Last Night's Market Recap
Overnight – Nasdaq slumps to its worst day since February, dragging equities to 4-month lows
Big tech led the market lower overnight, pressured by rising Treasury yields and Alphabet-led weakness in tech following disappointing quarterly results in its cloud business.
The recent string of strong economic numbers in the US is causing headaches for the Federal reserve, forcing their hand to raise rates or risk another wave of inflation. This saw treasury yields push back towards the 5% mark, after 2 days of respite from the recent rally.
In big tech, Microsoft was the only shining light in the tech sector, up 3% on yesterday’s positive earnings result, Alphabet (GOOG) fell 10% despite a better then expected headline result as cloud volumes disappointed investors.
Todays close in the S&P500 notches a fifth daily decline in six sessions, closing below the key 4,200 level. The Nasdaq slumped to 4-month lows, having its biggest single-session percentage drop since February, breaking the key 14,500 level, also the 200ma
Investors are finally realizing the lofty valuations for the “magnificent 7” combined with high bond yields make the chance of a “bull run” from here very difficult. A significant breakdown from these prices is possible and caution is warranted
Earnings Results
Meta Platforms (META) – rose more than 4% in afterhours trading as third-quarter results that topped Wall Street expectations and stronger guidance for the current quarter as cost cuts boosted margins. Advertising revenue jumped 23% to $33.64B from $27.24B. Facebook daily active users, or DAUs, rose 7% to 3.14B, while monthly active people, or MAUs, rose 3% to 3.05B. Looking ahead, the company said it expects third quarter revenue to be in the range of $36.5B to $40B, beating estimates for $38.84B.
IBM (IBM) – Shares rose 2% after beating expectations on profit for the third quarter and reaffirming its outlook. Software revenue, which includes its artificial intelligence platform, rose 8%, consulting revenue rose 6%, and infrastructure revenue fell 2%
Boeing (BA) – fell more than 2% after the aircraft maker reported a wider than expected loss and cut its annual guidance on 737 Max deliveries amid a manufacturing problem with the aircraft.
S&P 500 - Heatmap
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The Day Ahead
ASX SPI 6810 (-0.05%)
The ASX are poised to open flat on the last day of trading this week, after a late dip on Wall Street as the latest GDP report showed the US economy is still running hot. Tech stocks will be in focus this morning, after a slide in US tech giants sent the S&P 500 to its lowest point since May. Later today, PPI figures will be released by the Australian Bureau of Statistics, shedding more light on the state of inflation.
Australia’s largest white goods and home retailer Harvey Norman has taken a major hit to its profit and revenue in the most recent quarter
ResMed has reported growing revenues in its first quarter report, but costs have squeezed the health tech’s margin’s tighter. Revenue increased by 16 per cent to $US1.1 billion ($A1.74 billion) in the three months to September 30, compared to last year’s same quarter. However, the company’s gross margin contracted 250 basis points to 54.4 per cent. The company attributed to margin squeeze to costs
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US Quarterly Earnings
