July 24th Market Overview

July 24th Market Overview (no fluff)

Author

J.L. Bernstein
July 24, 2024

Happy Wednesday, nasty day in the markets…

Lets dig in…

Executive Summary

  • Major indices faced declines, with the Nasdaq Composite falling 3.39%, dragged down by disappointing earnings from giants Tesla and Alphabet.

  • Tesla’s shares dropped 11% after missing profit expectations for the second consecutive quarter, while Alphabet’s stock fell 5% despite exceeding revenue forecasts.

  • Strong performances in the telecom were overshadowed by volatility driven by earnings reactions, particularly in the tech space.

  • Analysts are cautious, suggesting potential buys on dips, yet warning of bear market-like positioning.

  • Semi-conductor names are getting obliterated today plain and simple

Market Overview

  • DJIA: -1.08%

  • SPX: -2.15%

  • NASDAQ: -3.39%

  • Broad market sentiment remains bearish, influenced primarily by disappointing earnings releases from major tech.

Key Market Drivers

  • Earnings Reports: Tesla’s earnings fell short of expectations, reflecting weakened margins and profits. Shares plummeted, impacting the EV sector broadly, including Rivian and Lucid.

  • Alphabet: Although GOOGL beat earnings and revenue estimates, slower growth in ad sales and a hold on spending projections created investor caution.

  • Consumer Trends: Preliminary second-quarter GDP shows growth, but signs of fragile consumer spending raise concerns over sustainability.

Stock Spotlight

  • Tesla (TSLA): -11.29% after reporting adjusted earnings of 52 cents; analysts have mixed reactions, with target prices ranging widely based on growth potential and margins.

  • Alphabet (GOOGL): -5.19%; cloud revenue surpasses $10 billion yet shows signs of slowing ad growth.

  • Enphase Energy (ENPH): +13.47%; despite missing earnings estimates, strong revenue expectations for Q3 buoyed investor sentiment.

  • Lamb Weston (LW): -27.56%; significant earnings misses lead to severe stock declines, as CEO cautions on market conditions.

  • AT&T (T): +4.97%; better-than-expected net phone subscriber additions garnered positive trading volume.

Other Magnificent 7 Updates

  • Nvidia (NVDA): -6.19% decline following Alphabet’s earnings report; amidst bearish positioning, critical support levels are closely monitored.

  • AMC Entertainment (AMC): -7.58%; guidance shifts suggest looming losses due to industry strikes, impacting theatrical releases.

Other Notable Company News

  • Delta Air Lines faces significant financial impacts from an IT outage costing roughly $350 million due to flight cancellations.

  • Microsoft and Intel also saw notable losses contributing to the market downturn, alongside Visa and Apple, reflecting broader tech under performance.

Sector Watch

  • Technology: Under pressure, largely from disappointing earnings. Analysts caution about bearish flows and market positioning.

  • Telecommunications: Showed resilience with AT&T’s strong subscriber growth, countering tech sector weaknesses.

  • Consumer & Discretionary: Mixed signals as consumer spending data suggests stagnation and potential slowdown in economic momentum.

Bond Market

  • Treasury yields are likely to reflect ongoing market uncertainty and volatility as investors seek safe havens amidst equities drawdown.

Policy Watch

  • Focus shifts to the upcoming second-quarter GDP report, anticipated to show growth despite concerns over underlying stability and consumer spending sustainability.

  • Market participants await macro-economic indicators, with attention on the inflation trend and consumer sentiment affecting fiscal and monetary policy outlooks.



    Stay diligent, cash is a position

    - JB

Note: This newsletter is intended for informational purposes only.