FinancialBuzz.com: 'Market Recap' Week Ending October 25th, 2019

FinancialBuzz.com News Commentary

NEW YORK, Oct. 25, 2019 /PRNewswire/ --  Wall Street and investors braced for another week of corporate earnings on Monday as major technology companies were set to report. On Monday, U.S. markets were slightly lifted by upbeat reports on Sino-American trade talks as well as a number of positive quarterly financial results. Then on Tuesday, markets edged lower during the early morning trading session due to several weaker-than-expected results, led by McDonald's. However, throughout Tuesday, markets also began to bounce back. The Dow Jones Industrial Average bounced by as much as 137 points intraday, but markets began spiraling downwards towards the closing bell. The Dow ended up closing 39 points lower on a flurry of news. Corporate earnings weighed on the markets heavily which were also impacted by a new social media bill to simplify data migration for users to rival platforms. On Wednesday, markets repeated a similar trend to Tuesday. The Dow Jones opened higher after Boeing reported its quarterly results and expressed optimism that the 737 MAX aircraft could return by as early as the end of the year. Despite the news from Boeing, markets began to dwindle throughout the day, but still the Dow Jones closed 40 points higher. On Thursday, markets opened higher but quickly faded. Stronger-than-expected results from Tesla and Microsoft boosted markets early in the morning, however, mixed results weighed from Twitter, Nokia, and 3M caused markets to edge lower. Art Hogan, Chief Market Strategist at the National Securities said that investors are reacting to micro volatility, which is driven by individual company names, and macro calm around trade, according to Reuters. As a result, throughout Thursday, markets remained relatively lower as investors digested future industrial slowdowns in various sectors. Biogen Inc. (NASDAQ: BIIB), Microsoft Corporation (NASDAQ: MSFT), Tesla, Inc. (NASDAQ: TSLA), Twitter, Inc. (NYSE: TWTR), Amazon.com, Inc. (NASDAQ: AMZN)

As of Thursday morning, of the 168 S&P 500 companies that have reported thus far, 80.4% of them have surpassed analysts' expectations, while 13.1% have fallen below estimates, according to MarketWatch. Despite the upbeat results, markets edged lower in the latter half of the week due to pessimistic investor sentiment. From Tuesday's peak to Thursday's close, the Dow Jones fell by 137 points despite a number of S&P 500 companies reporting better-than-expected results. Meanwhile, the Nasdaq Composite closed 66 points or 0.81% higher due to stronger earnings from technology companies. While many companies are reporting positive results, the mix of ongoing global economic volatility is causing most to restructure their guidances. J.J. Kinahan, Chief Market Strategist at TD Ameritrade in Chicago, hinted that the trade wars between the U.S. and China is causing a disruption for many major corporations. In particular, Kinahan pointed to 3M as its results were rattled by the trade disputes. "It's showing us that the tariff situation continues to be a major concern for companies in how to spend their money," Kinahan said.

Biogen Inc. (NASDAQ: BIIB) shares surged by over 35% on Tuesday morning after the Company announced it will seek U.S. FDA approval for its Alzheimer's drug, aducanumab. Aducanumab is an investigational human monoclonal antibody drug which is used to treat Alzheimer's disease. Since 2017, Biogen and Eisai have collaborated on the global development and commercialization of the drug. However, due to "futility analysis," Biogen discontinued the clinical trials earlier this year in March. The Company decided to continue its Alzheimer's drug after data from its two studies, EMERGE and ENGAGE reported a significant reduction in clinical decline.

Microsoft Corporation (NASDAQ: MSFT) reported its first quarter financial results after the market closed on Wednesday. The Company surpassed estimates which sent shares higher by 2% on Thursday afternoon. For the quarter, Microsoft reported earnings of USD 1.38 per share on revenues of USD 33.05 Billion. Analysts expected earnings of USD 1.25 per share on revenues of USD 32.23 Billion. Total revenues increased by 14% year-over-year, primarily driven by a 14% growth in its Productivity and Business Processes and a 27% growth in its Intelligent Cloud segment. Specifically, Microsoft's Intelligent Cloud segment reported revenues of USD 11.1 Billion, boosted by a 59% revenue growth in its Azure business.

Tesla, Inc. (NASDAQ: TSLA) reported its third quarter financial results after the closing bell on Wednesday. The electric vehicle manufacturer smashed analysts' earnings estimates after reporting a profitable quarter. Tesla shares skyrocketed by as much as 20% shortly after reporting its quarterly results. For the third quarter, Tesla reported earnings of USD 1.86 per share on revenues of USD 6.3 Billion. Analysts expected earnings loss of USD 0.42 per share on revenues of USD 6.33 Billion. During the quarter, Tesla witnessed Model 3 production rates increase by 50% year-over-year. Additionally, Model 3 deliveries grew by 42% in the same period. However, Model S and X production rates fell by 39%, while deliveries edged lower by 37%. Due to the stronger-than-expected quarter, Tesla said it is confident it will deliver over 360,000 vehicles this year. Tesla also expects to report positive GAAP net income.

Twitter, Inc. (NYSE: TWTR) reported its third quarter financial results before the opening bell on Thursday. The social media platform missed analysts' estimates for both earnings and revenue, which sent shares spiraling down by 18%. For the quarter, Twitter reported earnings of USD 0.17 per share on revenues of USD 823.7 Million. Analysts expected earnings of USD 0.20 per share on revenues of USD 874 Million. For the fourth quarter, Twitter is forecasting revenues between USD 940 Million to USD 1.01 Billion, slightly lower than analysts' projections of USD 1.06 Billion. Twitter warned that the headwinds faced partially in the third quarter will be felt for the entirety of the fourth quarter and will continue to weigh on the overall performance of its advertising business. Twitter warned that the headwinds could impact into 2020 as well.

Amazon.com, Inc. (NASDAQ: AMZN) reported its third quarter financial results after the market close on Thursday. Amazon fell short of earnings expectations, which sent shares lower by 7% during extended trading hours. For the quarter, Amazon reported earnings of USD 4.23 per share on revenue of USD 70 Billion. Analysts expected earnings of USD 4.62 per share on revenue of USD 68.8 Billion. The weaker-than-expected earnings is largely due to Amazon's heavy investment quarter as the Company spent over USD 800 Million to expand its one-day delivery service. Amazon Web Service (AWS) reported revenues of USD 9 Billion, falling short of estimates of USD 9.1 Billion. For the fourth quarter, Amazon is expecting revenue to be between USD 80 Billion and USD 86.5 Billion, representing an 11% to 20% growth.

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