US OPEN: Alphabet joins $1 trillion market cap club

3:43 PM 17 January 2020

  • US indices poised to open higher at fresh records

  • USD gains on solid housing market data

  • Alphabet (GOOGL.US) joins $1 trillion market capitalization club

US indices finished yesterday’s session at fresh records and are poised to open even higher today. The US dollar caught a bid following the release of housing market data for December. While building permits turn out to be slightly weaker than expected (-3.9% MoM vs exp. -1.5% MoM), a major beat was spotted in housing starts that. Those came in at 1608k, marking a massive 16.9% MoM jump. It was the biggest monthly increase since October 2016.

US2000 continues march higher. The index finished yesterday’s trading within resistance zone ranging above 1700 pts mark. Index futures are making a break above the zone today ahead of session open as upbeat moods persist and are additionally boosted by strong housing market figures. Should bullish sentiment prevail, the index may test its only remaining resistance next week - all-time high at 1745 pts. Source: xStation5

State Street (STT.US), one of the largest asset management companies in the world, reported earnings for Q4 2019 today ahead of the opening bell. Return on average equity of 11.6% was higher than median estimate (10.3%). Q4 fee revenue increased 3.5% YoY to $2.37 billion while full Q4 revenue stood at $3.05 billion. Assets under management increased 24% YoY to $3.12 trillion. EPS of $1.73 was 3% higher than median estimate and 66% higher than a year ago.

Schlumberger (SLB.US) also reported Q4 2019 earnings today. The US oilfield services company reported Q4 EPS of $0.39 (exp. $0.37). Revenue grew 0.6% YoY to $8.23 billion (exp. $8.14 billion). Business in North America underperformed as revenue from the region dropped 13% YoY. Schlumberger managed to increase sales in all other markets. Company expects 2020 CapEx to reach around $1.7 billion, lower than market consensus of $1.85 billion.

Rally on shares of Schlumberger (SLB.US) was halted by the resistance zone ranging below $41 handle. The stock pulled back to the upward trendline, that is additionally strengthened by the 50-session moving average (green line). However, quite a solid earnings report for Q4 may boost sentiment towards the stock. In such a scenario, traders should focus on the $41. Source: xStation5

Alphabet (GOOGL.US) became the third US company to surpass a market capitalization of $1 trillion. The two other such companies are Apple (AAPL.US) and Microsoft (MSFT.US). Based on yesterday’s closing price, Amazon (AMZN.US) is worth $931 billion and is likely to be the fourth US company to break $1 trillion mark. Four of the aforementioned companies account for around 16.5% of S&P 500 market capitalization.

Twitter (TWTR.US) is making moves in the pre-session trading following a downgrade it has received at UBS. Stock was cut from “buy” to “neutral”. The Bank said that ongoing investments will act as earnings headwinds throughout 2020. Price target was cut from $37 to $35.

Twitter (TWTR.US) still has not recovered from a major share price drop that followed previous earnings release. The stock climbed above 23.6% Fibo level of the downward move started in September 2019. Company is likely to trade under pressure today due to a downgrade it has received at UBS. The nearest support zone to watch ranges below the aforementioned Fibo level. Source: xStation5

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