Economy

Stocks bounce back as earnings from big tech companies emerge

April 22, 2024
Izer

US stocks appeared to be rebounding on Monday from their worst week of the year as investors braced for a deluge of corporate earnings.

The S&P 500 (^GSPC) rose 0.5% after closing below the 5,000 level on Friday for the first time since February amid six straight days of losses. The Dow Jones Industrial Average (^DJI) rose 0.3%, while the Nasdaq Composite (^IXIC) rose 0.5%.

After the recent blow it suffered, the market's rise has fallen to its weakest point in months, and this week will be crucial to determine whether the malaise will continue.

Technology stocks are looking to rebound after lackluster earnings from Netflix (NFLX) dampened a broader market already grappling with geopolitical tensions. Fading opportunities for interest rate cuts have increased doubts that major companies can continue to carry out the gains.

Hopes now rest on big tech earnings later in the week to reassure and reignite the market. On deck are quarterly reports from Meta (META), Microsoft (MSFT), and Alphabet (GOOG).

Monday's focus is on Tesla (TSLA) as the electric car maker cuts prices in the US, China and several other countries. Tesla will announce its quarterly results on Tuesday after the market closes. The Elon Musk-led company has already spooked some investors with its push for robotaxis and its decision to have shareholders vote again on Musk's rejected pay package. Shares fell as much as 4% on Monday.

Meanwhile, debate continued over the Federal Reserve's stance on interest rate cuts after Chairman Jerome Powell and fellow policymakers became more hawkish last week in the face of persistent inflation. Given that, minds are already turning to Friday's release of the personal consumption expenditures index — the Fed's preferred measure of inflation — as crucial to assessing whether interest rates will stay higher for longer.

He lives7 updates

  • Trend indicators on Monday

    Tesla (TSLA)

    Tesla shares fell as much as 4% on Monday after the electric car maker cut the price of its vehicles in China amid an ongoing industry price war.

    Chinese automakers offer what some refer to as more affordable options on average than their American counterparts.

    verizon (VZ)

    Telecom giant Verizon reported mixed first-quarter earnings results while reaffirming its full-year guidance.

    The company posted a smaller-than-expected loss in postpaid phone connections. Verizon reported a loss of 68,000 postpaid phone subscribers during the quarter, exceeding the 100,000 subscriber loss analysts had expected.

    Verizon shares fell as much as 4%, reversing earlier opening gains.

    Sales force (customer relationship management)

    Shares of Salesforce (CRM) rose Monday after Informatica (INFA) announced it is not in talks to be acquired by the cloud software company. Informatica was responding to a Wall Street Journal report that said Salesforce was in talks to buy the data development company for roughly $10 billion.

    “Although it is Informatica's policy not to comment on market rumors or media speculation, the company has announced that it is not currently engaged in any acquisition discussions,” the company said in a statement Monday morning ahead of its earnings report next week.

    Informatica shares fell as much as 8%.

  • The bipartisan concern that unites Washington: cheap Chinese goods

    Ben Warschkul from Yahoo Finance reports:

    For all the differences between Joe Biden and Donald Trump, they share bipartisan concerns about China flooding global markets with cheap goods.

    President Biden's recent call to triple tariffs on Chinese steel was just the latest example of how voters will have a choice this fall of one degree rather than changes in direction when it comes to Chinese trade.

    Both camps are lining up behind increasingly protectionist plans.

    Biden calls for increasing tariffs on selected Chinese sectors. Trump wants 60% tariffs across the board. Biden is looking to “de-risk” the relationship with China, while Trump talks about “decoupling” the world's two largest economies.

    Much of the reason why the United States is focusing on this issue is of course due to the ongoing discussion surrounding the proposed $14 billion sale of US Steel (X) to Japanese giant Nippon Steel. Both Biden and Trump oppose the deal and it is another front where the usual partisan coalitions have clashed.

    Read more here.

  • Nasdaq embraces flat line as big tech stocks vary

    The Nasdaq Composite (^IXIC) briefly dipped below the flat line on Monday after rising as much as 0.9% earlier in the session.

    The tech-heavy index attempted to rebound after falling more than 2% on Friday. Nvidia (NVDA) shares pared earlier gains to rise more than 1.5%. AI darling stock fell 10% on Friday.

    Tesla (TSLA) shares fell more than 4% after the electric car maker cut the price of its cars in China. Tesla will report earnings on Tuesday after the closing bell. Monday marked the seventh straight session of declines for Tesla.

    Shares of Meta (META) fell more than 1% as investors await the social media giant's earnings announcement later this week. Shares of software giant Microsoft (MSFT) also fell slightly.

    Shares of Amazon (AMZN), Alphabet (GOOGL), and Apple (AAPL) rose slightly.

  • Gold fell 2% as fears of the broader conflict in the Middle East eased

    Gold (GC=F) fell more than 2% amid easing fears of a wider war in the Middle East.

    “The gold market witnessed a strong decline today, with fears surrounding a broader conflict in the Middle East subsiding, reducing the need for investors to look to safe-haven assets such as gold,” said George Khoury, global head of education and research at CFI. Monday.

    “However, geopolitical concerns could remain an important driving force for gold,” he added.

    Last week, Israel struck Iran in response to Tehran's attack on Israeli government targets. Both appear to have been contained with limited damage.

    Gold has risen for five straight weeks and reached all-time highs above $2,400 an ounce in April.

    Futures on Monday ranged around $2,350 an ounce.

  • Nvidia stock rebounds 3% and Tesla shares continue to decline

    Nvidia (NVDA) shares led a rebound in big tech stocks on Monday as the broader market tried to recover from last week's losses.

    Nvidia stock rose more than 3% after a 10% drop on Friday when a sell-off in technology stocks led to sharp declines in the Nasdaq Composite (^IXIC) and S&P 500 (^GSPC).

    On Monday, the S&P 500 rose 0.5% in an attempt to halt a six-day losing streak.

    Meanwhile, Tesla (TSLA) shares were down nearly 2% at around 10 a.m. EST as investors reacted to the electric car maker's price cuts on its vehicles in China. Monday marked the seventh straight session of declines for Tesla.

  • Stocks are trying to recover as big tech companies' future earnings emerge

    Stocks opened higher on Monday, after their worst week of the year, as investors awaited a deluge of earnings.

    The S&P 500 (^GSPC) rose 0.5%, rising again above the 5,000 level. The Dow Jones Industrial Average (^DJI) rose 0.5%, while the Nasdaq Composite (^IXIC) rose 0.6%.

    Tech stocks look to rebound from Friday's sharp decline in reaction to lackluster earnings from Netflix (NFLX) and a 10% drop in AI darling Nvidia (NVDA) shares.

    The focus Monday is on Tesla (TSLA) as the electric car maker said it has cut prices in the United States, China and several other countries. Shares of the electric car maker fell more than 4% in early trading. Tesla will announce its quarterly results on Tuesday after the market closes.

    Other quarterly results expected this week include Meta (META), Microsoft (MSFT), and Alphabet (GOOG).

  • Reminder on Nvidia after Friday's beating

    Tough session for Nvidia (NVDA) on Friday – shares lose 10%!

    The stock is now down 25% from its March 25 highs.

    Who knows if this is the bottom, as the entire AI trade is under pressure amid more cautious sentiment.

    But what I do know is that Nvidia is fundamentally strong and will likely be defended on the Street soon due to the sell-off.

    Good point here from Mark Lipacis of Evercore ISI in a new note confirming this point:

    “We believe investors are underestimating 1) the importance of the chip+hardware+software ecosystem that Nvidia has created, and 2) that computing eras last 15-20 years and are typically dominated by a single vertically integrated ecosystem company, whose returns are measured at $100-to- 1000 bands to fill.

    And another good point about the Nvidia sell-off from Freedom Capital's chief global strategist Jay Woods when the show opened this morning (episode below):

    “These things happen, and people get emotional about this stock — but I think this is a great opportunity for those who have been waiting for that dip in the stock that keeps crushing it every earnings cycle and in the hotter space to dip their toe into the market. Water.”

    Watch the new podcast from Yahoo Finance, Open the bidMondays and Fridays at 8 a.m. ET on Yahoo Finance, YouTube, and the podcast platforms Spotify and Apple Music.

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