US OPEN: Wall Street opens lower, earnings in the spotlight

• Wall Street indices open lower
• US500 pulls back from the 200-session moving average
• Vertiv Holdings rallies after Q3 2023 earnings

Wall Street indices launched today's cash trading lower. S&P 500 traded 0.4% lower at the opening while Nasdaq and small-cap Russell 2000 dropped 0.8%. Dow Jones was outperformer with a 0.2% gain at the opening. Economic calendar for the afternoon today is light when it comes to stocks - there is Bank of Canada rate decision scheduled for 3:00 pm BST but it is unlikely to trigger any bigger moves on Wall Street.

Source: xStation5

S&P 500 futures (US500) are trading lower today. Taking a look at the US500 chart at D1 interval, we can see that while the index has once again managed to bounce off the lower limit of the Overbalance structure at 4,235 pts, bulls lost steam later on after reaching the 200-session moving average (purple line). Index is pulling back from this moving average slightly today and another test of the aforementioned 4,235 pts support cannot be ruled out. In such a scenario, we would see a potential bearish trend reversal according to the Overbalance methodology and deeper decline may be looming. The next support zone in-line to watch can be found in the 4,200 pts area, where the 38.2% retracement of the year-long upward move lies.

Company News

CoStar (CSGP.US), US provider of analytics and marketing services to the commercial property industry, is plunging today. Drop is driven by disappointing Q3 2023 earnings release. Company reported a 12% YoY jump in Q3 revenue, to $624.7 million (exp. $626 million), as well as adjusted EPS at $0.30 - unchanged compared to a year ago. The most disappointing part of earnings release, however, were Q4 forecasts - company expects revenue to reach $630-635 million (exp. $644 million) as well as adjusted EPS of $0.31-0.32 (exp. $0.35).

Texas Instruments (TXN.US) is trading lower following a disappointing Q4 revenue guidance. Company reported a 14% YoY drop in Q3 revenue, to $4.53 billion (exp. $4.55 billion), driven by a 16% YoY drop in Analog segment revenue. Operating profit at $1.89 billion was 29% YoY lower (exp. $1.92 billion) while EPS dropped from $2.47 in Q3 2022 to $1.85 now. Capital expenditures were 89% YoY higher at $1.50 billion. Texas Instruments expects Q4 revenue to reach $3.93-4.27 billion (exp. $4.49 billion) and EPS to come in at $1.35-1.57 (exp. $1.76)

Vertiv Holdings (VRT.US) rallies following release of Q3 2023 earnings. Company reported net sales at $1.74 billion (exp. $1.75 billion) and adjusted EPS at $0.52 (exp. $0.44). Adjusted operating margin reached 17% while the market expected just 14.7%. Net orders were 11% YoY higher. Vertiv expects Q4 net sales to reach $1.83-1.85 billion (exp. $1.82 billion) and adjusted EPS to come in at $0.48-0.52 (exp. $0.46). Full-year net sales forecast was boosted from $6.71-6.91 billion to $6.83-6.85 billion.

Analysts' actions

• Veeva (VEEV.US) upgraded to "overweight" at Wells Fargo. Price target set at $229.00
• Affirm Holdings (AFRM.US) downgraded to "sell" at Compass Point. Price target set at $13.00
• Etsy (ETSY.US) downgraded to "neutral" at Citi. Price target set at $67.00

Vertiv (VRT.US) has been trading in the sideways move since the beginning of September 2023, with share price moves being largely limited to the $36.00-$40.25 range. Stock jumped above the upper limit of the range following solid Q3 earnings release. Source: xStation5