Thursday, August 15th, 2024
Another big day for the major market indexes. Robust data on Retail Sales, Exports and better-than-expected Jobless Claims all demonstrate that recession fears in the market had gotten ahead of themselves. Even with the idea that a 50 basis point (bps) rate cut by the Fed next month may be off the table — in favor of a 25 bps cut — markets rallied throughout the day.
The Dow closed up +554 points, +1.39%. Yet it is the only major index to have climbed back into positive territory after the precipitous slide of the past two weeks. The Nasdaq gained +401 points today, +2.34%, but is still down more than -4% month to date. The S&P 500 grew by +1.61% and the small-cap Russell 2000 was +2.37% today, but are also still clawing back from their steep recent falls.
Applied Materials Beats on Top and Bottom in Q3
Zacks Rank #2 (Buy)-rated Applied Materials AMAT, an equipment supplier for semiconductor fabrication, posted +12% growth on its fiscal Q3 bottom line year over year, with earnings of $2.12 per share outpacing the $2.01 in the Zacks consensus. Revenues of $6.78 billion in the quarter beat expectations for $6.67 billion, +5% year over year. The company had $2.39 billion in cash from operations, and bought back $861 million in stock and issued dividends totaling $331 million.
Guidance for Q4 improved, as well. Earnings are expected to come in the range of $2.00-2.36 — higher on the top end than the Zacks consensus $2.11 per share. Revenues of $6.93 billion are above the previous consensus of $6.89 billion. Shares are down slightly on the news, -1.3%, but AMAT has earned +37% year to date.
Friday Data Ahead of the Open
Tomorrow morning won’t be as action-packed as this morning was, but we will see some numbers of consequence. Consumer Sentiment for August will be among them, as will Housing Starts and Building Permits for July. Both are expected to tick down from the previous month, on a continuing stiff headwind in the housing market due to higher mortgage rates. We expect these numbers will loosen up somewhat in the coming months, as long as the Fed reduces interest rates.
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