24 Oct Market Positive Bias Due to Buy-The-Dip action Catalyst By Tesla Surge
After we have seen the market start off with a soft performance, most of the stocks closes higher. Positive bias was experienced throughout the session which was helped by the buy-the-dip action.
This action was driven by surging shares of $Tesla Motors(TSLA)$ following impressive Q3 earnings and a 2025 vehicle growth estimate. The upward trend was also supported by the drop in market rates.
S&P 500 closed 0.21% higher but remains 0.9% lower since last Friday. NASDAQ went up by 0.76% but still down by 0.4% for this week.
DJIA was the underperformer after went down by 0.33% due to losses in IBM (IBM), Honeywell (HON), and Boeing (BA).
IBM and Honeywell reported earnings results, while Boeing saw a decline as workers voted 64% against accepting the latest contract proposal.
We saw the initial claims data suggest a labor market that remains robust, far from recession-like conditions, despite potential noise from hurricane effects. Weekly Initial Claims was 227K compared to consensus at 246K while previous was revised to 242K from 241K. Weekly Continuing Claims came in at 1.897 million while previous was revised to 1.869 million from 1.867 million.
S&P Global US Manufacturing PMI - Prelim came in higher at 47.8 compared to previous of 47.3. S&P Global US Services PMI - Prelim was higher 55.3 compared to previous at 55.2.
The new home sales likely benefited from a drop in mortgage rates in September, but higher rates now may negatively impact October sales with New Home Sales reached 738K compared to consensus at 713K) while previous was revised to 709K from 716K.
S&P 500 Consumer Discretionary Sector Top The Group
The S&P 500 Consumer Discretionary sector was a top performer, jumping 3.24% thanks to Tesla (TSLA). Communication Services came in second with help from Amazon (AMZN). Conversely, the materials sector recorded the largest decline, down 1.42% from the previous day.
Lower Note Yield Helped In Upward Trend
A drop in market rates supported the upward trend, with the 2-year yield settling eleven basis points lower at 4.081% and the 10-year yield eleven basis points lower at 4.206%.
Stocks To Watch
Tesla (TSLA) saw a remarkable 22% increase in its stock price, driven by strong Q3 earnings. The electric vehicle company surpassed expectations with an automotive ex-credits gross margin of 17.1% and an operating margin of 10.8%. This surge made Tesla the 12th most valuable company in the U.S., surpassing the likes of Broadcom (AVGO) and Walmart (WMT).
Exxon Mobil (XOM) and Qatar Energy received a three-year extension for their Golden Pass LNG project in Texas due to delays from their lead contractor's bankruptcy. The extension aims to keep the project on track as negotiations with McDermott International (MCDIF) continue for a new contractor.
$BlackRock(BLK)$ launched three new ETFs to help investors diversify their portfolios amid concerns over the dominance of megacap tech stocks. The ETFs aim to provide exposure to large U.S. companies while also offering options to avoid them, reflecting a shift in investor sentiment as market dynamics evolve.
$Western Digital(WDC)$ reported Q1 earnings with a Non-GAAP EPS of $1.78, surpassing expectations by $0.07. The company continues to navigate a challenging market environment with strategic adjustments as it plans for future growth.
$Amazon.com(AMZN)$ earnings for the third quarter should be seeing it expanding its operating profit margin in the retail segment, it could be possible for the margin to go 10% and beyond. Another revenue contributor is the Amazon Web Services (AWS). The cloud computing leader brings in close to $100 billion in annual revenue and sports high profit margins (33.4% over the last 12 months). We should be seeing AWS to benefit from the boom in artificial intelligence (AI), considering the marketplace offerings and how software providers are turning to cloud infrastructure companies such as AWS to power their products.
I am holding onto my position for AMZN before its earnings, as I am expecting a nice surge on this upcoming earnings. From the technical, MACD is forming a potential bullish MACD crossover, and MTF is also giving uptrend signal, so we will need to watch closely next week where we will have big names earnings.
Summary
I think that we could be seeing the market continued with positive bias as the earnings from another semiconductor name, WDC should help to push the sector, together with the Tesla earnings, I expect the buy-the-dip action to continue strongly.
Appreciate if you could share your thoughts in the comment section whether you think market would continued with positive bias and end the week on a positive note.
@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.
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