Market Observations - Apr 24

U.S. Tuesday Market wrap:

Top 5 Up on Uphold Ascent in the past 24H

1. Hedera | $HBAR | +46.87%
2. Bonk | $BONK | +30.74%
3. Highstreet | $HIGH | +16.69%
4. Algorand | $ALGO | +15.71%
5. PARSIQ | $PRQ | +10.19%

Top 5 Down on Uphold Ascent in the past 24H

1. Orca | $ORCA | -11.64%
2. Evernode | $EVR | -11.52%
3. Mythos | $MYTH | -10.32%
4. Ontology | $ONT | -10.22%
5. Stacks | $STX | -8.11%

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Stocks rallied for a second day as a strong batch of corporate earnings assuaged concerns over higher for longer rates. The Dow gained 263 points or 0.69%, the Nasdaq rallied 1.60%, and the S&P jumped 1.2% to close at 5,070. Ten of the eleven S&P sectors closed green. Communications +1.52% led, and materials -0.86% lagged.

About 20% of the S&P has reported earnings through Tuesday. Of those companies, 76% have beaten analysts’ expectations, according to FactSet data.

G.E. Aerospace surged 8% to fresh highs after its earnings and revenues topped expectations in its first quarterly report since completing its spinoff.

One of the most widely anticipated earnings reports this week was from Tesla, the worst performer of the “Magnificent Seven” stocks and S&P 500. It did not disappoint.

Revenues were down 9% y/y, marking their?biggest?decline since 2012 as the company (and industry) battle faltering electric vehicle demand. We’ve heard time and time again of these macroeconomic headwinds that are weighing on demand, but the company has yet to offer a real solution. Well, that seemingly changed today after?Elon Musk announced on the conference call that Tesla plans to release an affordable new E.V. in?“early 2025 if not late this year.”?given the state of the automotive business right now, it makes sense that they’d want to continue managing expectations on that front and talking up these bigger-picture ideas.

When low expectations meet “not as bad” results and promises of a light at the end of the tunnel, you get a relief rally. Shares were up 12% after hours.

Texas Instruments Inc.?gave a?bullish revenue forecast for the current quarter, indicating that a slump in demand for industrial and automotive components may be easing.?Sales in the period will be as much as $3.95 billion, the company said in?a statement?Tuesday. Analysts estimated?it to be $3.78 billion,?according to data compiled by Bloomberg.?Profit will be $1.05 to $1.25 a share versus a prediction of $1.17.The report suggests that customers have?begun to resume?ordering chips after working through stockpiles of components — a good sign for the broader industry. Texas Instruments, which has the?broadest?customer?base among chipmakers, serves as a bellwether for confidence in the economy — across industries ranging from space hardware to consumer electronics.?

Perplexity looks to raise $250 million for its A.I. search platform.?A company taking on Google, Bing, and other major search engine platforms is reportedly raising at least $250 million more at a valuation ranging from $2.50 to $3.00 billion. The crazy part is how far its valuation has jumped in just a few short months. It raised roughly $74 million at a valuation of $540 million in January and first raised at a $121 million valuation in April 2023. Those are?some?big expectations to meet as it shoots for the literal and proverbial A.I. stars.

U.S. equity Futures are nudging higher in early trade as investors parsed the latest financial releases from corporate America. S&P is +0.2%, the Nasdaq 100 +0.6%, and the Dow is off marginally.

Europe’s broad STOXX 600 is 0.2%, which?was helped?by the rally in tech stocks following a 10% rise in ASM international on raised revenue guidance.

Overnight markets in the Asia Pacific region followed the general trend higher, with?strong?performance from Japan’s Nikkei +2.24%, Hong Kong’s Hang Seng +2.2%, Korea’s Kospi +2%, even mainland Chinese markets got in on the action with Shanghai rising 0.75%.

The U.S. dollar slipped lower against the Euro and GBP, hurt by?a combination of?good European data and cooling U.S. business growth. The YEN remained near a 34-year low even as Japanese officials stepped up intervention warnings.

U.S. Treasury yields are?higher: the 10-year yield +4bps to 4.638%, and the 2-year +3bps to 4.939%.

Gold prices crept higher, spot gold +0.2% to $2,327.

Oil prices slipped marginally lower following yesterday’s rally. WTI -0.3% to $83.10.

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