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ASML (ASML) earnings were excellent for the AI trade, says D.A. Davison's Gil Luria. He points to commentary from the CEO that the company is struggling to meet demand as a bullish sign for the AI buildout. As for the stock's downside trading action, Gil attributes it to "bad luck" on a day where CPI came in hot. Steven Dickens calls ASML a "classic picks and shovels play" and says its lithography business offers plenty of strength for its outlook. He sees hyperscaler earnings from Microsoft (MSFT), Alphabet (GOOGL), Meta Platforms (META), and Amazon (AMZN) as tech's next big test.
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Ed Siddell breaks down the hotter-than-expected CPI print, arguing that energy rather than monetary supply is driving inflation as Treasury yields climb. He explains how elevated diesel prices and refining bottlenecks are feeding costs throughout the economy. Siddell expects the Fed to hold rates steady in October but sees a potential December hike still on the table.
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Boeing (BA) heads toward earnings with momentum from a fighter jet contract win and a settled union contract. Ben Tsocanos looks at 737 Max 10 and 777X approvals, improving production and the potential for stronger free cash flow as Boeing works through its backlog. Tom White then breaks down the technicals and outlines a bullish call vertical options trade ahead of earnings.
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Options involve risks and are not suitable for all investors. Before trading, read the Options Disclosure Document. http://bit.ly/2v9tH6D
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John Kosar sees warning signs beneath the market as weak volume and breadth leave the rally increasingly dependent on AI stocks and mega caps. He points to defensive rotation into XLC, XLU, and XLE as financials see outflows. Kosar is watching 7,621 as critical S&P 500 (SPX) support, with 8,000 as an upside target and 7,260 as major support.
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Ben Watson of Charles Schwab has his eye on Lockheed Martin (LMT) forming a head and shoulders pattern in its stock chart. He explains how price action can fall back in favors of the bulls. Ben then turns to an example options trade for Lockheed Martin.
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ASML (ASML) showed no signs of slowdown in the AI trade as the Dutch lithography company struggles to meet rampant demand. Jenny Kovacs takes investors through the company's earnings beat and guidance raise to highlight the importance ASML plays in the AI trade. Prosper Trading Academy's Scott Bauer turns to an example options trade for ASML.
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AI chip stocks were looking very good, until now, says Charles Schwab's Nathan Peterson. He says the cohort needs to lead Wall Street for investors to regain confidence after a hot September CPI print raised odds of an interest rate hike. Nate takes a look at how all the volatility continues to batter small caps, the Russell 2000 (RUT), and the greater S&P 500 (SPX). Jim Ferraioli turns to the crypto space as Bitcoin take a downturn with the broader market. Despite the bearish trading action, Jim argues "crypto winter is over" when examining ETF inflows.
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Kevin Green points to core CPI as the true culprit behind investor concerns Wednesday morning, and with energy driving inflation woes. He takes investors through the metrics underneath CPI headline numbers and the shift to a roughly 50% probability of a Fed interest rate hike in October. Crude oil remains volatile as well over war escalations in the Middle East and between Russia and Ukraine. In equities, KG discusses Bank of America (BAC) earnings and the $1.2 billion fine it received from the U.S. Treasury.
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Morgan Stanley (MS) beat on the top and bottom line in earnings but showed weakness in its fixed income business. Barclays downgraded Dell Technologies (DELL), HPE (HPE), and NetApp (NTAP) after all experienced strong rallies this year. Goldman Sachs, Guggenheim, and UBS all adjusted their price targets on Meta Platforms (META). Diane King Hall turns to the biggest market movers starting Wednesday's trading session.
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Expectations for a Fed interest rate hike more than doubled after the September CPI continued to show an inflation uptick. Andrew Plum still believes the long-term outlook for equities remains positive, though the timeline of a turnaround will depend on how quickly the U.S.-Iran war ends. In the meantime, Andrew says gold should be a top investor pick as the U.S. dollar faces ongoing pressure from ballooning national debt.
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