Earnings Week- Boom or Bust

This week we unravel a high anticipated earnings season including: Tesla, NXP, Microsoft, AMD, Apple, Visa, UPS, Shopify, Pinterest, Facebook, Caterpillar, Amazon, NIO, Align Tech and many more. 

We advise traders to be cautious going into likely, a stellar earnings across the board, especially for technology behemoths because of bond yield risk. The 10-year Treasury Bond Yields sit at 1.567% as of Friday and this is where they have settled in. I think with Powell speaking Wednesday, this could cause some jitters and possibly dampen momentum for technology stocks. Be cautious if you are in options, as they will be fast moving and possibly blow up quickly, if the 10-year yields rise to 1.65/70 this week. I do not have puts or a short position, however, we cautiously trimmed some options positions, as this yield risk looms. We expect Apple, Google, Amazon, Tesla, Microsoft (Big Tech) to crush earnings and push them higher. 

The most interesting earnings report we see is Amazon. The stock has been sideways since last September due to "Covid Valuation", as investors feared their revenue and EPS comps for 2021 would be tough to beat. I think they will report another record quarter and will be watching to see if it can break through 3500s to all time highs. 

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