Chart of the day - US100 (30.10.2024)

With yesterday's earnings releases by companies such as Alphabet (GOOGL.US), and Advanced Micro Devices (AMD.US), and reports from Microsoft (MSFT.US) and Meta Platforms (META.US) coming today, after the US session - arguably the most important results for Wall Street outside of Nvidia - it's hard not to focus attention on the US100 index today, where the upside from Alphabet's strong report was offset by a negative reaction to chipmaker AMD's results. Now the US100 is slightly down, however the situation may significantly change before the US-session opening. Before the session, Caterpillar and AbbVie will present financial reports. 

• In the wake of AMD's weaker results, Nvidia shares are also losing nearly 1% today before the open, and the broad semiconductor sector may see at least temporary pressure. Alphabet's shares, on the other hand, are gaining nearly 7% before the open, boosting its $2 trillion-plus capitalization by nearly $70 billion.
• In addition to the results of the leading companies in the US (cloud computing, AI and software, and digital advertising), today we will learn the ADP report (12:15 PM GMT) where the market for October expects a change in employment of 110,000, compared to 143,500 in September, in the US private labor market, as well as the GDP and spending reading of Americans (12:30 PM GMT). As a result, market volatility at the opening could be quite high today. The market would probably like to see a fairly solid and in line with expectations ADP and annual GDP dynamics close to 3% annual growth (expectations 2.9% y/y, price index 1.9% y/y after 2.5% y/y in September). Weaker, or in line with expectations, data could weaken the dollar, while an 'up' surprise could push capital back into the dollar, supporting yields.

Alphabet and AMD results

• Alphabet reported a 15% year-on-year increase in revenue, which rose to $88.27 billion, and earnings per share above forecasts ($2.12 vs. $1.84 forecasts). Operating profit was up 28% y/y and Google Cloud revenue was up 35% y/y. Operating margin was a record 32%. The company indicated that next year's CAPEX will be higher than that in 2024 (which seems a positive sign for AI hardware companies).
• In the context of the high valuation, AMD disappointed the 'unofficial' expectations of the markets. Earnings per share came in at $0.9, in line with forecasts, and revenue only slightly beat expectations of $6.71 billion, rising to $6.8 billion (17% y/y growth). Revenue in data centers rose 122% y/y. Despite citing a number of AI catalysts, Q4 revenue is expected to be between $7.2 and $7.8 billion, compared to Wall Street's $7.55 billion forecast. The company raised its annual revenue forecast for AI to $5 billion vs. $4.5 billion expected earlier

US100 chart

The last three upward spurts in the US100 were close to 400 points, and if this situation were to repeat itself, the index is on track to break through the 21,000-point barrier. Buying volumes have prevailed recently, the RSI is over 60 points, but the MACD averages seem 'inclined' to another 'bullish' crossover. In a downward scenario, support should be sought between 20,650 and 20,500 points.

Source: xStation5