Thursday, October 31, 2024
We thought it was safe to call today’s trading session in the pre-market hours “un-spooky” for Halloween. This was based on calm PCE data for September, lower-than-expected jobless claims and Q3 earnings reports that were mostly better than expected.
So what happened? Our best guess is re-pricing, based on what we know from the economy as opposed to what we don’t know. At the beginning of this trading week, we didn’t know much compared to what we know now.
These include a Q3 earnings season that, by any measure, has been pretty good. Yes, companies are now beating their own lowered guidance from the last month or so, but that’s not across the board. The consumer has done his or her part in all this; the economy is not so bleak.
That said, this muddies up the waters a bit concerning interest rate moves from the Fed (due a week from today) and a pending General Election Tuesday (the results of which we may not know until a week from now or later). As a result, market uncertainty has crept back into market sentiment, and those recent all-time-high closes may for now be a thing of the past.
The Dow closed down -378 points or -0.90% on the session. The S&P 500 dropped -108 points, -1.86%, while the Nasdaq drained -512 points on the day, -2.76% — its worst single day of trading for quite some time. The small-cap Russell 2000 fell -1.63% on the day.
Apple AAPL shares are down -1% on its Q4 earnings release after the closing bell today. Earnings of 97 cents per share were well off the $1.49 per share consensus, but that was due to a one-time issue of having to pay bank taxes to Ireland — otherwise Apple would have had a bottom-line beat. Revenues of $94.9 billion in the quarter stepped ahead of the $94.56 billion in the Zacks consensus.
This is only Apple’s second miss on earnings in the past five years. iPhone sales in the quarter improved over expectations to $46.2 billion, while both Services and China ratcheted downward from estimates to $24.9 billion and $15 billion, respectively. Also, Apple is most certainly a company with a lot to lose if things continue to go south on China.
Check out the updated Zacks Earnings Calendar here.
Shares of Amazon AMZN took a step higher in after-hours trading, with earnings of $1.43 per share amounting to a +25.4% positive earnings surprise over the $1.14 expected and 85 cents per share posted in the year-ago quarter. Revenues of $158.9 billion outpaced the $157.07 billion in the Zacks consenus, and gained +11% year over year.
North American business grew by +9% in the quarter, while International was up +12%. Amazon Web Services (AWS) grew by +19% in the quarter, year over year. Next quarter revenue guidance was between a wide range in which the Zacks estimate still resides. Amazon shares are up +4% on the news, adding to its +24% growth year to date.
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