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Meta & IBM the latest to report Q3 results

The S&P 500 closed below a key level on Wednesday. The benchmark index fell 1.4 per cent, ending the day below the 4,200 level that was being widely watched by chart analysts. It was the first time the S&P 500 closed below this threshold since May. Stock losses accelerated during the session after the benchmark broke that level.

The Nasdaq Composite lost 2.4 per cent for its worst day Feb. 21, when the index shed 2.5 per cent. The Dow Jones Industrial Average fell 105 points, or 0.3 per cent.

Alphabet shares tumbled more than 9 per cent as its cloud business missed analysts’ estimates, overshadowing its strong revenue growth and earnings beat.

Shares of peer tech behemoths Apple and Amazon slipped 1.4 per cent and nearly 6 per cent, respectively. Amazon is set to report third-quarter results after the closing bell on Thursday.

Microsoft stood out as an outlier among the decline in tech stocks on Tuesday, with shares gaining 2.8 per cent after first-quarter results beat Wall Street estimates.

Meta has reported results after the bell. Meta reported better-than-expected results for the third quarter, with revenue increasing by 23 per cent, marking the fastest growth rate since 2021. Following this announcement, the company’s stock surged more than 4 per cent in extended trading on Wednesday.

Meta is seeing faster growth in its core digital ads business as clients rebound from a tough 2022, when revenue dropped for three straight quarters.

IBM also reported results after the bell, in which the third-quarter results exceeded Wall Street estimates, with an 8 per cent increase in software sales contributing to this performance. To meet its 2023 target, the company needs to generate $5.4 billion in free cash flow in the fourth quarter, a goal higher than its earnings for the first nine months of the year.

About 29 per cent of S&P 500 companies have posted third-quarter earnings thus far. Of those companies, 78 per cent have exceeded expectations.

While corporate earnings maintain investor focus this week, investors also kept an eye on yields, as they hovered near multiyear highs. The benchmark 10-year Treasury yield climbed 11 basis points to 4.954 per cent. It traded above 5 per cent earlier in the week, which rattled investors and hit tech shares.

Turning to US sectors, Utilities and Consumer Staples were the only two performers that closed higher overnight. Communication Services fell by more than 5 per cent largely driven by the dismal results from Alphabet, and the losses from Apple and Amazon.
 
Futures

The SPI futures are pointing to a 0.3 per cent fall.

Currency

One Australian dollar at 7:35 AM was buying 63.09 US cents.

Commodities

Gold added 0.25 per cent. Silver fell 0.50 per cent. Copper dropped 1.06 per cent. Oil gained 1.98 per cent.

Figures around the globe

European markets closed higher. London’s FTSE gained 0.33 per cent, Frankfurt added 0.08 per cent, and Paris closed 0.31 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei added 0.67 per cent, Hong Kong’s Hang Seng gained 0.55 per cent while China’s Shanghai Composite closed 0.40 per cent higher.

The Australian share market closed 0.04 per cent lower at 6,854.

Ex-dividends

Acrow Formwork (ASX:ACF) is paying 2.7 cents fully franked
Bank of Queensland (ASX:BOQ) is paying 21 cents fully franked
Morphic Ethical Equities Fund (ASX:MEC) is paying 3.5 cents fully franked

Dividends payable

Australian Unity Office Fund (ASX:AOF)
A2B Australia Ltd (ASX:A2B)
Ridley Corp Ltd (ASX:RIC)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

Disclaimer

The views, opinions or recommendations of the commentators in this presentation are solely those of the author and do not in any way reflect the views, opinions, recommendations, of Sequoia Financial Group Limited ABN 90 091 744 884 and its related bodies corporate (“SEQ”). SEQ makes no representation or warranty with respect to the accuracy, completeness or currency of the content. Any prices published are accurate subject to the time of filming and shouldn’t be relied upon to make a financial decision. Commentators may hold positions in stocks mentioned and companies may pay FNN to produce the content at times. The content is for educational purposes only and does not constitute financial advice. Independent advice should be obtained from an Australian Financial Services Licensee before making investment decisions. To the extent permitted by law, SEQ excludes all liability for any loss or damage arising in any way including by way of negligence.