Market Update: Earnings Season Kicks Off Amid Mixed Sentiment
U.S. stock futures fluctuated near the flatline on Monday as investors braced for a busy week of corporate earnings reports. Wall Street just wrapped up its sixth consecutive week of gains, with both the Dow Jones Industrial Average and the S&P 500 closing at record highs last Friday. Much of this momentum came from strong performances in major tech stocks.
Netflix (NASDAQ: NFLX) surged after exceeding expectations with better-than-anticipated subscriber growth and a positive outlook for the remainder of its fiscal year. Meanwhile, Apple (NASDAQ: AAPL) climbed on data showing increased sales of its iPhone in China, and Nvidia (NASDAQ: NVDA) edged higher following an upgrade in its stock price target by Bank of America Global Research.
Despite these gains, uncertainty persists due to high stock valuations and the looming U.S. presidential election in November, leaving investors cautious.
Major Earnings Ahead: Tesla to Report
As earnings season kicks into gear, Tesla (NASDAQ: TSLA) will be a key focus with its quarterly results due on Wednesday after the market closes. Tesla’s shares have struggled recently, down 11% year-to-date, particularly after the unveiling of its robotaxi service, which investors found lacking in concrete details. In comparison, the S&P 500 has gained 22.5% over the same period. Alongside Tesla, semiconductor firms Texas Instruments and Lam Research (NASDAQ: LRCX) are also set to report following a turbulent week in the chipmaking sector.
ASML (AS: ASML), Europe’s largest tech firm, recently issued disappointing 2025 sales projections, sending shockwaves through the sector. However, the industry rebounded when Taiwan Semiconductor Manufacturing Co. (NYSE: TSM) posted better-than-expected quarterly earnings, driven by demand for advanced AI chips.
Activist Investor Starboard Targets Kenvue
In corporate news, activist hedge fund Starboard Value has taken a stake in Kenvue, the consumer products company known for brands like Band-Aid and Listerine. Kenvue, which spun off from Johnson & Johnson last year, has struggled since going public, with its stock down 18%. Starboard is reportedly aiming to influence how Kenvue markets and prices its products. Although the size of Starboard’s stake remains undisclosed, Chief Investment Officer Jeffrey Smith is expected to present new ideas at an investor summit later this week.
China’s Central Bank Cuts Lending Rates
In global news, the People’s Bank of China (PBOC) reduced its benchmark loan prime rate (LPR) by 25 basis points on Monday to stimulate growth in the world’s second-largest economy. The one-year LPR was cut to 3.10%, and the five-year LPR, which affects mortgage rates, was lowered to 3.60%. This is part of a series of efforts by Chinese authorities to boost economic activity, although investor confidence remains lukewarm due to concerns about the scale and timing of these measures.
Oil Prices Stabilize After Sharp Decline
Oil prices steadied on Monday after last week’s sharp declines, which were driven by concerns over slowing demand, particularly from China. Brent crude dropped more than 7% last week, while WTI saw an 8% decline. However, Monday’s rate cuts by the PBOC offered a slight lift in sentiment. Meanwhile, tensions in the Middle East continue to cast a shadow over oil markets, as Israel intensifies its operations against Hamas and Hezbollah, and may retaliate against Iran following an early-October strike.
As the week unfolds, earnings results, geopolitical tensions, and U.S. election uncertainty will likely drive market movement. Stay tuned for more updates as corporate earnings reports roll in.
PYT Stocks Covered
DG-
ER 11/28
Overall Bearish
No Support
$82 then $87 Next Resistances
SNOW-
ER 11/20
Short Term Bullsh but Bearish all other time frames
$118.50 Support / $121.55 Resistance
Last Candle was Bullish Harami
PSTG-
ER 11/27
Sort Term and Mid Term Bullish
$54.45 Support/ $59.60 Resistance
LLY-
ER 10/30
Neutral All Timeframes
$907 Support/ $931.80 Resistance
EMA Bullish on all but rest of indicators mixed
MSFT-
ER 10/30
Neutral All Timeframes
$415 Support / $418.25 Resistance
BA-
ER 10/23
Bearish all Timeframes
$153.45 Support/ $156.20 Resistance
Last Candle was Bearish Engulfing
NQ- Last week we mentioned “the main focus will be whether buyers can show a continuation move up and through the 20500/530 level of interest, which marks the high of the intermediate-term structure. If buyers can trigger a breakout and show acceptance above 20500, price can target 20800, 21000, and the all-time high near 21200.”
On Monday, buyers successfully triggered the break of of the 20500 resistance zone, and by Tuesday, price was right back into that range following the failed breakout, marking a weekly low near 20200. This means that price only traded 63% of its usual weekly range – A very slow week.
For the 3rd consecutive week, the main focus will continue to be how price trades versus the 20500/20530 key resistance zone. With price churning through an 8-day range, the next expansion move will be coming soon. If buyers can show acceptance above the 20500/530 area of resistance, price can target 20800, 21000, and the all-time high near 21200. If sellers continue to defend the 20500/530 zone, price can retest 20255, 19850 (intermediate-term higher-low), and 19550 where buyers can be expected to step in.
See you all in chat OP
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