Investors Book Some Profits to Start a New Trading Week

Monday, October 21st, 2024

Markets took a breather today from setting new closing highs. The Dow shed -344 points on the day, -0.80%, while the S&P 500 sold off a much smaller -0.18%. The tech-heavy Nasdaq posted a gain of +0.27% on the session, with the small-cap Russell 2000 down a more severe -1.59%.

U.S. Leading Economic Indicators (LEI) for September came out earlier today, with results worse than expected: -0.5% on headline, lower than -0.3% expected and the revised reported -0.3% figure a month earlier. As the name suggests, “leading” indicators tends to look for early changes to the economic cycle. By this metric, LEI are headed down somewhat.

Part of the relative success of the Nasdaq today was in big tech names like NVIDIA (NVDA Quick QuoteNVDA - Free Report) , which finished up more than +4% on the day, to a new all-time closing high of $143.71 per share.  The stock also shot up to highs of the session right at the closing bell, and is now up +190% year to date.

Keep in mind NVIDIA does not report earnings until the very end of the earnings season cycle. That said, the stock has climbed impressively off near-term lows back in early September. The AI trade is still quite legitimate, even if it’s not the massive headline-grabber it was at the start of the year.

SAP Grows After Q3 Numbers on Good Guidance

German-based enterprise software developer SAP (SAP Quick QuoteSAP - Free Report) reported basically in-line earnings and revenue results after today’s close, but is seeing its share price rise in late trading on stronger-than-expected Q3 results. Though total revenues year over year were “just” +9%, its Cloud revenue estimates are for +25% growth. Current cloud backlog is also +25% in today’s statement.

SAP may be seen as something of a precursor to other enterprise software producers expected to report later this week, such as IBM (IBM Quick QuoteIBM - Free Report) and ServiceNow (NOW Quick QuoteNOW - Free Report) . Zacks Rank #3 (Hold) ratings are currently tied to both SAP and IBM, but ServiceNow carries a Zacks Rank #2 (Buy).

Check out the updated Zacks Earnings Calendar here.

Tuesday morning brings us some key Q3 earnings reports, including GE Aerospace (GE Quick QuoteGE - Free Report) , General Motors (GM Quick QuoteGM - Free Report) , Verizon (VZ Quick QuoteVZ - Free Report) and Lockheed Martin (LMT Quick QuoteLMT - Free Report) . All of these stocks currently rate a Zacks Rank #3 as of this afternoon. No economic data is expected tomorrow, just an appearance after the opening bell by Philly Fed President Patrick Harker.

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