Friday's market action tells a lot about what's currently going on
1) US large-caps equities index recorded strong gains ($SPX +1.07%; $NDX +1.69%) thanks to huge advance by $META (+20%) and $AMZN (+7%); 2) Underneath the surface, there is some selling taking place - the S&P 500 equally weight is DOWN -0.08% on the day. We need to see decent market breath for the equity bull market extend as the mag7 (or rather the "mag 4" as leadership is even more narrow than in 2023) will not be able to carry the market forward for ever... Source: Bloomberg
Chinese stocks
Source: Ayesha Tariq, CFA
European stocks are currently trading at their lowest valuation relative to U.S. Stocks in history
Source: Win Smart, IBES
Equities have left central bank balance-sheet behind...
Source: UBS, TME
The weight of the 10 largest sp500 stocks is now 33.1% of the total $SPX, the highest level in almost 5 decades.
Source: Barchart
The week is THE week of BIG TECH earnings and it is time for a reality check: NVDA is the only Magnificent 7 stock seeing an increase in earnings revisions.
The company is almost the sole beneficiary of the recent AI advancements, contrasting sharply with others that have only experienced hype without any fundamental improvement. Is the Mag7 acronym already blowing out? Source: Bloomberg, Tavi Costa
Microsoft $MSFT hitting all-time highs in extended hours trading after blowing out EPS and Revenue expectations
• Revenue +18% Y/Y to $62.0B ($0.9B beat). • Gross margin 68% (+2pp Y/Y) • Operating margin 44% (+5pp Y/Y). • EPS $2.93 ($0.16 beat). Source: App Economy Insights
⚠️ Alphabet $GOOGL is down between -3% and -5% in extended hours trading after beating EPS and Revenue expectations
SUMMARY OF ALPHABET $GOOGL EARNINGS: 1. Revenue +13% Y/Y to $86.3B ($1.0B beat). 2. EPS $1.64 ($0.04 beat). 3. The search giant underperformed in its core ad search segment. -> Google’s advertising revenue totalled $65.52 billion, below expectations for sales of $65.80 billion. 4. Operating income also came in below expectations at $23.7 billion, compared to $23.82 billion. 5. On the bright side, Google cloud revenue topped estimates as the company spends heavily to compete with Microsoft’s Azure and Amazon’s AWS. ☁️ Google Cloud: • Revenue +26% Y/Y to $9.2B. • Operating margin 9% (+12pp Y/Y). 6. ▶️ YouTube ads +16% to $9.2B.
