Tesla’s profits plummet, but Cybertruck delivery approaches. Netflix jumps late
Dow Jones futures rose slightly in after-hours trading, while S&P 500 futures and Nasdaq futures also rose. tesla (TSLA) missed a revenue estimate but said Cybertruck deliveries will begin next month. Netflix (NFLX) soared following the results.
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Wednesday’s stock market rebound came as the 10-year U.S. Treasury yield rose to a record high, nearing 5%. Weak earnings and outlook also weighed on stock prices. Major indexes fell below several key levels.
After the close, Tesla’s revenue fell more than the decline in views, but the EV giant said Cybertruck deliveries would begin in November. TSLA stock rose slightly after falling sharply in Wednesday trading, as a conference call loomed.
Netflix was a latecomer to jump on the back of better-than-expected revenue and subscriber growth, as well as plans to raise prices.
ram research (LRCX) exceeded views, but LRCX decreased.Ram performance and major chip gear buyers taiwan semiconductor (TSM) is expected to be announced Thursday morning. KLA Co., Ltd. (KLAC) and applied materials (Amat).
meanwhile, costco wholesale (COST) CEO Craig Jelinek will step down effective January 1 and be replaced by COO Ron Vachris. COST stock fell slightly.
Tesla stock is included in the IBD 50.
Dow Jones futures today
Dow Jones futures rose 0.1% to fair value. S&P 500 futures rose 0.15%. Nasdaq 100 futures rose 0.2%. Tesla, Netflix, and LRCX stocks are all members of the S&P 500 and Nasdaq 100.
Federal Reserve Chairman Jerome Powell is scheduled to comment at the New York Economic Club around noon Thursday. Although several policymakers have suggested there is no need for the Fed to raise rates further, Powell could leave the door open.
Please note that overnight trades such as Dow futures do not necessarily translate into actual trades in the next regular stock market.
IBD experts analyze leading stocks and markets on IBD Live.
stock market rise
Stock market gains came under further pressure on Wednesday, with major indexes falling below key levels. The yield on the 10-year U.S. Treasury rose nearly six basis points to 4.9%, hitting a 16-year high of 4.93% during the day. united airlines (UAL), JB Hunt Transport (JBHT), ASML (ASML), morgan stanley (MS) and telex (TEX) has been sold on earnings and prospects, and many related companies are also struggling.
The Dow Jones Industrial Average fell 1% in stock market trading Wednesday, falling below its 200-day moving average. The S&P 500 index fell 1.3%, below its 21-day line. The Nasdaq Composite fell 1.6%, falling from its 50-day line to below its 21-day line and below last Friday’s low.
The next big level for the Nasdaq is the follow-through day low on October 6th. A close below that level would be a strong signal that the rally will fail.
Market breadth was decidedly weaker after the advancers scored a small win on Tuesday.
The small-cap Russell 2000 fell 2.1%, more than offsetting Tuesday’s 1.1% gain. Invesco S&P 500 Equal Weight ETF (RSP) fell 1.6%.
Major stocks generally struggled, and most of the solid stocks also fell.
The big exception was the energy sector, where oil stocks rose along with oil prices. US crude oil prices rose 1.9% to $88.32 per barrel. Gasoline futures rose 3%.
ETF
Among growth ETFs, Innovator IBD50 ETF (FFTY) fell 2%. The iShares Expanded High-Tech Software Sector ETF (IGV) fell 1.5%. The VanEck Vector Semiconductor ETF (SMH) fell 2%. LRCX stock, ASML, KLAC, AMAT, and TSM are all SMH components.
Reflecting more speculative story stocks, the ARK Innovation ETF (ARKK) and ARK Genomics ETF (ARKG) both fell 4.5%. Tesla stock is the No. 1 holding among Ark Invest’s ETFs.
The SPDR S&P Metals Mining ETF (XME) fell 2.6% and the Global XUS Infrastructure Development ETF (PAVE) fell 3.7%. The U.S. Global Jets ETF (JETS) fell 4.4%. The SPDR S&P Home Builders ETF (XHB) fell 3.3%. The Energy Select SPDR ETF (XLE) rose 0.9% and the Healthcare Select Sector SPDR Fund (XLV) fell 0.9%.
The Industrial Select Sector SPDR Fund (XLI) fell 2.4%.
The Financial Select SPDR ETF (XLF) fell 1.7%. The SPDR S&P Regional Bank ETF (KRE) fell 2.7%.
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tesla revenue
Tesla’s earnings fell 37% to 66 cents a share, its worst EPS in two years, and the company’s 73 cent decline in guidance was also overlooked. Revenue rose 9% to $23.35 billion, which also fell short of viewership.
Analysts lowered their EPS estimates for Tesla after the electric vehicle giant reported a larger-than-expected decline in third-quarter vehicle deliveries compared to the second quarter.
Tesla’s gross profit margin fell to 17.9%, compared to 18.2% in the second quarter and 25.1% in the same period last year. Tesla continued to cut prices in the third quarter, dropping even further this month.
Operating profit decreased by 52%.
In Tesla’s earnings call, the company said it plans to produce about 1.8 million vehicles again this year.
TSLA stock bulls will be watching for results in the third quarter and beyond, pinning their hopes on the Cybertruck and other potential growth drivers.
The EV maker said deliveries of the Tesla Cybertruck will begin next month, with a delivery event to be held on November 30th. But it’s unclear when meaningful distribution will begin. Important questions such as price, battery life, and other specifications remain unclear.
Investors and analysts are looking for more clarity on Cybertruck and Tesla’s earnings releases, and Elon Musk’s comments will be key.
Tesla shares rose slightly in overnight trading.
The stock fell 4.8% to 242.68 on Wednesday, below its 50-day line. The base of the stock is 278.98 on a cup base with handle. Investors may use the October 10 high of 268.94 as an early entry.
Three EV startups riding the Tesla wave become penny stocks
Netflix revenue
Netflix added 8.76 million streaming subscribers, significantly increased viewership, and recorded record revenue. Income was good.
NFLX stock soared in overtime. Shares fell 2.7% to 346.19 on Wednesday, capping off a massive bull market that began five months ago.
Ram Research Revenue
Lam Research’s earnings were solidly above expectations for the fourth quarter, and so was sales. Chip equipment makers expected a slight increase in the first quarter.
LRCX stock fell slightly in overnight trading. Shares fell 1.2% to 642.24 in Wednesday trading, despite ASML warning before the move that 2024 profits would be flat. According to MarketSmith analysis, the consolidation buy point for LRCX stock is 726.52. There is a possibility of early entry from a decisive move above last week’s high and above the 50-day line.
KLAC and AMAT shares edged lower after both falling about 1% on Wednesday. Both are holding up well short of their buy points.
Taiwan Semiconductor’s financial results are scheduled to be announced tonight. On Wednesday, TSM stock fell 1.5%, falling below the 50-day line and below the 200-day mark. A major foundry that manufactures semiconductors for Nvidia. apple (AAPL) and other large chip equipment buyers. Therefore, the results, guidance and spending plans are important for this sector.
Timing the Market with IBD’s ETF Market Strategy
what to do now
This is a time when you need to interact with your patients. Market bulls can rise decisively relatively quickly. But that hasn’t happened yet, and the Nasdaq now appears at increased risk of a decisive decline.
Once the market gets back on track, there will be plenty of buying opportunities soon. Therefore, investors should be prepared. Keep your watchlist up to date, keep an eye on the market, and be ready to act.
But don’t act yet. Don’t get excited about indexes and major stocks moving within recent ranges. While many stocks performed well, there were also stocks that fell sharply on Wednesday.
U.S. bond yields, tensions in the Middle East, and earnings season all have the potential to be negative for markets and individual stocks, and there are clear downside risks. It’s hard to see sustained market gains when U.S. Treasury yields are rising.
Your exposure should be small to moderate at most, with the ability to scale out if your position or the market as a whole takes a turn for the worse.
Read The Big Picture every day to stay on top of market direction and key stocks and sectors.
X/ Follow Ed Carson on Twitter. @IBD_ECarsonstock market updates and more, check out @edcarson1971’s thread and @edcarson.bsky.social’s Bluesky.
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