To The Moon

We saw the stock market experienced yet another mixed day, with major indices recovering from significant early losses to close with only modest declines.

At the start, the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average saw drops of 1.6%, 2.3%, and 1.8% respectively, but ended the day with losses ranging from 0.5% to 1.0%. Investors are influenced by the negative earnings reactions for key companies and concerns over economic growth and Federal Reserve rate policies, this has in turn caused the early downturn. One of the big name is META.

What Moves The Market? Sectors Managing Gains

The negative earnings reports from Meta Platforms, IBM, and Caterpillar significantly impacted the market. We also saw economic reports that show weaker growth slows to 1.6% while inflation stays firm. This is supported by strong labor market data which lead to a spike in yields. The $44 billion 7-year note sale saw strong demand, helping to stabilize the market.

Despite early declines, several sectors managed to close with gains, we saw Materials up by +0.7%, Energy up by +0.5%, Industrials was up by +0.29%, Utilities up by +0.27%.

Information Technology: +0.15%, with semiconductor stocks showing particular strength, partly due to anticipated benefits from AI investments by Meta.

Ongoing Strength In Labor Market

Today's economic data highlighted ongoing strength in the labor market and presented a mix of weaker growth and higher inflation, hinting at potential stagflation concerns. Notably:

The labor market remains robust, with employers hesitant to cut jobs, reflecting optimism about demand. The Q1 GDP report showed disappointing growth and inflation rates, challenging the Federal Reserve's rate cut considerations.

Key Economic Reports To Watch Today (26 April)

Key economic reports to watch include March Personal Income and Spending, PCE Prices, and the Final April University of Michigan Consumer Sentiment Index. Additionally, international market performances and commodity prices will continue to influence market sentiment.

Stocks To Watch

$Alphabet(GOOGL)$ experienced a significant surge, climbing 12% following its impressive first-quarter earnings report. The tech giant surpassed analyst expectations with a 15% revenue increase, highlighted by a strong performance in YouTube ads and continued momentum in its Cloud segment. CEO Sundar Pichai emphasized the company's robust performance across Search, YouTube, and Cloud, marking the beginning of its "Gemini era."

This is time to look seriously at Alphabet as their position in the AI race and cloud segment should be increasing.

If we look at how the demand for GOOGL is building up prior to its earnings, we could see that investors are still buying and into GOOGL, though the MACD strength might not be strong enough to have a strong surge, but I believe the strength will keep increasing.

$Intel(INTC)$ on the other hand, faced a downturn as its future outlook failed to meet market expectations. Despite reporting better-than-anticipated results for the first quarter, its guidance for the upcoming quarter fell short of analyst predictions, causing shares to drop over 6% in extended trading. This report marks Intel's first under a new reporting structure, with notable growth in its client computing revenue.

Even with a better-than-expected result, Intel still have some issues to make it to the rest of 2024, and we could see that investors are not into Intel as demand is not coming back and we could see that there is a potential of downwards movement.

$Microsoft(MSFT)$ also made headlines with its third-quarter earnings, surpassing expectations with a 17.1% year-on-year revenue increase. The company's performance was driven by growth across its productivity, business processes, and cloud segments, with shares rising 5%. Microsoft's forward-looking guidance is keenly awaited by investors.

Even though we saw that Microsoft has giving a strong earnings, but the investors demand is not there, Microsoft have actually selling strength increasing prior to its earnings, if this could change today (26 April),

This might be an opportunity to trade in.

Summary

With the weak earnings from Meta, IBM and Intel, the market might be able to pick up with strong earnings from 2 big tech names: Alphabet and Microsoft. They have beaten the estimates on the earnings and their forward-looking guidance have been cheered by investors.

One common thing I observed is the cloud segment, both Alphabet and Microsoft have benefit from the growth, and this should give us an outlook of how 2024 cloud spending should look like. I believe there are more potential on company who are also offering cloud related services.

Today S&P 500 and NASDAQ should see recovery momentum pick up again.

Appreciate if you could share your thoughts in the comment section whether you think recovery momentum would pick up again with Alphabet and Microsoft earnings beat?

@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.