFT), and Tesla Inc (NASDAQ:TSLA).

In the early trade, money flows are negative in Alphabet Inc Class C (NASDAQ:GOOG) and NVIDIA Corp (NASDAQ:NVDA).

In the early trade, money flows are positive in SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust Series 1 (NASDAQ:QQQ).

Momo Crowd And Smart Money In Stocks

Investors can gain an edge by knowing money flows in SPY and QQQ.  Investors can get a bigger edge by knowing when smart money is buying stocks, gold, and oil.  The most popular ETF for gold is SPDR Gold Trust (GLD).  The most popular ETF for silver is iShares Silver Trust (SLV).  The most popular ETF for oil is United States Oil ETF (NYSE:USO).

Oil

API crude inventories came at a draw of 0.056M barrels vs. a consensus of a draw of 2.7M barrels.

Bitcoin

Bitcoin (CRYPTO:BTC) is seeing buying.

What To Do Now

Consider continuing to hold good, very long term, existing positions and add tactical positions based on signals.

The Arora Report is known for its accurate calls. The Arora Report correctly called the big artificial intelligence rally before anyone else, the new bull market of 2023, the bear market of 2022, new stock market highs right after the virus low in 2020, the virus drop in 2020, the DJIA rally to 30,000 when it was trading at 16,000, the start of a mega bull market in 2009, and the financial crash of 2008. Please click here to sign up for a free forever Generate Wealth Newsletter.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.