Breakouts, Backlogs, and a Shift in Character

The market keeps doing what strong markets do.

Yesterday we saw new highs in the S&P 500, with broad participation and, most importantly, stocks being rewarded for reporting earnings. 

This was one of the heaviest days of the season so far, and the overall market message was positive.

Sure, not every report was rewarded. But when you step back and look at the beat sheet, the weight of the evidence leans bullish.

*Click the image to enlarge it

You had a long list of stocks posting powerful upside reactions from names like Masco $MAS, Boston Scientific $BSX, Philip Morris $PM, Intuitive Surgical $ISRG, and right in the middle of it all were two names that told a much bigger story.

Those names are GE Vernova $GEV and Boeing $BA.

Let’s start with GE Vernova because this is what leadership looks like. 

GE Vernova posted a blockbuster earnings report, beating the earnings expectation by nearly 800%.

As a result, GEV rallied nearly 14% for the 2nd-best earnings response in the company’s short public history. The stock also closed the day at a new all-time high.

And when you line that overwhelmingly bullish technical story with the fundamentals, it’s not hard to see why.

This is a company sitting at the center of global electrification, one of the most powerful structural themes in the market right now. 

Demand is accelerating rapidly. You can see this in their backlog, which has surged to roughly $163 billion and is expected to reach $200 billion by 2027.

You're seeing growth across the entire business. 

Gas power demand is booming globally. Electrification is benefiting from grid expansion, data center demand, and national security spending. 

And pricing power is improving alongside it, with new orders coming in at meaningfully higher price points.

Putting it all together, we expect GEV to continue pushing toward new all-time highs and to lead the market higher. 

Now let’s talk about Boeing.

Not because it’s leading, but because earnings sentiment is shifting significantly.

Coming into this report, aerospace and defense had been getting punished across the board. We saw it earlier this week, stocks like RTX Corp $RTX, Northrop Grumman $NOC, and even GE Aerospace $GE getting sold despite beating expectations.

And you're seeing the Aerospace & Defense ETF $ITA significantly lag the broader market.

So when Boeing stepped up and not only delivered a double beat but actually got rewarded for it, that stood out to us.

Following a better-than-expected earnings report, Boeing rallied 5.5% and snapped a 3-quarter streak of negative reactions.

This is the kind of shift in earnings sentiment we're constantly hunting for here at The Beat Report.

And when you dig into the fundamentals, it's clear why the market liked Boeing's earnings report.

Commercial airplanes are stabilizing with production rates increasing, defense operations are improving after years of restructuring, and services continue to deliver strong results.

The backlog remains enormous, now approaching $700 billion, giving Boeing long-term visibility that most industrial companies would kill for.

So, while the income statement is still messy, the company posted a small net loss this quarter as it continues to work through costs and legacy issues. 

The direction of these fundamental trends matters, and right now they're trending higher.

With yesterday's shift in earnings sentiment, we expect BA to put the finishing touches on this textbook bearish-to-bullish reversal pattern. And if that happens, the path of least resistance will remain higher for the foreseeable future.

In the Daily Beat, we break down these shifts as they happen.

But in the Premium Beat Report, we’re acting on them—focusing on the stocks where technical breakouts and fundamental momentum are aligned.

Because those are the ones that don’t just react…

They run.

Happy fishing,

-The Beat Team