Stock market gains continued this week with big gains, boosted by a subdued CPI inflation report and as U.S. Treasury yields plummeted, capping the possibility of further Fed rate hikes. The NASDAQ hit a new short-term high in September. The Russell 2000 led the weekly rally, but encountered major resistance and pulled back. More leading stocks have issued buy signals, but many are lagging.
X
Cisco Systems (CSCO), palo alto networks (PANW) and alibaba (BABA) fell on earnings and guidance, but the spillover to related stocks was relatively small. microsoft (MSFT) announced its own AI chip and hit a record high.
Market continues to rise
The major indexes posted strong gains for the week, but there were signs of a pause in the second half of the week. Small-cap stocks had the biggest gains, but they met resistance and fell back. U.S. Treasury yields fell after a weaker-than-expected CPI inflation report, and other economic indicators were generally weaker. Crude oil prices fell to a four-month low.
Inflation and economic data close the door on Fed rate hikes
With subdued consumer inflation and generally weak economic data, further Fed rate hikes appear all but set, and markets are starting to price in rate cuts next spring. Consumer prices were flat in October, rising only 3.2% year-on-year, lower than expected. Core inflation has fallen to 4%. Meanwhile, the number of new unemployment insurance claims hit the highest level in three months, and the number of continuing claims hit the highest level in almost two years. October retail sales showed a slowdown in consumer spending, and manufacturing reports continued to show contraction.
Microsoft announces AI chip
microsoft (MSFT) unveiled the indigenous artificial intelligence processor it will use to complement the chip. AMD (AMD) and Nvidia (NVDA). Azure Maia AI Accelerator runs generated AI workloads in Microsoft’s cloud data centers. The processor will also reduce the company’s dependence on third-party chips. Microsoft plans to deploy Maia to its data centers early next year. Meanwhile, Nvidia has launched new data center processors optimized for AI applications. Nvidia announced the HGX H200 AI computing platform and his GH200 Grace Hopper superchip.
Walmart, Target Switch Place
walmart (WMT) reported third-quarter EPS up 2% to $1.53, up a penny. Sales rose slightly by 5.2% to $160.8 billion. However, the Dow Jones giant gave a full-year outlook that was below Wall Street consensus. Discounters said they are seeing a decline in general commodity prices. On Thursday, WMT stock fell and fell below its buy point. The day before, the goal (TGT)’s revenue rose 36%, easily outperforming this, but revenue fell 4.2% to $25.4 billion, slightly above historical viewership. Profit margins and inventory have improved. The discounter announced his EPS guidance for the fourth quarter was roughly in line with the midpoint. Shares soared 18% on Wednesday, recovering from a long downward trend.
bj wholesale (BJ) slightly beat third-quarter EPS, with sales up 2.9% to $4.92 billion, with core same-store sales flat. Costco’s rivals made cautious comments about consumer behavior. BJ’s stock fell during the week in response to Walmart and its own performance.
Home Depot’s profits and sales decline again
Dow Jones hardware heavyweights home depot (HD) reported a 10% decline in third-quarter EPS and a 3% decline in revenue to $37.71 billion, marking the third consecutive quarter of year-over-year declines. Same-store sales decreased 3.5%, the fourth consecutive year of decline. But they all outweigh the views. Home Depot stock soared this week as U.S. Treasury yields fell.
Palo Alto ignores billing guidance
palo alto networks (PANW) reported first-quarter earnings and sales growth of 66% and 20%, respectively, beating Wall Street targets even as growth in the core network firewall market slowed. However, the bill amount did not grow slightly, he increased by 16%. Current billing guidance for the January quarter and full year 2024 was lower than expected. Palo Alto is projecting sales of $1.97 billion for the quarter at the midpoint of guidance. While PANW stock fell, other cybersecurity stocks held up.
Cisco guidance knocks down Dow giant
Cisco Systems (CSCO) beat expectations for the first quarter, with EPS up 29% and revenue up 8% to $14.7 billion, despite another decline in product orders. The networking giant reported earnings and revenue for the quarter that were well below consensus. CSCO stock fell sharply, but other network stocks did not have a big impact.
Boeing wins at major air show
Aerospace giant Dow Jones dominated orders at the Dubai Air Show. Emirates announced on Monday that it had ordered 95 Boeing wide-body jets for $52 billion. Meanwhile, flydubai announced it has ordered 30 787-9 Dreamliners for $11 billion. Additionally, SunExpress has firm orders for 45 Boeing 737 MAX jets, with an option to purchase an additional 45. Boeing also signed a deal with Ethiopian Airlines on Tuesday for 11 Dreamliners and 20 737 MAXs.european rival airbus (EADSY) secured small orders for A350 and A220 aircraft from Ethiopian Airlines and Air Baltic earlier in the week. On Thursday, Airbus signed a $6 billion deal with Emirates Airlines for 15 more A350s, following a public rift over Rolls-Royce’s engine problems. Separately, there were reports last week that China would allow the sale of the Boeing 737 Max to Chinese airlines, but that has not yet happened. While BA stock continues to rise, jet engine makers general electric (GE) has hit a new long-term high. Airbus shares rose steadily.
Applied Materials Under Investigation
The Justice Department is reportedly investigating. applied materials (AMAT) Regarding the possible illegal export of chip manufacturing equipment to SMIC, a top Chinese chip manufacturer. Officials told Reuters the chip equipment maker may have violated trade restrictions targeting advanced semiconductor technology. News of the criminal investigation overshadowed Applied Materials’ Beat and Raise quarterly report. AMAT stock fell on Friday.
china internet
alibaba (BABA) reported an 18% increase in EPS to outpace views, but revenue rose just 6% to $30.8 billion. The Chinese internet giant also said it no longer plans to spin off its cloud services business, citing uncertainty due to U.S. restrictions on exports of high-performance chips. Before, JD.com (JD) grew 8% in EPS, was the most viewed company, and had revenue up 2% to $34.2 billion.gaming and messaging giant tencent (TCEHY) reported a 45% increase in adjusted profit and a 10% increase in sales to $21.4 billion. WeChat’s parent company cited high-margin gaming growth.mobile gaming giant NetEase (NTES) topped the EPS view, but missed out on earnings slightly and cut its dividend. Tencent and Jingdong stocks soared amid a long downtrend. BABA stock plummets. NetEase’s performance declined slightly, but it maintained a buy range.
off price retail
TJX Co., Ltd. (TJX) reported 20% EPS growth and 9% revenue growth, both of which outpaced viewership. However, the off-price apparel and home goods retailer’s fourth-quarter profits remained low.apparel rival loss store (ROST) reported 33% EPS growth and 8% revenue growth, while providing so-so guidance. TJX stock plummets. ROST stock fell on guidance from TJX and Walmart, but bounced back into the buy zone on the back of its own earnings.
News summary
Monday.com (MNDY) reported third-quarter earnings of 64 cents per adjusted share. Sales increased 38% to $189.2 million. Analysts had expected sales of $182.4 million and adjusted earnings of 21 cents. Last year, Monday.com reported that he earned 5 cents on revenue of $136.9 million. For the current quarter ending in December, Monday.com expected revenue of $197 million, compared to expectations of $195 million.
On hold (ONON) reported 208% EPS growth, but revenue growth slowed to a still-fast 58%. The Swiss luxury athletic shoe maker raised its full-year earnings forecast, but sales growth is likely to continue to slow in the fourth quarter. The stock price initially fell in response to the results, but has since rebounded.
williams sonoma (WSM)’s revenue fell 16% to $1.85 billion, just short of viewership. EPS fell 2%, but comfortably beat expectations. The luxury home furnishings retailer also raised its operating margin target for 2023. Stocks soared and flew off base.
XPeng (XPEV) lost 62 cents, which was worse than feared. Sales increased by 22%, the first increase in four quarters, but the growth was slightly missed due to the impact of China’s EV price war. The company, which had already reported record vehicle deliveries in October, gave a somewhat mixed outlook for the fourth quarter. Stocks rose, but were well off their weekly highs.
Amazon.com (AMZN) will allow car sales on its platform starting next year, with Hyundai becoming the first brand to participate. Carvana (CVNA) Stock, autonation (AN) And carmax (KMX) I fell down.
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