We saw a significant downturn in the stock market yesterday, with NASDAQ experiencing a 2.0% drop, more than the S&P 500 and Dow Jones Industrial Average, which fell by 1.6% and 1.5% respectively. The decline was exacerbated towards the close due to a wave of end-of-month selling, reflecting a broader trend of de-risking throughout April.
We also saw Gold contract going below $2,300 and the Crude Oil WTI also fell below $82 per barrel.
Significant Losses From Tech Stocks
Notable losses were recorded by NVIDIA (NVDA) and Meta Platforms (META), despite both companies showing early gains during the day. NVIDIA closed down at $864.02, a 1.5% decrease, after initially peaking with a 1.2% gain. Similarly, Meta Platforms ended the day at $430.17, down 0.6%, after an early increase of 1.6%.
Rise In Market Rates Catalyse Downward Movement
The market's downward movement was influenced by a rise in market rates, following a report that showed a 1.2% increase in Q1 employment compensation costs, exceeding the expected 1.0%. This has added to the ongoing concerns about persistent inflation and potential delays in interest rate cuts by the Federal Reserve.
Sectors like Energy, Consumer Discretionary and Information Technology went down more than 2%, we saw sea of Red on these 8 sectors.
Despite widespread losses across sectors, a few companies bucked the trend due to positive earnings reports. Eli Lilly (LLY) saw a significant rise, closing at $781.10, up 6.0%. Corning (GLW) and 3M (MMM) also posted gains, closing up 5.0% and 4.7% at $33.38 and $96.51, respectively.
Stocks To Watch and Monitor Today (02 May 2024)
Amazon (AMZN, Financial) reported a strong first quarter, with earnings per share of $0.98, surpassing the consensus estimate of $0.83. The company's revenue reached $143.3 billion, up 12.5% year-over-year, beating expectations by $750 million. Notably, the North America segment saw a 12% increase in sales, while AWS sales grew by 17%. However, Amazon's guidance for the second quarter suggests a slowdown in growth, with net sales projected to be between $144.0 billion and $149.0 billion, slightly below the consensus of $150.09 billion.
We could see volatility trading after hours post earnings, so this could present us an opportunity to trade it today (02 May), if we see that the wedge is a weird one, widening one actually.
Demand should be coming today (02 May) but we will need to watch the price action on the MACD side.
$SUPER MICRO COMPUTER INC(SMCI)$
Super Micro Computer also exceeded expectations with a third-quarter non-GAAP EPS of $6.65, outpacing the consensus by $1.08. However, its revenue of $3.85 billion, a 200.8% increase year-over-year, fell short of expectations by $50 million. The company has raised its revenue guidance for fiscal year 2024, now expecting between $14.7 billion and $15.1 billion, against a consensus of $14.59 billion.
Another stock that is potential trade is SMCI we are seeing a widening wedge as well, but demand looks good, but there might be a strong volume coming with the revenue guidance raised for fiscal year 2024.
Advanced Micro Devices posted a modest earnings beat with a first-quarter non-GAAP EPS of $0.62, slightly above the expected $0.61. The company's revenue of $5.47 billion, up 2.2% year-over-year, also surpassed forecasts. AMD's data center segment was particularly strong, with revenue up 80% due to sales of its AMD Instinct GPUs and EPYC CPUs.
This might not be a good potential trade but if you are holding it, then that should be fine.
Pinterest delivered a positive surprise with its first-quarter results, achieving a non-GAAP EPS of $0.20, which beat estimates by $0.07. Revenue grew 22.8% to approximately $740 million, driven by a 12% increase in global monthly active users to 518 million.
This is a good potential trade with declining wedge, and we could see volume increasing post market and there should be a strong demand build up, and this is a good reversal example.
I would be looking to trade PINS.
Summary
Other than Amazon, Super Micro Computer, I think PINS is another potential trade. But with Fed statement, we could trade on the strength of these three stocks earnings result.
Other than that, I would avoid making any move in other sectors, will need to watch closely the S&P 500 sectors.
Appreciate if you could share your thoughts in the comment section whether you think these three earnings stocks should give potential trade today (02 May 2024).
@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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