META: Boom or Bust on Friday, 26 July ?

JC888
07-26

In a few weeks’ time, $Meta Platforms, Inc.(META)$ is set to be hit with its first EU antitrust fine for tying classified advertisements service Marketplace with its Facebook social network, according to people with direct knowledge of the matter.

The move by the European Commission will come more than a year and a half after it accused the US tech giant of giving its classified ads service Facebook Marketplace an unfair advantage by bundling the two services together.

The EU competition watchdog also said Meta abused its dominance by unilaterally imposing unfair trading conditions on competing online classified ads services that advertise on Facebook or Instagram.

Penalty & Fines.

Meta could face a fine of as much as $13.4 billion or 10% of its 2023 global revenue, although historically EU sanctions are usually much lower than that cap.

The Commission will likely issue its decision in September or October before EU antitrust chief Margrethe Vestager leaves office in November, with option for the time to slip, the people said.

The Commission declined to comment.

Meta’s spokesperson Matt Pollard reiterated its previous comments:

  • The claims made by the European Commission are without foundation.

  • We continue to work constructively with regulatory authorities to demonstrate that our product innovation is pro-consumer and pro-competitive," Meta said.

Last year, Meta sought to :

  • Settle the EU investigation by curbing the use of competitors' advertising data for Facebook Marketplace.

  • However, this concession was rejected by the EU enforcer, other sources told Reuters.

  • Strangely enough, a similar offer was accepted by the UK competition regulator.

Separately, Meta was charged by the Commission this month of failing to comply with landmark tech rules because of its newly introduced pay or consent advertising model launched in November.

More troubles at the horizon ?

Technical Analysis

Meta Stock Price - 15 July 2024 to 25 July 2024

Since $CrowdStrike Holdings, Inc.(CRWD)$ worldwide outage incident on 19 Jul 2024, most tech stocks have taken a beating.

While the CRWD incident have been resolved and most businesses have returned to operations, demise of Magnificent 7 stocks is still ongoing.

Meta Platform — 1 of 7 was not spared either. (see above)

Above graph chart shows Meta’s stock price movement from 15 Jul 2024 to 25 Jul 2024.

Meta is above its 200-day moving average (ma) but below its 50-day ma, implying more pullback in the immediate to mid term.

With its relative strength index (RSI) at “35”, Meta is at the cusp of being tagged asoversold”.

Below are Meta’s resistance & support levels:

  • Pivot point 1st Resistance level (high) - $261.22.

  • Pivot point 2nd Resistance level (high) - $268.29.

  • Pivot point 1st Support Point (Low) - $248.65.

  • Pivot point 2nd Support Point (Low) - $243.15.

Market Sentiments.

Like it or not, market sentiments do affect a stock’s price movement.

After Wed, 24 Jul 2024 crash, investors were “desperate” for some good news to buffer the market’s descent.

Two bright sparks came calling on Thursday.

(1) Q2 2024 GDP (first cut)

A better-than-expected gross domestic product (GDP) report released on Thursday morning, gave some semblance of hope to investors.

US economy expanded by 2.8% versus Wall Street expectations of 2.0% versus Q1 2024’s data of 1.4%.

It fueled hopes of a so-called “soft landing” from the Fed.

There were even speculations that the Fed could (a) lower rates by -0.5% come September, instead of the widely expected -0.25%.

It also gave rise to false & unsubstantiated pretense that small-cap stocks and defensive sectors getting a boost.

Nevertheless, an injection of positive vibe, compared to Wednesday.

(2) Tech: IBM stellar Q2.

On Thu, 25 Jul 2024 - tech stock $IBM(IBM)$ brought a ray of hope, back to the Tech sector.

It reported a second-quarter results that surpassed analysts’ predictions.

Key numbers (according to LSEG).

  • Earnings per share: $2.43 (adjusted) vs. $2.20 expected.

  • Revenue: $15.77 billion vs. $15.62 billion expected.

  • Net income: was $1.83 billion, up by +15.82% YoY.

The good news helped to cushion another major fall in tech stocks across the board.

IBM on the other hand, rose +4.33% and is poised to rise further by +0.67%, to round off the week.

What’s In-store for Friday?

(1) Quarterly Earnings.

It would be a “dulled” day going into Fri, 26 Jul 2024.

There will not be any bigwigs reporting their earnings on the last day of the work week.

Having said that, two stocks reporting their earnings caught my eye:

(2) Personal Consumption Expenditure (PCE)

On Friday, this will be a crucial piece of data to look out for before trading day starts.

  • Headline inflation (YoY) is expected to dip by -0.1% to 2.5% vs May 2.6%. (see above)

  • Similarly, core inflation (YoY) is expected to dip by -0.1% to 2.5% vs May 2.6%.

This inflation data is timely and crucial to the Central bank as they convene on Jul - 30 to 31, for their FOMC meeting.

Will US June 2024 - PCE data be enough to life IBM to end this week on a high ? Yes, I think so!

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  • Do you think a marginally favourable PCE data to help US market close on a “high” ?

  • Do you think Meta Platform will continue to tumble despite a favourable PCE results ?

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Comments

  • ZebulonToynbee
    07-28
    ZebulonToynbee

    Analysts on Wall Street project that Meta Platforms (META) will announce quarterly earnings of $4.69 per share in its forthcoming report, representing an increase of 45.2% year over year. Revenues are projected to reach $38.27 billion, increasing 19.6% from the same quarter last year.

  • ZoePaul
    07-28
    ZoePaul

    Meta businesses are not doing as good as the news says they are.

    • JC888
      Hi, tks for reading my post. I find that it looks a bit overbought... Wonder what happens when it's quarter results are out....
  • neversell
    07-28
    neversell

    waiting for the result, think it will be great

    • JC888
      Hi, tks for reading my post. Estimates look good but market these days are unpredictable....
  • Taurus Pink
    07-28
    Taurus Pink
    [龇牙] [龇牙] [龇牙] [龇牙]
    • JC888
      Hi, tks for reading my post and support as always....
  • JL1Apr
    07-27
    JL1Apr
    Boom. Everything booms.
    • JC888
      Hi, tks for reading my post. Hope u liked it.
      Hope you will look for my post on Goldman Sachs and read.
      Feel it's important especially for coming August. Help to Repost also ok....
  • JC888
    07-26
    JC888
    Hi, tks for reading my post. I make time to write & share.
    Pls "Re-post" so that more get to know. Tks! Rating is important (to me).
    Consider "Follow me" and get first hand read of my Daily new posts? Thanks!). Tks!
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