To The Moon

We saw the stock market experienced selling pressure with S&P 500 losing by 0.18% on Monday (21 Oct) after recording six consecutive weeks of gains for the S&P 500,

DJIA also fell by 0.80% despite the index closed at a record high on last Friday (18 Oct). Rising market rates contributed to the selling pressure. Monday's downward trend is partly attributed to normal consolidation activity.

NASDAQ yet outperformed other major indices, rising by 0.27% compared to last Friday's close. This was driven by gains in mega-cap stocks, including $NVIDIA Corp(NVDA)$ gaining 4.14%, Microsoft (MSFT) was up 0.15%, and $Apple(AAPL)$ up by 0.63%.

September Leading Indicators, which decreased by 0.5%, compared to a consensus of -0.3%. The prior figure was revised to -0.3% from -0.2%.

The negative sentiment in equities also reflects a cautious approach ahead of a busy earnings week. Notable companies on the earnings calendar include Tesla (TSLA) , Boeing (BA) , and UPS (UPS).

Ten of 11 S&P 500 sectors Ended In The Red

We saw ten of the 11 S&P 500 sectors declined. Only the information technology sector rose by 0.93%, supported by its heavily-weighted components.

The biggest lagger, real estate sector, sensitive to interest rates, saw the largest decline at 2.08%. Health care sector dropped by 1.19%, affected by a significant decrease in Cigna (CI) shares, which fell by 4.7% following reports of talks to acquire Humana (HUM), which also declined by 2.5%.

Note Yield Mixed With Significant 10-Year Increase

The 10-year yield increased by 124 basis points to 4.206%, while the 2-year yield close flat at 4.042%.

Stocks To Watch

$SAP SE(SAP)$ shares jumped 4% in extended trading following the release of its third-quarter results, which surpassed analyst expectations. The German software giant reported earnings of €1.23 per share, beating the consensus of €1.21, with revenue climbing 9% year-over-year to €8.47 billion. Cloud revenue reached €4.35 billion, contributing to a cloud and software revenue total of €7.43 billion. SAP's current cloud backlog grew by 29% in constant currency to €15.4 billion, and free cash flow surged 44% to €1.25 billion. The company increased its full-year cloud and software revenue guidance midpoint by €400 million.

If we looked at how SAP have been trading, it is trading pretty positively before the earnings release, and with the results beating expectations, we could see further upside.

MACD is showing a move towards a continuous upside, and MTF is also giving a strong uptrend signal with SAP trading above both short-term and long-term MA.

I would think there is more upside trading from SAP today (22 Oct) when market open.

The News Corp's (NWS, NWSA) Wall Street Journal and New York Post have filed a lawsuit against the AI startup Perplexity AI, backed by Nvidia (NVDA), for copyright infringement. The publishers accuse Perplexity of using their content to generate search engine answers without permission, seeking up to $150,000 per infringement. This lawsuit is the latest in a series targeting AI companies for using copyrighted material in model training.

$General Motors(GM)$ declared a quarterly dividend of $0.12 per share, maintaining its forward yield at 0.98%. The dividend is payable on 19 December to shareholders on record as of 06 December.

Whether we are considering GM for long term dividends or short term, both of these looked promising as the MACD and MTF are showing GM is making significant upside movement on its stock price.

With MTF showing strong uptrend and MACD showing upside movement, I believe we can trade this stock for short term and also take advantage of the quarterly dividends.

Summary

I expect the normal consolidation to continue today (22 Oct), but we should see some strength push back from the tech stocks and mega caps. Ahead of some of the big names earnings, we might expect some surprise, so that might help DJIA and S&P 500 index.

Appreciate if you could share your thoughts in the comment section whether you think market would continue the consolidation but reduced selling pressure?

@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.