The Stage Is Set for a Market Pullback Following Apple and Amazon Earnings
Can the market continue its impressive winning streak Friday? There's a lot riding on earnings conference calls and the all-important jobs report.
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Earnings results from Microsoft MSFT and Meta META helped to drive the S&P 500 to its eighth straight day of gains Thursday, but Apple AAPL and Amazon AMZN will have to deliver to make it nine. In addition, the market faces the April jobs report Friday morning, which will provide clues about whether the tariff turmoil is impacting the employment market.
It was a solid day for the broader market that started with a rotation out of small stocks and into the Magnificent Seven MAGS names. The Mag 7 held on to its gain of about 3%, and dip buyers showed up and bought some of the early weakness in small-caps, biotechnology, and other lagging groups. Breadth finished at around 6,000 gainers to 3,700 decliners.
The close was near the lows of the day probably due to nervousness about the upcoming news flow combined with overbought technical conditions.
Amazon beat on both the top and bottom lines, but they are not big beats, and guidance for next quarter appears a little light. The stock is down about 5% on the news initially, but the conference call will be key. Amazon stock has a history of coming back from an initial negative response to its earnings report, but the company faces some major challenges as it navigates tariffs on its supplies, particularly in China.
Apple has small beats on the top and bottom lines, with EPS of $1.65 versus estimates of $1.62 and revenue of $95.4 billion versus $94.75 billion. Expectations were pretty low, but we have to wait for the conference call to get the details and guidance. The initial reaction is negative, with the stock slipping about $5 so far.
With the indexes extended after an eight-day winning streak and the important jobs news Friday morning, conditions are ripe for a pullback. I’ll be looking for some dips to buy, but we are still in an environment where major economic or trade news could hit at any time. Overall, technical conditions are good, but a little pullback would be healthy at this juncture.
Have a good evening. I’ll see you tomorrow.
At the time of publication, Rev Shark had no positions in any securities mentioned.
