July 24th Market Overview

July 24th Market Overview (no fluff)

J.L. Bernstein
July 24, 2024

Happy Wednesday, nasty day in the markets…

Lets dig in…

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

DJIA: -1.08%
SPX: -2.15%
NASDAQ: -3.39%
Broad market sentiment remains bearish, influenced primarily by disappointing earnings releases from major tech.

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.

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.

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.

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.

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.

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

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.