Stocks jumped into early gains Wednesday, as markets moved to extend Tuesday’s bullish rebound. Chipotle Mexican Grill, ASML Holdings and Travelzoo led the names rallying on earnings news, while Netflix skidded after its report. On the Dow Jones today, Boeing and Coca-Cola led as more than 20% of the index rose more than 2%.
X
Dow Jones Industrial Average scrambled 0.8% higher, up more than 250 points, with Coca-Cola (KO) out front in early trade. The S&P 500 rallied 0.6%, confirming Tuesday’s rebound from 50-day support.
The Nasdaq Composite strengthened to a 0.4% advance, held back partly by Apple (AAPL), which sagged under uncertain impact from flooding in China. ASML Holdings (ASML) and Nvidia (NVDA), both IBD Leaderboard listings ran at the head of the Nasdaq 100.
Nvidia rallied after Oppenheimer adjusted its price target to 235, after the stock’s 4-for-1 split on Tuesday. The new price target is 23% above where shares traded early Wednesday. Nvidia is in a buy zone following a rebound from 10-week support.
Chipotle Mexican Grill (CMG) ran hot on the S&P 500, rising more than 8% after reporting results late Tuesday. Halliburton (HAL) rallied 3.8% after its earnings report, and as Goldman Sachs upgraded the stock to buy, from neutral.
Vaccine maker and IBD 50 stockModerna (MRNA) dropped 3.1%, entering its first day as an S&P 500 listing.
Beyond earnings, NeutroMetrix (NURO) spiked 88% in opening trade. The stock soared 210% on Monday, after the Food and Drug Administration conferred “breakthrough designation” status to the company’s Quell Device for treating fibromyalgia in adults.
Dow Jones Today: Coke, Verizon, J&J Earnings
Boeing (BA) and Coca-Cola set the pace on the Dow Jones today, up 2.8% and 2.3%, respectively. Apple stock dropped 0.7%, possibly affected by concerns over flooding in central China. CNBC reported that contract manufacturer Foxconn, Apple’s largest supplier, affirmed that its massive Zhengzhou assembly plant had not so far been affected by the floods. The city of 10 million has reportedly seen intensive flooding.
Coke stock scaled up 2% after scoring a solid sales and earnings beat, and raising its full-year earnings guidance above analyst views. The premarket gain suggested a starting bell breakout past a 56.58 buy point in a five-week flat base.
J&J reversed its premarket gains on the Dow Jones today and dropped 0.3%, despite easily clearing second-quarter expectations and raising full-year earnings and revenue guidance above analyst views. The stock ended Tuesday just below a 171.28 entry in a nine-week cup-with-handle base.
Global Stock Markets
Action was mixed across worldwide markets on Wednesday. Hong Kong’s Hang Seng Index closed 0.1% lower, extending its slide to three days as widespread floods displaced an estimated 200,000 people in central China. In Japan, Tokyo’s Nikkei 225 climbed 0.6%, ending a five-session decline just as the Summer Olympic Games are about to get underway.
Stocks moved higher in Europe. In afternoon trade, London’s FTSE 100 climbed 1.6% gain. The CAC-40 in Paris rallied 1.4%. Frankfurt’s DAX traded 1% higher.
Vital Signs: Bond Yields, Oil Prices, Bitcoin
Bonds eased, sending yields higher after a sharp reversal on Tuesday. The 10-year yield rose to 1.26% early Wednesday, after settling just below 1.21% on Tuesday. Yields on Tuesday briefly fell to their lowest level since Feb. 2, and are now below support at their 200-day moving average.
The last time the 10-year yield broke below the 200-day support line was in December 2018. That began a nine-month slide that ended just ahead of the Covid-19 pandemic.
Oil prices bounced Wednesday, with U.S. benchmark West Texas Intermediate up 1.6% to $68.27 a barrel. WTI reversed from early losses on Tuesday, following Monday’s 7.5% dive — the worst single-day drop since September. Prices began to slide after the Organization of Petroleum Exporting Countries and partners led by Russia, typically called OPEC+, agreed Sunday to a strategy to return production to pre-pandemic levels by 2022.
Monday’s loss left oil prices tracking toward a third-straight weekly decline, on the heels of a six-week rally. Prices on July 6 reached $76.98, their highest level since October 2014.
Bitcoin rallied 6% to above $31,500, after dipping to $29,327 on Tuesday. The cryptocurrency had traded above $36,000 in late June, and touched a record high near $65,000 in April.
Earnings News: ASML, ISRG, Chipotle
In addition to the three blue chips reporting earnings on the Dow Jones today, Travelzoo (TZOO), Lithia & Driveway (LAD), Harley Davidson (HOG), Interpublic Group (IPG) and Qualtrics International (XM) all surged higher after their reports.
ASML Holdings sparked 2.7% higher to trade high on the Nasdaq 100. The Netherlands-based chip equipment maker reported mixed second-quarter results, but raised its third-quarter revenue guidance. The stock is technically in a buy zone on a rebound from support. But IBD Leaderboard cautions that “Investors should not think of buying unless the stock regains the (705.90) buy point.”
After the close, Texas Instruments (TXN), Discover Financial (DFS), Whirlpool (WHR) and Mastercard (MC) are among the companies scheduled to report.
Nasdaq, S&P 500, Dow Jones Today
Results on Tuesday told a strong story of support across the three big benchmarks. The Nasdaq retook support at its 21-day exponential moving average. The S&P 500 rebounded gracefully from a test of support at its 50-day line. And the Dow industrials regained 50-day support, ending the session just even with the index’s 21-day line.
As a result, ETFs tracking the Dow Jones today are back near buy points. The SPDR Dow Jones Industrial Average ETF Trust (DIA) is 1% below its 348.75 entry. The leveraged ProShares Ultra Industrials (UXI) is 3% below its buy point at 34.07.
In addition, the SPDR S&P 500 ETF Trust (SPY) is in a buy zone on its rebound from its 50-day/10-week moving average.
Small caps skipped the support story. But both the Russell 2000 and the S&P Smallcap 600 turned in big gains for the day, rallying 3% and 2.9%, respectively. In both cases, that ended five-day declines. But both indexes remain well below recent highs and have repair work to do.
Market Status: Uptrend Under Pressure
Tuesday’s gains were a bullish follow up to Monday’s dive, with money flowing back into a broad range of sectors. However, a glance at IBD’s Market Pulse shows the stock market’s status remains “Uptrend Under Pressure.”
That leaves the door open to purchases of leading stocks breaking out past buy points. But it also cautions investors that the market remains volatile, with a number of indicators suggesting possible further consolidation.
For more detailed analysis of the current stock market and its status, study the Big Picture.
With earnings season fully underway, there are bound to be the usual quarterly successes and failures. HCA Healthcare (HCA) and AutoNation (AN) are among this week’s winners.
It is a good time to study up on pyramiding, and on earnings season options trades. These offer different approaches to limiting exposure while making purchases during earnings season.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
