Stock prices turn upward in view of Big Tech profits

U.S. stocks opened higher on Monday as investors braced for a flood of corporate earnings, attempting to recover from their worst week of the year.

The S&P 500 (^GSPC) rose 0.5% on Friday after closing below the 5,000 level for the first time since February amid six straight days of declines. The Dow Jones Industrial Average (^DJI) rose 0.3%, and the tech-heavy Nasdaq Composite Index (^IXIC) rose 0.7%.

After the recent selloff, the market's bull run has sunk to its weakest point in months, and this week will be crucial in determining whether that slump continues.

Tech stocks are looking to recover after Netflix's (NFLX) lackluster earnings dragged down a broader market already facing geopolitical tensions. As the chances of a rate cut fade, there is growing skepticism that megacaps can continue to play a role in driving profits.

Expectations are now resting on the big tech companies' earnings reports later this week, reassuring and reinvigorating the market. The deck features quarterly reports from Meta (META), Microsoft (MSFT), and Alphabet (GOOG).

The focus on Monday was Tesla (TSLA), with the EV maker cutting prices in the U.S., China and several other countries. Tesla will report its quarterly results after the market closes on Tuesday. Elon Musk's company has already spooked some investors with its push for robot taxis and its decision to force shareholders to vote again on a pay package that Musk rejected. Shares were down about 2% on Monday morning.

Meanwhile, debate over the Fed's stance on rate cuts continued to rage after Chairman Jerome Powell and other policymakers became more hawkish in the face of persistent inflation last week. Given this situation, people are already turning their attention to Friday's release of the PCE index, the Fed's preferred inflation measure, as important in assessing whether interest rates will remain high for a longer period of time. .

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Monday, April 22, 2024 07:07 PDT

Nvidia stock rebounds 3%, Tesla stock decline widens

Nvidia (NVDA) stock led the big tech rally on Monday as the broader market tried to recover from last week's decline.

Nvidia rose more than 3% after falling 10% on Friday. Selling in technology stocks led to sharp declines in the Nasdaq Composite Index (^IXIC) and S&P 500 Index (^GSPC) on the day.

On Monday, the S&P 500 rose 0.5%, trying to end a six-day losing streak.

Meanwhile, Tesla (TSLA) stock was down about 2% at around 10 a.m. ET as investors reacted to the EV maker's lower prices for its vehicles in China. Monday was Tesla's seventh straight decline.
Monday, April 22, 2024 06:33 PDT

Stock prices try to recover ahead of Big Tech earnings

Stocks opened higher on Monday after the worst week of the year as investors waited for a flood of profits.

The S&P 500 (^GSPC) rose 0.5%, climbing back above the 5,000 level. The Dow Jones Industrial Average (^DJI) also rose 0.5%, and the tech-heavy Nasdaq Composite Index (^IXIC) rose 0.6%.

Tech stocks were on track to recover from Friday's plunge on lackluster earnings for Netflix (NFLX) and a 10% drop in stock price for AI darling Nvidia (NVDA)

The focus Monday was on Tesla (TSLA), with the EV maker announcing price cuts in the U.S., China and several other countries. The company's stock price fell more than 4% in early trading. Tesla will report its quarterly results after the market closes on Tuesday.

Other highly anticipated quarterly results this week include Meta (META), Microsoft (MSFT), and Alphabet (GOOG).
Monday, April 22, 2024 03:34 PDT

A reminder about Friday's assaulted Nvidia

Tough session for Nvidia (NVDA) on Friday — the stock dropped 10%!

The stock is currently down 25% from its March 25 high.

No one knows if this is the bottom, as the entire AI industry is under pressure amid more cautious sentiment.

But what I do know is that Nvidia is fundamentally strong and will likely be protected by the market soon due to the selloff.

Evercore ISI's Mark Lapacis makes a good point in a new note highlighting that point.

“Investors need to understand that 1) the importance of the chip + hardware + software ecosystem that Nvidia has built, and 2) that the computing era will last 15 to 20 years and will typically be dominated by a single vertically integrated ecosystem company. We believe that the revenue is an underestimate as it is measured in units of 1000.

And Jay Woods, chief global strategist at Freedom Capital, made another good point about the NVIDIA sale in his first bid this morning (episode below).

“These things happen and people get emotional about this stock, but for those who are waiting for a stock sell-off that continues to crush stocks in each earnings cycle or in the hottest areas, it's a great stepping stone. I think it's an opportunity.” ”

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