Although the main part of earnings season is over and there are only a few notable reports this week, results and guidance continue to reflect shifting investor sentiment.
Despite handily beating street expectations on EPS ($1.46 vs street $1.30), and sales, cybersecurity company Palo Alto Networks plunged in aftermarket trading yesterday afternoon, and currently it is down 24.3% in premarket trading. Cuts to billings and sales guidance for the upcoming quarter and fiscal year sent traders running for the exits. Prior to the news, the shares were up 24.15% year to date and that has essentially been erased overnight. Semiconductor giant and AI play Nvidia*, which is up 40.2% year to date, reports results after the close this afternoon, the last of the “Magnificent Seven” stocks to do so this quarter.
US index futures are down 0.2%-0.7% so far this morning, pointing toward a potential third day of declines for US markets, including drops of 0.1%-0.9% for the major indices yesterday, plus a fall of 1.4% for the small cap Russell 2000 Index. European trading action is mixed with the FTSE down 0.8% and the Dax up 0.3%.
Natural Gas is up 9.1% this morning, popping back from recent declines. Trading in energy and metals is otherwise quiet with US Crude oil down 0.2%, Copper up 0.6%, and Gold flat. Currency action is quiet for the most part except in cryptos where Bitcoin and Ethereum are down 2.1% and 2.5% respectively, suggesting that investors may be dialling back their risk appetite a bit.
*Shares of Nvidia are held in some portfolios managed by SIA Wealth Management.