Closing Bell: Earnings Season Strength… or Stumble? 7/23/24
Jul 23, 2024
auto_awesome
Financial experts Dan Greenhaus, Marci McGregor, and Victoria Fernandez discuss the impact of earnings season on the market. Shareholder Ayako Yoshioka and tech expert Alex Kantrowitz analyze Alphabet's report. Also, top analyst Dan Ives shares insights on Tesla's numbers.
Investors watch Tesla's margins in response to China pricing stabilization and lower-priced model plans.
Alphabet's report highlights Google Cloud revenue growth, YouTube ad revenue, and market position.
Deep dives
Texas Instruments: Stabilization in Demand and Margins
Analysts expect a year-over-year decline in Texas Instruments' earnings for the second quarter amidst concerns about its customers in the automotive space and working through inventory levels. Investors will closely watch the company's margins, looking for signs of stabilization, and potential adjustments in its CAPEX budget. With 75% of its business in the U.S., Texas Instruments' plans for further expansion in the U.S., like its wafer fabrication plant in Utah, will be under scrutiny.
Tesla: China Pricing Impact and Lower-Priced Model Plans
Tesla's earnings report will shed light on the impact of China pricing stabilization on its margins. Investors anticipate insights into its plans for a lower-priced model following previous commitments, possibly around $35,000. Focus will also be on Tesla's total deliveries, aiming slightly above last year at 1.8 million. Expectations are high for hints on its upcoming robotaxi service and push to increase annual deliveries.
Alphabet: Google Cloud Performance and YouTube Ad Revenue
In Alphabet's report, attention will be on Google Cloud's revenue growth and sales, crucial for artificial intelligence demand and CapEx investments. Investor impatience may surface regarding the pay-off from heavy Cloud CapEx. Observations on YouTube ad revenue, as streaming trends favor ad-supported models, will reveal Alphabet's strong market position but potential valuation discrepancies.
Market Overview: Big Cap Indexes Show Mixed Movement
As mega cap earnings season approaches, the S&P 500 is currently down by 0.2%, while the NASDAQ remains flat, recovering from yesterday's semiconductor-driven gains. The Russell 2000 experienced intraday volatility, initially surging but settling with a 1% gain. Market breadth is balanced but volume is mixed, showcasing a rotation towards financials and small caps. Continued bond market strength keeps the 10-year Treasury yield below 4.25% as anticipation builds for Tesla and Alphabet earnings announcement.
Will this earnings season serve as a support or a stumbling block to a fully valued market? Solus’ Dan Greenhaus, Merrill and Bank of America Private Bank Marci McGregor and Crossmark’s Victoria Fernandez break down what they’re expecting. Shareholder Ayako Yoshioka and Big Technology’s Alex Kantrowitz explain what is at stake for Alphabet’s report and for the broader tech space. And, top analyst Dan Ives tells us what he is watching from Tesla’s numbers.
Get the Snipd podcast app
Unlock the knowledge in podcasts with the podcast player of the future.
AI-powered podcast player
Listen to all your favourite podcasts with AI-powered features
Discover highlights
Listen to the best highlights from the podcasts you love and dive into the full episode
Save any moment
Hear something you like? Tap your headphones to save it with AI-generated key takeaways
Share & Export
Send highlights to Twitter, WhatsApp or export them to Notion, Readwise & more
AI-powered podcast player
Listen to all your favourite podcasts with AI-powered features
Discover highlights
Listen to the best highlights from the podcasts you love and dive into the full episode