In this weekly Jarvis® market update, host Brian Dress, CFA, and CIO Nolan Langford discuss two main topics: the Federal Reserve’s latest 0.75% rate hike and its market implications, and a review of the week’s heavyweight earnings reports. They note a broad‑based rally in the S&P 500 (+1.8%), Nasdaq (+0.9%) and Russell 2000 (+2%), with the VIX falling below 23, indicating reduced volatility. The Fed’s aggressive hike—larger than usual and the second consecutive increase—was paired with Chairman Powell’s data‑dependent stance, prompting a market reaction that deviated from the typical post‑press‑conference dip. Treasury 10‑year yields fell from above 3% to under 2.7%, suggesting easing inflation expectations. The earnings segment covers mixed results from major firms such as Walmart, Alphabet, Microsoft, Meta, Chipotle, Enphase Energy, and highlights positive market reactions to Google and Microsoft despite modest earnings. They also spotlight standout performers like NOV (oil‑field services), O’Reilly (auto parts), and InMode (aesthetic equipment). The hosts suggest investors shift focus from macro pessimism to identifying resilient businesses that can thrive in a slower economy. Throughout, they promote their research services (Left Brain Investment Research, The Chosen stock/bond ideas), the bi‑weekly Jarvis Newsletter, and encourage viewer engagement via likes, comments, and subscriptions. The episode concludes with a preview of upcoming earnings (MicroStrategy, Starbucks, Moderna, Under Armour, Fortinet, EPAM) and a brief personal note about NFL training camps.
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The Fed weighed in and we heard from many of the world's largest companies on this week's earnings calendar. We cover these stories and more on this week's Jarvis Update. I'm your host, Brian Dress, joined as always by our CEO and Chief Investment Officer, Nolan Langford. Nolan, welcome to the program.
Hey, Brian.
Glad to be back with you, and this is the biggest week of earnings. Markets reversed after the Fed announced a 0.75% hike and plans to be data dependent. We got two topics this week as we usually do. The first is going to be our reaction to the Fed news, and the second will be our earnings review. Before we get started, a couple of announcements. First of all, we produce this show for you, the everyday investor, whether you have 401(k)s, IRAs, handle your own investments, or work with an advisor that buys mutual funds or ETFs. If you'd like a second opinion, we'd love to talk. Make sure to give us a call at the number that we list below. And also, if you're an institutional investor, we got something for you as well. And that's our research service, Left Brain Investment Research, where we bring to you 8 to 10 stock reports each month and our best ideas for both stocks and bonds each month, which we call The Chosen. So check that out. That comes out this weekend. Either way, sign up for our biweekly newsletter, The Jarvis Newsletter, which is off this week. But look again for it again next week. With that, we'll get started with the market recap. First of all, we had kind of an up and down week. It was down at the beginning and up at the end. So S&P was up around 1.8%, NASDAQ up around 0.9%, and then finally the Russell, the leader this week, the small cap index, up 2%. So pretty broad-based rally out there. VIX is still trending down— that's the volatility index— down below 23, and around 20 or lower we consider normal. So that's good. Any initial thoughts on this week's action, Nolan?
No, I just will say it felt better. Uh, it almost seems like we had a month rolled into a week here with all the activity. But by and large, you know, I say that we have earned a lot of earnings reports that came out, and, uh, by and large they were not great, but the stock action afterward has been great. And so I would say That tells me that maybe we have a lot of bad news priced in already. A lot of crosscurrents, most of them negative. But if the market can kind of get through this, it looks like investors are sort of seeing through the second half of the year and maybe pricing in a 2023 recovery. So I would say it feels a little bit better this week.
Thanks, Nolan. I think that's a great start for what we're going to talk about. So we'll jump right into our, to our topics. So topic 1, the Fed weighs in again. The Fed raised rates by 0.75%. That's a lot bigger than they normally do, but that was the second time in a row. Market like what it heard from Jay Powell, Chairman of the Fed. Uh, he said they're going to be data dependent, and we've got 2 months till the next meeting, so we've got a chance for inflation to come back down before they meet again and hike rates even higher. So we'll see how that goes. The market, market liked it. We've seen similar moves, Nolan, after previous Fed press conferences. We've noticed the pattern that I think it was after the last 2 or 3 press conferences, large moves up the day of the press conference and then moves down the day after. This week we didn't see that move down, so maybe something's different. I also wanted to mention 10-year Treasury rates have moved dramatically. They've dropped significantly in the last 2 weeks. They were above 3%. Now we're down below 2.7%. I guess what that says to me is that inflation expectations are starting to crest in the market. So all that being said, Nolan, any takeaways from the Fed? Is there reason for excitement, or should we remain cautious? And, uh, do you think things are looking a little bit different now?
I think it's time for investors to do what investors should be doing, is, uh, taking out their list of what they should buy and what they think looks good over a 2 or 3 year time horizon. I think we're past the time now for optimum pessimism where we're looking at all of these macro Fed-induced events. And now it's time to roll up our sleeves and take a look at businesses, who's performing. And in this environment, even if it's going to be a slower environment for a while, competitively, who are some good businesses that are doing well in spite of, and who might be getting stronger, um, you know, because of, of what's happening. So I think we're at that point now, right?
Especially companies that can do well in a down economy, um, very compelling stories. And, uh, we're going to talk about a couple of them coming up in our second topic. Before I get to the second topic, just want to remind everyone watching, we'd love for you to like and share the video with your network. It helps every investor find the video, which we think is pretty good content. Also, drop a comment below. We'd love to talk to you and engage with your comment and answer any questions you might have about investing. Finally, subscribe to the channel so you can get a notification when the next video comes out, which we have out every Friday. Um, with that being said, let's jump into the second topic. Topic 2, it's an earnings review again. Nolan, this is the biggest week of earnings, I think, for this, for the season. We started off the week with some negative reports. We had Walmart, WMT, we'll put up the chart. They pre-announced that results weren't going to be quite as good when they actually do report ultimately. That really spooked the market early this week, and we had a pretty dramatic down move early. We also have heard from some of the bigger companies, especially in the growth space, I'm going to throw up a couple of these charts. That includes Alphabet, that's GOOG. We've got Chipotle, CMG, Enphase Energy, ENPH. And then we also have Meta, that's the old Facebook, META. And finally, Microsoft, MSFT. We had some mixed results, some good, some bad. Uh, reactions were mixed as well, but it didn't really correspond quite as much as we've seen in previous quarters. So, Nolan, one thing that really stood out to me was the positive reactions we saw from both Google and Microsoft, even though earnings were a bit mixed there. They weren't terrible, but they weren't great. Is something changing underneath the surface that is, uh, you know, allowing investors to react more positively, um, even when results aren't terrific?
I think yes. I think, you know, there could be a couple of reasons for it. But clearly, at least in the last several weeks this earnings season, companies, um, really haven't been punished universally, not near as hard as we've seen earlier this year when there's a headline miss. So maybe investors are starting to take a step back and digest more of a read-through, not just the top line, but what it means going forward. And at least with those two and several others, that, that has definitely been the case.
Absolutely. I think it's really, you know, we've kind of alluded to this the last few weeks. I think the tide of negative thinking and pessimism is sort of cresting and going out, and we're starting to see people reading through, okay, this period's gonna have an end at some point, and it will be at some point a favorable investment environment again. So I think we're all getting out our pencils and thinking about what are the best ways to play the market. Um, any other earnings stand out for you, Nolan? We saw hundreds of earnings this week. Um, I'll just throw it out to you kind of open-ended. Were there any other businesses that stood out? Um, and then we can talk about it from there.
Yeah, two to stick out for me. Um, one is NOV, National Oil Well Varco, which is the big oil services equipment manufacturer. Really good solid earnings today. We had a slide in energy prices over the last 6 weeks. So this is a late-cycle equipment manufacturer that came out with a nice number, uh, today that stood out. O'Reilly, which is the big auto parts store, uh, stood out. 6% same-store sales, and, uh, the stock has recovered nicely here at the last couple of weeks. And then the last one is one you and I were talking about, Inmode, um, which is on our chosen list this month for our subscribers. And it's a maker of aesthetic equipment for those doing cosmetic surgeries. And, uh, it's a name that we like, but very impressive on earnings.
Again, as we always say, there's always some positive news somewhere if you look deep enough. And we're starting to see it in, in companies like those. NOV, we had, uh, I'm sorry, O'Reilly. At NOV, we had O'Reilly, and then we had InMode. So, uh, very positive signs there. And we mentioned InMode last week, so I'm happy to see that. Um, okay, well, we'll just move on. I know we have, uh, plenty of earnings next week. I'll throw out a few. Um, again, we have hundreds of earnings. I went and chose a few I thought would be interesting. We've got MicroStrategy, MSTR. They're very involved in the cryptocurrency. We're interested to see how that's affected their business. Starbucks, SBUX. That's a stock that's been on hard times. Uh, the business is starting to improve, so we'll look to see what they're doing there next week. Uh, Moderna, MRNA. We've got Under Armour, UAA. Fortinet, FTNT, that's in the cybersecurity space. And then a name we've been following closely this year, EPAM Systems, EPAM. Um, Nolan, anything that sticks out for you next week? What are you looking forward to?
Yeah, I want to see if the stock market action is the same as it is this week, meaning there's a lot of forgiveness when you miss. There's a lot of celebrations when you make it. It'll be interesting to see if that dynamic holds for next week. Absolutely.
We'll keep it short and sweet this week, Nolan. We're back to training camps in the NFL, so that's exciting, exciting news for our weekends coming up here. But I think we'll cut it off there and we will see you again next week. Thanks, Nolan.
