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

The content of this report has been created by X-Trade Brokers Dom Maklerski S.A., with its registered office in Warsaw, at Ogrodowa 58, 00-876 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. X-Trade Brokers Dom Maklerski S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.

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