Stocks Mixed as Apple Down, Amazon Up on Earnings: Markets Wrap

(Bloomberg) — Wall Street traders hoping for a clear direction on stocks after Thursday’s selloff didn’t get that in late hours amid a mixed bag of earnings from a pair of tech heavyweights.

A roughly $300 billion exchange-traded fund tracking the Nasdaq 100 (QQQ) struggled for direction after the close of regular trading. Apple Inc., the world’s most valuable company, fell 2% after reporting weaker-than-anticipated sales in China. Amazon.com Inc. climbed 4% on a bullish forecast. Intel Corp. jumped 9% as its outlook sparked optimism over a turnaround effort.

In regular hours, a 1.9% slide in the S&P 500 wiped out the gauge’s advance for October, halting a streak of monthly gains that would have been the longest since 2021. The Nasdaq 100 dropped 2.4%. Disappointing outlooks from Microsoft Corp. and Meta Platforms Inc. fueled concern that a nearly 45% surge in the megacaps that have powered the bull market might have gone too far.

“Halloween is bringing tricks, not treats to many investors,” said Steve Sosnick at Interactive Brokers. “The market’s mindset seems to be switching from one where anything AI-related was a reason for enthusiasm towards one where investors are looking for some returns on their massive spending.”

Those worries hit a market showing signs of exhaustion near record highs ahead of next week’s US election and the Federal Reserve decision. Moreover, there’s a nearly palpable narrative taking hold that the election – rather than offering a sense of certainty – will cause volatility to spike, noted Quincy Krosby at LPL Financial. That’s not to mention the jobs report on Friday. 

Treasuries saw their biggest monthly loss in two years on bets the Fed won’t be too aggressive with rate cuts amid a strong economy. The dollar notched its best month since 2022.

The yen jumped as much as 1%, extending gains seen after Bank of Japan Governor Kazuo Ueda said that currency markets have had a major impact on the economy, pointing to another potential rate hike in coming months. Chancellor of the Exchequer Rachel Reeves sought to reassure the financial markets after her budget on Wednesday triggered a selloff in UK bonds.

Oil surged on a report Iran is planning a fresh attack on Israel. Gold retreated as some investors booked profit after the metal’s rally to a fresh record.

Investors need to make sure they have diversification within tech and that they are not solely invested in the parts of the AI trade that have worked such as semiconductors, according to Michael Landsberg, chief investment officer, Landsberg Bennett Private Wealth Management.

“It makes some sense to trim some from those names that have worked so well over the past 12-18 months and look for AI laggards as well as other tech themes like cybersecurity, robotics and automation, and smart homes and cities,” he said.

Equity bulls bracing for a string of market-moving events in the next couple of days have favorable seasonality on their side.

Over the past 100 years, November has ranked as the fourth-best month for the Dow Jones Industrial Average, with an average gain of 1.3% and positive performance 63% of the time, according to Bespoke Investment Group strategists.

More recently in the past 50 years, it is one of two months (the other being April) in which the index has averaged a gain of more than 2%, they said. In that timeframe, it also traded higher more consistently than any month. Looking only at the past twenty years, November’s 2.43% average gain is only edged out by July’s 2.45% gain for the best month of the year.

Key events this week:

• China Caixin manufacturing PMI, Friday
• US employment, ISM manufacturing, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 fell 1.9% as of 4 p.m. New York time
• The Nasdaq 100 fell 2.4%
• The Dow Jones Industrial Average fell 0.9%
• The MSCI World Index fell 1.5%
• Bloomberg Magnificent 7 Total Return Index fell 3.6%

Currencies

• The Bloomberg Dollar Spot Index fell 0.2%
• The euro rose 0.2% to $1.0878
• The British pound fell 0.5% to $1.2895
• The Japanese yen rose 1% to 151.93 per dollar

Cryptocurrencies

• Bitcoin fell 3.9% to $69,961.73
• Ether fell 6.3% to $2,509.89

Bonds

• The yield on 10-year Treasuries declined two basis points to 4.28%
• Germany’s 10-year yield was little changed at 2.39%
• Britain’s 10-year yield advanced nine basis points to 4.45%

Commodities

• West Texas Intermediate crude rose 2.8% to $70.54 a barrel
• Spot gold fell 1.5% to $2,747 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Robert Brand.

©2024 Bloomberg L.P.