Tuesday (29 Oct) saw the market making an upward movement which was largely driven by mega caps and chipmakers. However, within the stocks participating it indicated a negative bias, with decliners outnumbering advancers by a 2-to-1 margin at the NYSE and by a 4-to-3 margin at the Nasdaq.
NASDAQ rose by 0.78% helping it to reach a record close. S&P 500 also increased by 0.16%.DJIA fell by 0.36%, and the Russell 2000 decreased by 0.3%.
The PHLX Semiconductor Index (SOX) closed 2.3% higher, while the Vanguard Mega Cap Growth ETF (MGK) settled 0.9% higher. Alphabet (GOOGL) was a significant winner, gaining 1.7% ahead of its earnings report.
There are mixed earnings results coming through Ford (F) dropped 8.4%, and Pfizer (PFE) declined 1.4% after reporting their results.
Conversely, McDonald's (MCD) saw a slight decrease of 0.6%, while Royal Caribbean (RCL) rose 3.2% as earnings-related winners.
The housing price economic data and October consumer confidence show us that broad-based increase in confidence across all age and most income groups, with a notably optimistic outlook on future business conditions, which could support consumer spending.
August FHFA Housing Price Index increased by 0.3 while the previous was revised to 0.2% from 0.1%. August S&P Case-Shiller Home Price Index was 5.2% with consensus at 5.1%) while previous was at 5.9%. October Consumer Confidence was 108.7 with consensus at 99.0 while previous was revised to 99.2 from 98.7.
S&P 500 Communication Services and Information Technology Only Ones In The Green
We saw only two S&P 500 sectors ended in the green with more than 1%, communication services gained 1.56% while information technology gained 1.12%.
The communication services gains was helped by gains from Meta up 2.62% and Alphabet up 1.78% before its earnings.
The information technology sector was driven by gains from Broadcom up 4.2%, AMD up 3.96% before its earnings result and Lam Research also up by 3.79%.
Note Yield Mixed Influence By Strong October Consumer Confidence
Treasury market activity reflected cautious buying, influenced by a strong Consumer Confidence report for October. Yields initially moved higher but eventually settled close to previous levels after a robust $44 billion 7-year note sale.
The 10-year yield ended six basis point lower to close at 4.253%, while the 2-year yield remained unchanged to close at 4.104%.
Stocks To Watch
$Advanced Micro Devices(AMD)$ experienced a 5% decline in its shares during extended trading following its third-quarter earnings report. The semiconductor company reported earnings of $0.92 per share with revenue of $6.82 billion, up 18% year-over-year. The data center segment showed remarkable growth, increasing 122% to $3.5 billion, driven by AI processors. However, the gaming and embedded segments saw revenue drops of 69% and 25%, respectively, leading to investor concerns despite meeting analyst expectations.
Pfizer (PFE) shares faced pressure despite surpassing Q3 financial expectations and raising guidance. The pharmaceutical giant reported a topline of $2.8 billion, reflecting a 32% year-over-year growth, largely attributed to its COVID franchise, including Paxlovid and the Comirnaty vaccine. Excluding these, the topline grew only 14% operationally, raising concerns about the performance of its non-COVID portfolio, which includes drugs like Xeljanz and Ibrance.
$Alphabet(GOOGL)$ shares rose 1.84% after the company reported strong Q3 results, with GAAP EPS of $2.12 and revenue of $88.27 billion, beating estimates. The company's revenue grew 15% year-over-year, driven by Google Services and Google Cloud, which saw a 35% increase. The robust performance across its platforms, including AI solutions, contributed to the positive investor sentiment.
If we looked at how GOOGL is trading on Monday (28 Oct), it was forming a bullish MACD crossover, and then we saw GOOGL making a nice move up before its earnings on Tuesday (29 Oct).
We saw a robust performance from GOOGL across its platform and this should put them in a good position for more upside movement. This can be seen from how GOOGL is trading above the short-term and long-term MA and also the MTF is showing multi uptrend period.
I would think that GOOGL is in a good position to reach a new highs.
I am holding my position for GOOGL as their AI services should be set to grow better with AI development into software based inference.
Visa (V) reported impressive fiscal Q4 results, with non-GAAP EPS of $2.71 and revenue of $9.62 billion, both exceeding analyst expectations. The company saw a 12% increase in net revenue, driven by growth in payments and cross-border volumes. Visa also announced a 13% increase in its quarterly dividend, reflecting confidence in its ongoing financial performance.
OpenAI, backed by Microsoft (MSFT), has shifted its strategy to designing in-house chips for AI applications, collaborating with Broadcom (AVGO) and Taiwan Semiconductor Manufacturing Company (TSM). This move comes as demand for $NVIDIA Corp(NVDA)$ GPUs surges, prompting OpenAI to seek alternatives. Broadcom's shares rose 3.5% following the announcement.
If we were to consider the servers that currently run the AI workload, most of them are running on NVDA GPUS, so OpenAI strategy to build their own in-house chips is encouraging but they need to consider the inference part where consumer uses devices still powered by NVDA chips to get the results.
So I am thinking NVDA Blackwell chips would differentiate this AI development, organization could be running AI workload on their own in-house chips, but NVDA GPU chips are still popular among developers who are testing or confirming the inference part of their models.
Hence I still have confidence in NVDA share and holding my position.
First Solar (FSLR) reported Q3 earnings with GAAP EPS of $2.91, missing estimates, and revenue of $887.67 million. The company updated its 2024 guidance, lowering its net sales and operating income projections, which contributed to a 1.86% drop in shares.
Snap (SNAP) shares rose 4% after announcing Q3 results that exceeded expectations. The company reported a 15.1% year-over-year increase in revenue to $1.37 billion, with daily active users growing by 9%. The positive momentum in user engagement and content viewing contributed to the upbeat market response.
Summary
We have some big tech earnings coming today (30 Oct), $Meta Platforms, Inc.(META)$ $Microsoft(MSFT)$ , these two names might moved the market into positive bias, if the sentiment before its result is positive.
I would be watching closely the price action of these stocks to see if there is any opportunity we can take.
Appreciate if you could share your thoughts in the comment section whether you think market could give us a positive bias with big tech earnings.
@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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