Dow Jones Futures: Microsoft, Google, AMD to Announce Earnings, Elon Musk Loses $56 Billion Pay Plan
On the early morning of Wednesday, the Dow Jones futures saw a slight increase, while S&P 500 and Nasdaq futures experienced a decline. This was amidst a backdrop of earnings reports from prominent companies such as Microsoft, Alphabet (the parent company of Google), and Advanced Micro Devices. Meanwhile, Tesla saw a significant drop in stock value after a judge voided CEO Elon Musk’s $56 billion stock compensation plan.
Investors are eagerly awaiting the Federal Reserve meeting announcement on Wednesday afternoon, as they search for clues about when interest rate cuts may begin. The Fed meeting and the words of Fed Chair Jerome Powell will be closely watched, as investors try to gauge the central bank’s stance on monetary policy. Meanwhile, the stock market had a mixed day on Tuesday, with the Dow rising but tech stocks seeing profit taking ahead of major earnings.
Apple made a bearish move ahead of its earnings report later this week, while Microsoft, AMD, and Google saw declines in their stock prices following their respective earnings reports. The hotter-than-expected job openings data may also be a concern for Fed policymakers, as it could signal a stronger economy that may not need rate cuts to support it. The performance of these tech stocks and the overall market rally will be closely watched, as it could provide insight into the health of the economy and the Fed’s next moves.
On Wednesday, several major companies, including Meta Platforms, Nvidia, Amazon.com, and Arista Networks, experienced a slight retreat in their stock prices. However, investors are eagerly awaiting the release of stock reports from these companies in the coming days. Novo Nordisk, a weight-loss drug giant, reported early Wednesday, with minimal changes in its stock price. Meanwhile, Dow giant Boeing is set to release its report before the opening bell.
Of note, Meta, Nvidia, and Novo Nordisk are all currently listed on the IBD Leaderboard, while Nvidia is also on SwingTrader and MSFT is on the IBD Long-Term Leaders. Additionally, Meta, Nvidia, Google, Microsoft, and Novo Nordisk are all included in the IBD 50, while Google and Nvidia are also part of the IBD Big Cap 20.
In terms of market performance, Dow Jones futures inched up by 0.1% compared to fair value, while S&P 500 and Nasdaq 100 futures experienced more significant declines of 0.5% and 1.1%, respectively. Microsoft, a major player in all three indexes, is also a significant weight in the S&P 500 and Nasdaq. Meanwhile, the 10-year Treasury yield dipped to 4.02%.
First off, crude oil futures took a tumble of around 1% yesterday. 😕 That’s right, folks, oil prices dipped a bit as investors seemed to be taking a breather after some recent gains. 💪
But wait, there’s more! China’s official manufacturing index edged up to 49.2 in January, which is pretty much in line with what analysts were expecting. 🤔 Now, you might be wondering what that means… well, readings below 50 signal contraction in the manufacturing sector, so this is a bit of a mixed bag. 🤷♂️
On the other hand, the non-manufacturing index (which includes stuff like services and construction) rose 0.3 points to 50.7. That’s a pretty decent gain, if I do say so myself! 💪
Moving on to the stock market, things were a bit mixed yesterday. 🤔 The Dow Jones Industrial Average rose 0.35%, but the S&P 500 index edged lower, and the Nasdaq composite sank 0.75%. 📉
Now, here’s where things get interesting… small-cap stocks took a breather after Monday’s big jump, with the Russell 2000 falling 0.9%. 😔 But hey, at least it was an inside day, right? 🤷♂️
Oh, and oil and gasoline producers like Exxon Mobil and Marathon Petroleum were up, while drilling, machinery, and services firms like Weatherford International and Tidewater were down. 💪🏼🚧
Finally, bond yields were doing their thing yesterday too. 🤔 The 10-year Treasury yield fell 3 basis points to 4.06%, while the two-year Treasury yield (which is more closely tied to Fed policy) rose four basis points to 4.36%.
In the world of exchange-traded funds (ETFs), several notable declines were seen among growth-focused funds. The iShares Expanded Tech-Software Sector ETF dipped 0.45%, with Microsoft stock being a significant component. The VanEck Vectors Semiconductor ETF also fell 1%, with Nvidia as the top holding and AMD stock being another major weight.
Meanwhile, more speculative story stocks saw larger declines, with the ARK Innovation ETF retreating 2.6% and the ARK Genomics ETF slumping 3.85%. Tesla stock remains a major holding across Ark Invest’s ETFs.
In the metals and mining space, the SPDR S&P Metals & Mining ETF rose 0.5%. However, the U.S. Global Jets ETF declined 1.5%, while the SPDR S&P Homebuilders ETF edged up 0.1%. The Energy Select SPDR ETF rose 1%, and the Health Care Select Sector SPDR Fund inched up 0.2%.
The Industrial Select Sector SPDR Fund was close to flat, while the Financial Select SPDR ETF gained 1.3%.
It’s important to keep an eye on these developments and adjust your investment strategy accordingly using IBD’s ETF Market Strategy.
Microsoft’s stock saw a minor decline overnight, falling 0.3% to $408.59, despite beating quarterly earnings expectations and providing upbeat guidance. Azure revenue grew a impressive 30%, exceeding forecasts, and picking up from the previous quarter’s 29% growth. Despite this strong performance, the stock edged lower, with analysts suggesting that the shares are extended from a buy zone. Microsoft’s market cap now stands at a whopping $3.04 trillion, with Apple’s stock lagging behind at $2.92 trillion.
Meanwhile, Google’s stock took a hit, declining 1.3% to $151.46, despite beating earnings expectations. However, online advertising growth fell short of expectations, which led to a broader sell-off in the stock. Google Cloud topped views, but the overall impact of the earnings was not enough to offset the disappointment in online advertising. The stock is now greatly extended from a buy zone.
AMD’s stock saw a steep decline, falling 3.2% to $172, following a mixed earnings report. While the company’s revenue slightly beat expectations, its guidance for the current quarter was weak. The stock is now greatly extended from a buy zone, and an analyst even downgraded the chipmaker just ahead of earnings.
In other tech news, NVDA stock fell modestly in after-hours trading, along with Meta and Amazon. Arista Networks, which counts Microsoft and Meta as its two biggest customers, also saw a decline. However, there were some bright spots, such as Manhattan Associates, which jumped on earnings, signaling a breakout for the supply-chain management software maker. Medical products maker Stryker moved out of a buy zone on its results, and Powell Industries skyrocketed out of a base on blowout earnings.
Overall, the tech sector saw a mixed bag of results, with some companies exceeding expectations and others falling short. The impact of these earnings on the sector’s overall performance will be closely watched in the coming days.
a new batch of earnings reports! And what a treat we have in store for us today! 😍 Novo Nordisk, the Danish weight-loss drug giant, has just released its earnings, and guess what? They’re above forecasts! 🎉 Can you hear the excitement in my voice? 😆 The company is predicting some serious growth in 2024, so investors are definitely sitting up and taking notice. 💡 NVO stock was practically unchanged before the bell, after closing flat the day before at 109.02. It’s like it’s just waiting for that perfect buy signal! 🔥
But wait, there’s more! 🤔 Tomorrow, Boeing will be releasing its earnings, and let me tell you, investors are on edge. 😨 The 737 Max 9 woes have had a serious impact on BA stock, which fell a whopping 2.3% to 200.44 on Tuesday. That’s a 23% decline so far this year, ouch! 🤦♂️ So, the question on everyone’s mind is, how will Boeing bounce back from this? 💪 Will they be able to turn things around and regain investor confidence? Only time will tell! 🕰️ Stay tuned! 📱
Elon Musk’s $56 billion compensation plan was just voided by a Delaware judge, siding with plaintiffs who claim that Tesla’s board acted improperly in setting the pay deal. Musk had been demanding a significant increase in voting power not too long ago, and if he didn’t get his way, he threatened to take his AI and robotics technology to another company. The board could potentially create a new pay plan for Musk, but Tesla’s unprecedented 2018 pay package already made Musk the richest man in the world.
Tesla stock dipped slightly in early trading on Wednesday, after shares edged up 0.35% on Tuesday. Ark Invest, an investment firm led by Cathie Wood, continued to buy Tesla stock for the fourth day in a row, adding 26,824 shares on Tuesday. This follows their previous purchases of 14,598 shares on Monday and 360,411 shares in Thursday-Friday. Despite the recent volatility, TSLA stock hit an eight-month low of 182.63 on January 25th, but has since recovered slightly.
Apple Stock
Apple stock fell 1.9% to 187.54, its fifth straight loss and breaking below the 50-day moving average. Further, the relative strength line undercut recent lows to hit its worst level since early March, reflecting AAPL stock’s underperformance vs. the S&P 500 index.
Apple fell as an analyst forecast a significant decline in iPhone sales, following several other analysts worried about that possibility.
The Dow Jones tech titan reports Thursday evening.
AAPL stock edged lower early Wednesday.
Fed Rate Cuts: Is The S&P 500 About To Party Like It’s 1999 Again?
The market rally is acting well, but is in the midst of the busiest week for news in months. So investors may want to be cautious about new buys to see how the dust settles.
Consider taking some profits as earnings loom, or just to rein in exposure.
But this week could generate some new setups and buying opportunities. So have your watchlists up to date. Stay engaged and remain flexible.