Equity Indexes Wrap: Tech Leads Indexes Higher
2 hr 43 min ago
The Dow
Salesforce (CRM) led the index higher, rising 2.9%. It was followed by Disney (DIS) and Visa (V), both up 2.2%.
Microsoft (MSFT) added 1.4% ahead of its earnings report after the bell tomorrow.
Verizon (VZ) and Walgreens Boots Alliance (WBA) lagged the index, falling 0.8% and 0.6%, respectively.
Apple (AAPL) fell 0.4%—it will report earnings after the bell Thursday.
The S&P 500
Archer Daniels Midland (ADM) rose 5.5% after the company said an investigation of intersegment sales would delay, but not materially impact, its quarterly earnings report.
Builders FirstSource (BLDR) gained 4.1% after BofA Securities upgraded the stock to buy, citing its potential to benefit from strong single-family housing starts.
Cruise operators outperformed as the world’s largest cruise ship, owned by Royal Caribbean (RCL), set sail from Miami on its maiden voyage. Carnival Corp (CCL) climbed 4.6%, while Royal Caribbean and Norwegian Cruise Line Holdings (NCLH) added 3.2% and 3.1%, respectively.
Amazon (AMZN) rose 1.2% after calling off its $1.4 billion acquisition of Roomba maker iRobot (IRBT), shares of which tumbled 8.8%.
HP Inc. (HPQ) led the index’s laggards, falling 2.6%.
Paper and packaging companies International Paper (IP) and Westrock (WRK) lost 2.3% and 1.4%, respectively.
Shipping and logistics stocks also underperformed, with FedEx (FDX) slipping 1.4% and United Parcel Service (UPS) losing 0.8% ahead of its earnings report tomorrow morning.
The Nasdaq 100
Enterprise software companies led the index higher. MongoDB (MDB) gained 6.3%, while The Trade Desk (TTD) and Datadog (DDOG) added 5.2% and 4%, respectively.
Tesla (TSLA) rose 4.2% after it forecast capital expenditures of more than $10 billion this year as it ramps up manufacturing abilities and invests in autonomy and artificial intelligence projects.
PDD Holdings (PDD) fell 8.2% after Morgan Stanley warned the rapid growth of subsidiary Temu could be “cresting.”
Warner Bros. Discovery (WBD) slipped 1.2% after Well Fargo downgraded the stock, citing near-term earnings pressure and the unlikelihood of an acquisition or merger.
What To Expect From This Earnings Season’s Biggest Week
3 hr 35 min ago
In just 48 hours starting Tuesday afternoon, we’ll get earnings reports from companies representing 24% of the S&P 500’s market capitalization, or about $10.5 trillion, making this the biggest week of the current earnings season.
See below for a breakdown of what companies will report when, and what analysts are expecting from each.
Tuesday:
Pfizer (PFE) will kick things off Tuesday morning. Analysts are expecting the company to report another tough quarter as demand for Covid-19 products remained muted.
United Postal Service (UPS) and Danaher (DHR) will also report before markets open.
Microsoft (MSFT) will release its results after the bell, and is expected to report its highest revenue in nearly two years amid strong demand for its AI-powered cloud services.
Google-parent Alphabet (GOOGL) will also report Tuesday afternoon. The company is forecast to say sales and earnings increased significantly from the prior-year quarter.
Advanced Micro Devices (AMD) reports Tuesday after the bell as well.
Wednesday:
European pharmaceutical giants Novo Nordisk (NVO) and Novartis (NOV) will share their quarterly earnings before the bell.
Dow Jones Industrial Average components Mastercard (MA) and Boeing (BA) will also report on Wednesday morning.
After the bell will be earnings from chipmaker Qualcomm (QCOM) and insurers MetLife (MET) and Aflac (AFL).
Thursday:
Dow components Merck (MRK) and Honeywell (HON) kick things off Thursday morning, along with oil major Shell (SHEL).
After the bell, tech giants worth a combined $5.6 trillion will report: Apple (AAPL), Amazon (AMZN), and Meta (META). Apple, despite all the concern about iPhone sales, is expected to report its first quarter of sales growth in a year. A stabilized digital ad market and cost cuts are expected to help Meta report a surge in revenue and earnings.
SoFi Stock Soars After First Quarterly Profit
4 hr 27 min ago
SoFi Technologies Inc. (SOFI) shares jumped in intraday trading Monday after the online bank and personal finance lender posted its first quarterly profit as sales and membership soared for the fourth quarter.
The California-based bank reported fourth-quarter net income of $47.9 million, or 2 cents per share. Revenue jumped 34% from the prior-year quarter to a record $594.25 million. Both results exceeded forecasts.
Chief Executive Officer (CEO) Anthony Noto pointed out that 40% of adjusted net revenue was generated by non-lending segments (Technology Platform and Financial Services segments). Lending also rose for SoFi, with personal, student, and home loan origination volumes up 31%, 95%, and 193% from a year ago, respectively.
SoFi shares were up 19.4% to $9.09 per share as of about 1:45 p.m. ET Monday, and have climbed about 36% over the past year.
Philips Plunges After Halting Sales of Sleep Apnea Devices in the US
5 hr 18 min ago
New York Registry shares of Koninklijke Philips (PHG) tumbled over 5% in intraday trading Monday after the medical technology firm said it would stop selling its sleep apnea devices in the U.S. after they were found to present a potential hazard.
The Netherlands-based company said the decision came as it complied with a consent decree with the Department of Justice representing the Food and Drug Administration (FDA). It said that decree would provide its Philips Respironics unit “with a roadmap of defined actions, milestones, and deliverables to demonstrate compliance with regulatory requirements and to restore the business.”
The company noted that as a consequence of the multi-year consent decree, it recorded a 363 million euro ($392 million) provision in the fourth quarter related to remediation activities, inventory write-downs, and “onerous contract provisions.” It added that it anticipates some 100 basis points (bps) of costs this year for remediation activities and disgorgement payments for Philips Respironics sales in the U.S.
Despite Monday’s selloff, New York Registry shares of Philips were up more than 24% over the past year.
TradingView
Amazon Calls Off iRobot Acquisition Amid Antitrust Scrutiny
6 hours ago
Amazon (AMZN) said it no longer plans to acquire iRobot (IRBT), sending shares of the Roomba maker tumbling in intraday trading Monday.
iRobot also announced a restructuring plan to lay off 350 workers or about 31% of the company’s workforce, and that Chief Executive Officer (CEO) Colin Angle would step down.
The deal fell through after reports earlier this month cast doubt on its future amid regulatory scrutiny after the European Commission reportedly told Amazon that the acquisition was likely to be blocked.
Amazon said in 2022 it would acquire the Roomba maker in a $1.7 billion deal. Later, Amazon lowered its purchase price to $1.4 billion after iRobot took on additional debt.
iRobot shares were down 5.8% at $16 per share Monday following the news, while Amazon shares were 1% higher at $160.70.
Accounting Investigation Won’t Impact Earnings, Says Archer Daniels Midland
6 hr 45 min ago
Shares of Archer Daniels Midland (ADM) rose Monday after the agricultural products trading company said an internal investigation of its accounting practices would not materially impact its results.
In a letter to employees on Friday, CEO Juan Luciano said an investigation of intersegment sales—the transfer of goods between units—had delayed the company’s quarterly earnings report, “but these sales do not materially affect our overall results.”
ADM last week postponed its earnings release and announced an investigation into accounting practices at its nutrition unit after receiving a voluntary document request from the SEC. The company also placed its chief financial officer on administrative leave and, retracting its nutrition segment forecasts, lowered its full-year earnings guidance to more than $6.90 per share from more than $7 per share.
Shares rose nearly 4% Monday but were still down more than 35% in the last 12 months.
Hong Kong Court Orders Property Developer Evergrande Liquidated
8 hr 6 min ago
A Hong Kong court on Monday ordered embattled property developer Evergrande Group to liquidate after more than a year of talks between the company and creditors failed to deliver a debt restructuring plan.
Evergrande sent shockwaves through the Chinese real estate sector and the wider economy in December 2021 when it defaulted on its US bonds.
In its November 2021 Financial Stability report, the Federal Reserve, seeing trouble brewing, warned that stresses in China’s real-estate sector could spill over to the US. Those stresses did, indeed, hammer China’s economy and stock market, but failed to produce a Lehman moment.
But Monday’s liquidation order very well could have an impact that spreads. By liquidating Evergrande, foreign investors have been sent the message that the so-called implicit guarantee, where China protected its largest companies, no longer exists: there will be no bailouts when investments in the world’s second-largest economy go sour.
Bond investors may steer clear of Chinese companies, and not just those of other firms in the distressed real estate sector. And the order doesn’t do much to restore investor confidence in stocks, which have struggled ever since the government began cracking down on debt levels and private companies like Alibaba.
Chinese stocks fell Monday, with the Shanghai Composite losing nearly 1%. American depositary receipts (ADRs) of Chinese companies were also lower. PDD Holdings (PDD) ADRs fell more than 6% in early trading Monday, while JD.com (JD) slid 3% and Alibaba (BABA) slipped about 1%.
SOXX ETF in Focus as Billions in US Subsides Expected For Chipmakers—Key Levels to Watch
8 hr 42 min ago
The iShares Semiconductor ETF (SOXX) returns to the spotlight Monday after the Wall Street Journal reported over the weekend that the Biden Administration plans to award billions of dollars in subsidies to leading semiconductor companies for building new U.S.-based factories.
Likely recipients of the subsidies include Intel Corporation (INTC), which has outlaid more than $43.5 billion to construct new facilities in multiple states, and Taiwan Semiconductor Manufacturing Co (TSM), which has invested $40 billion to build two new plants in Arizona. Within the SOXX fund, Intel and Taiwan Semiconductor carry respective portfolio weightings of 5.88% and 3.59%.
Source: TradingView.com.
After a retest of key support at $535, the ETF’s share price has continued to trend upwards on increasing volume, suggesting institutional participation behind the rally.
If the fund moves higher, monitor how the price responds to last week’s all-time high (ATH). A close above this closely watched level would indicate bullish momentum remains intact and potentially lead to further upside.
However, if a retracement takes place around the ATH, it’s worth monitoring if an uptrend line stretching back to the October swing low provides support near $575.
Stocks Making the Biggest Moves Premarket
9 hr 47 min ago
Gains:
- SoFi Technologies Inc. (SOFI): Shares of the online lender jumped 17% after it swung to a profit in the fourth quarter, topping analyst estimates with its earnings of 2 cents a share.
- Dollar Tree Inc. (DLTR): Shares of the discount retailer were up 3% in early trading after JPMorgan upgraded the stock to “overweight” from “neutral.”
- American Airlines Group Inc. (AAL): Shares added more than 1% after Citigroup upgraded the airline to “buy” from “hold,” citing the company’s focus on deleveraging and its low capital expenditures.
Losses:
- iRobot Corp. (IRBT): Shares of the Roomba maker tumbled 24% after Amazon (AMZN) called off its acquisition of the company amid regulatory scrutiny in the European Union.
- Warner Bros. Discovery Inc. (WBD): Shares of the entertainment company fell about 2% after Wells Fargo downgraded the stock to “equalweight” from “overweight.”
- Albemarle Corp. (ALB): Shares fell more than 1% after analysts at TD Cowen downgraded the lithium miner to “market perform” from “outperform,” citing uncertainty about its free cash flow and continued softness in lithium prices.
Stock Futures Mixed at Outset of Big Tech Earnings Week
10 hr 20 min ago
Futures contracts connected to the Dow Jones Industrial Average were rising in premarket trading but were still about 0.1% lower than Friday’s close.
S&P 500 futures were unchanged from last week, but similarly advancing.
Nasdaq 100 futures traded 0.1% higher about an hour before markets opened.
