The pattern that we observed throughout the week at the NYSE index appeared to shadow yesterday’s trading session. We saw some early gains which seem to dissipate after the market show lack of strong buying interest.
The dominance of decliners over advancers across both NYSE and NASDAQ was reflected in the trading session. Yesterday session saw the major indexes ended mixed, with S&P 500, NASDAQ and Russell 2000 giving their fifth consecutive loss, only Dow Jones managed to gather a marginal gain.
Significant Contribution From Notable Movements In Heavy-weighted Stocks
Yesterday market dynamics was largely contributed by some notable movements in heavily-weighted stocks. Microsoft, Amazon and Tesla suffered declines, with Tesla hitting their new 52-week low.
Their performances had a notable impact on the overall index performance, particularly affecting the S&P 500 and NASDAQ.
IT, Consumer Discretionary Underperform. Comm Services Outperform
We saw the S&P 500 Info Tech sector drop by 0.89%. The decline is mainly fueled by losses in major tech stocks. The consumer discretionary sector also underperformed, losing 0.71%, this follows the trend set by significant consumer stocks.
We saw positive performance from the S&P 500 materials, consumer staples, healthcare and financials. The Communication Services outperformed and marking the largest gain among the sectors, and this sector have been on the positive based on 1 Day, MTD, QTD and YTD.
Mixed Responses To Recent Earnings Release
We have seen mixed responses to the recent earnings release, this has affecting the stock performances. We saw the stock faced steep declines following their earnings reports.
The notable are $Taiwan Semiconductor Manufacturing(TSM)$ and $Netflix(NFLX)$. Taiwan Semiconductor Manufacturing has posted the first-quarter results exceeded estimates, with revenue growing 12.9% year-over-year and EPS per American Depositary Receipt outperforming expectations. This better performance came after TSM experience a slight revenue decline compared to the fourth quarter of 2023, highlighting the company's resilience in a challenging market.
But we saw TSM fell almost 5% after their CEO expressed caution regarding the overall semiconductor market growth in 2024, despite the anticipation of a healthy growth year ahead in 2024 highlighting TSM resilience in a challenging market., it did not help the stock price.
Netflix reported their first-quarter earnings report that exceeded expectations in subscriber growth and financial forecasts. Netflix outperformed Bloomberg's consensus of 4.84M additions, revenue saw a 15% increase to $9.37B, with operating income and margin also experiencing substantial growth.
But these has caused Netflix to experience a notable rise and subsequent pullback in early after-hours trading. But the drop in after hours trading of more than 4% was mainly due to signaling that the positive surprises could be over, forecasting revenue growth slightly below analyst targets.
Rising Market Rates - A Challenge To Stocks
We saw both 10-yr and 2-yr Treasury Note Yield increasing and this rising market rates has posed a challenge to the stocks. This increase in yield has came while we await the weekly jobless claims report and a better-than-expected Philadelphia Fed survey for April.
These economic data should indicate a solid labor market and potential for economic growth. With the existing home sales data highlighting challenges in the housing market, including high prices and low inventory.
Crude Oil Decline While Gold Increase In Value
Commodities experienced mixed movements, with crude oil seeing a decline, while gold increased in value. Natural gas, silver, and copper prices also saw changes, reflecting broader market trends and investor sentiment.
Benchmark U.S. crude oil for May delivery rose 4 cents to $82.73 per barrel Thursday. Brent crude for June delivery fell 18 cents to $87.11 per barrel.
Wholesale gasoline for May delivery fell 2 cents to $2.71 a gallon. May heating oil fell 4 cents $2.53 a gallon. May natural gas rose 5 cents to $1.76 per 1,000 cubic feet.
Gold for June delivery rose $9.60 to $2,398 per ounce. Silver for May delivery fell 2 cents to $28.38 per ounce, and May copper rose 10 cents to $4.44 per pound.
Sectors To Look At Next Week
I personally would look at these sectors next week: S&P 500 Consumer Staples : $Consumer Staples Select Sector SPDR Fund(XLP)$
I believe with the economic and labour data, we should be seeing stronger consumer sentiment, and the consumer staples sector would benefit from it, as compared to consumer discretionary, because consumer would be conscious of spending on luxury or ‘good to have’ items.
Whereas consumer staples sector are providing essentials, while inflation is not soaring but it is staying, so there is a shift towards consumer staples.
Summary
While we are expecting some more economic data as well as labour data, we need to take note that inflation might remain sticky and consumer behavior is something we can work on.
Same to investing, we could be seeing some traders and investors shift towards favouring mega caps over mid caps, and with the middle east tensions getting worried, we might see commodities side to have some fluctuation as well.
At time of this writing, we heard news of explosions seen near Iran, while we await more confirmation, I believe it would be better for us to adopt a cautious approach.
Appreciate if you could share your thoughts in the comment section whether you think it would be better to remain cautious while looking for opportunities in the market?
@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.
Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.
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