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Tuesday, April 23rd, 2024

Two sessions into the trading week, things are looking up. Since bottoming out Friday afternoon, down as much as -4% in just a couple days, we’re now in the green for three of four major indices as of Tuesday’s close. The Dow picked up +263 points, +0.69%, while the S&P 500 almost doubled that performance, +1.20%. The Nasdaq, the only of these indices still in the red over the past week, gained +245 points today, +1.59%. And the small-cap Russell 2000 outperformed the field for the session, +1.79%.

Tesla TSLA, so far having a crummy 2024, is up +7% following the release of its Q1 results after today’s close. Earnings of 45 cents per share missed the Zacks consensus by a penny, while $21.03 billion in quarterly revenues came up short of expectations of $22.15 billion. Guidance for auto deliveries in 2024 are “notably lower” than they were last year, which was hinted at in its deliveries report a couple weeks ago. So why are shares climbing so nicely on such lousy quarterly numbers?

The answer, as it often is with Tesla, is this: the future. Noted in Tesla’s letter to investors today was the +130% growth in A.I. training, which pertains directly to its “robo-taxi” program — self-driving cars. There is an August 8th event pending on just this topic, which may be just the salve this beaten-down stock needs at this point. The company reported negative free cash flow and more EV competition than ever before. The company also plans to accelerate its development of lower-priced vehicles.

Visa V, on the other hand, beat estimates on both top and bottom lines for its fiscal Q2 this afternoon. Earnings of $2.51 per share outpaced the $2.43 expected (and nicely above the $2.09 per share from the year-ago quarter), with revenues in the quarter of $8.78 billion shooting past the $8.60 billion analysts were looking for. Visa called consumer spending “stable,” with volume +8% and processed transactions +11%. Shares are up +2.5% in late-session trading.

Texas Instruments TXN shares are also up nicely — +5.5% at this hour — on Q1 top and bottom-line beats. Earnings of $1.20 per share easily surpassed the $1.06 in the Zacks consensus, while revenues came in at $3.66 billion, bettering the $3.61 billion anticipated (though still down -16% year over year). Two quarters ago, T.I. posted its first negative earnings surprise in five years. Guidance remained in-line with previous estimates across the board.

Tomorrow brings us more Q1 earnings reports. In the morning, we’ll get Boeing’s BA quarterly performance numbers, with Meta Platforms META, Chipotle CMG, Ford F and IBM IBM all reporting after the bell. We’ll also see Durable Goods Orders for March. Today’s economic prints were mixed: S&P flash PMIs for Services and Manufacturing in April came in lower than expected and below previous-month levels, while New Home Sales notably outperformed expectations.

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