The stock market continued to decline, with all major indexes falling further below their 50-day moving averages. ASML (ASML) and taiwan semiconductor (TSM) issued a cautious comment and criticized semiconductor stocks. Netflix (NFLX) fell on weak guidance. tesla (TSLA) plummeted ahead of its upcoming earnings amid massive layoffs and big questions about its strategy. united airlines (UAL) has increased its profits and soared.
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stock market crash
The market suffered heavy losses, with all major indexes falling significantly below their 50-day moving averages. ASML and Taiwan Semiconductor, once the top semiconductor stocks, were sold. Despite the Iranian attack, oil prices fell. Government bond yields soared to their highest level in 2024, but are off the high. U.S. Treasury yields slowed their rise, but rose to their highest level in five months. Crude oil prices have fallen.
Retail sales, Powell withdraws rate cut
Strong retail sales show that consumer spending has staying power. Sales in March increased by 0.7%, exceeding the expected 0.4% increase, and February’s growth was revised upward from 0.6% to 0.9%. Sales excluding automobiles and gasoline rose 1% and were revised upward again in February. Federal Reserve Chairman Jerome Powell no longer believes inflation is trending down. The sales data and Chairman Powell’s comments pushed hopes for a first rate cut into September. Meanwhile, housing starts fell by 15% in March, but the number of permits fell more modestly by 4.3%. The initial number of unemployment insurance claims remains low at 212,000, and there are no signs that the labor market will soften. The Philadelphia Fed’s manufacturing index unexpectedly rose to its highest level in two years, with the once lagging factory sector gaining momentum.
Semiconductor stocks fall on weak outlook
ASML (ASML) and taiwan semiconductor manufacturing (TSM) helped trigger a sell-off in the chip sector. Chip Gear leader ASML reported mixed first-quarter results, while contract chipmaker TSMC posted a strong report. But both companies made cautious comments about the coming months. ASML missed its first-quarter revenue target and lowered its outlook for the current quarter, but revenue beat expectations. TSMC said sales of AI chips offset weaker sales of chips for smartphones and other markets. The company also slightly revised down its industry growth forecast for this year, while maintaining its growth targets.
Top Key Indicators for Intuitive Surgery
intuitive surgery (ISRG) late Thursday beat first-quarter estimates, with adjusted EPS up 22% and revenue up 11% to $1.89 billion. Notably, the number of procedures performed using Intuitive’s bread-and-butter robot, da Vinci, jumped 16%. The company is in the process of launching its next generation system, the Da Vinci 5. After receiving FDA clearance in mid-March, Intuitive Surgical introduced eight new da Vinci 5 systems by the end of the quarter.
Tesla addresses layoffs and growth concerns
tesla TSLA has fallen to a 52-week low amid mounting evidence that the launch of the $25,000 EV will be delayed for at least a few years, raising serious questions about its growth drivers. CEO Elon Musk has made it clear that the company is almost entirely focused on autonomous driving. Tesla will cut more than 10% of its global workforce, or more than 14,000 people, while some key executives will leave. Meanwhile, Tesla asked shareholders to approve Musk’s $55 billion 2018 compensation plan, even though a Delaware court invalidated the plan earlier this year. On Friday, Tesla recalled Cybertruck vehicles to fix a problem with the gas pedal.
Netflix’s second-quarter guidance is disappointing
Netflix (NFLX) beat Wall Street’s targets for the first quarter, but missed viewership estimates for the second quarter. Netflix gained 9.33 million subscribers in the March quarter, beating expectations of 5.48 million. It ended the period with a total of 269.6 million subscribers worldwide. Netflix’s revenue increased 83%, with revenue up 15% to $9.37 billion. This quarter, Netflix saw an increase in his EPS, but a slight decrease in revenue. The streaming video leader also said it would stop reporting subscriber numbers and average revenue per member starting in the first quarter of 2025, which upset investors.
United Airlines soars Boeing’s revenue
united airlines (UAL) reported a smaller-than-expected loss, but revenue rose slightly by 10% to $12.54 billion. The carrier said it had a loss of $200 million during the quarter. boeing (BA) 737 Up to 9 Grounds. United Airlines announced that it has reached a confidential compensation agreement with Boeing for financial damages. However, airlines expect fewer aircraft deliveries this year due to delays. United Airlines revised its second-quarter profit upwards while maintaining its full-year outlook, with the midpoint beating consensus. United stock soared.
United Health’s profits recover
The Dow health insurance giant reported a 10% increase in EPS and a 9% increase in revenue to $99.8 billion, easily outperforming this. The adjusted numbers confirm some, but not all, costs associated with the cyberattack on the company’s Change Healthcare division, which disrupted bill payments and prescription authorizations across the industry. Adjusted to take into account the mild impact of cyber-attacks, united health (UNH) reported that the medical expense ratio, or benefits paid as a percentage of premiums, rose to 83.9%, significantly higher than estimated. That’s up from 82.2% in the same period last year, but it allays investor concerns about strong trends in healthcare utilization. UNH stock, which had fallen to its lowest since November 2021, soared.
DR Horton Tops View
The homebuilding giant reported a 29% increase in EPS and a 14% increase in revenue to $9.11 billion, both of which comfortably beat its fiscal second-quarter guidance. Housing orders increased by 14% and by value by 17%. DR Horton (DHI) led the full-year sales, most of which contributed to sales in the second quarter. The company raised its full-year stock buyback forecast to $1.6 billion from $1.5 billion. Stocks tried to soar on Thursday, but gave up the rally and have fallen this week. meanwhile, KB Home (KBH) approved up to $1 billion in stock purchases and raised its quarterly dividend from 20 cents to 25 cents per share. Stocks rose on Friday on the news, paring their weekly losses.
Bank general top view
goldman sachs (GS), morgan stanley (MS), american bank (BAC), PNC Financial (PNC) and new york mellon bank (BK) All results will be announced. Goldman on Monday reported a 16.3% increase in net revenue and a 32% increase in profit, primarily due to investment banking gains. Morgan Stanley on Tuesday reported a 19% EPS increase, reversing eight quarters of decline. Sales growth slowed, increasing by 4.3%. Bank of America posted a 12% EPS decline, which beat expectations. PNC managed to beat expectations even though her EPS declined again. Bank of New York Mellon reported an 11% increase in profits.
Provided by online brokerage
charles schwab (SCHW) and interactive broker (IBKR) rose above earnings expectations. Schwab reported a 20% decline in adjusted EPS and a 7% decline in revenue to $4.74 billion, slightly above views. Net new assets increased by $88.2 billion, and total customer assets increased 20% to a record $9.11 trillion. SCHW stock rose steadily and moved out of the buy zone. Interactive Brokers reported that EPS increased 21%, but revenue fell just short, increasing 14% to $1.2 billion. IBKR stock has rebounded from its 50-day line and is up slightly this week.
Oil services giant SLB shares opinions
First-quarter earnings rose 19%, in line with opinion. Revenue rose by 13% to $8.71 billion, which placed him in the top spot. About half of the revenue increase in the first quarter came from Aker’s subsea operations, which he added as part of the OneSubsea joint venture in the fourth quarter. S.L.B. (SLB) saw first-quarter revenue from international operations rise 18%, even as sales in North America fell 6%. Looking ahead to the second quarter, SLB expects a seasonal pick-up in drilling activity in the Northern Hemisphere and “solid activity internationally.” SLB aims to return $3 billion to shareholders in 2024 and $4 billion in 2025. “The oil and gas industry continues to benefit from strong market fundamentals with a rising demand outlook,” said Olivier Le Pouch, CEO of SLB. Stock prices fell as oil prices fell.
Healthcare giants have mixed results
Abbott Laboratories (ABT) and johnson & johnson (JNJ) beat first-quarter earnings expectations, but sales were mixed. Abbott’s EPS declined 5%, while J&J’s increased 12%. Abbott beat sales expectations, but issued modest guidance. J&J’s profits were sluggish and there was a shortage of its psoriasis drug Stelara.
News summary
intracellular therapy ITCI (ITCI) soared to an all-time high on Tuesday after the company’s drug Caplyta showed promise in treating common depression. The results exceeded the company’s own expectations and outperformed other antipsychotics tested for similar uses. Caprita treats schizophrenia and depressive episodes associated with bipolar disorder.
Eli Lilly (LLY) reported that its weight loss drug successfully treated sleep apnea in obese patients. Lilly plans to ask global regulators to approve the drug for this use later this year.
procter and gamble (PG) reported better-than-expected first-quarter profits and raised its full-year EPS target, but fell short of a 0.6% increase in revenue to $20.2 billion.
american express (AXP) revenue outpaced views, while the Dow Jones payments giant reported an 11% increase in revenue to $15.8 billion, which was about flat. However, payments through AmEx’s network were insufficient.
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