HYCM: Will this be an Earnings Season to Remember?

Meanwhile, Citigroup Inc., which also reported earnings on April 14, announced Q1 earnings of $1.86 per share, beating the broader market’s expectation of $1.66. Citigroup’s revenues also surprised to the upside, coming in at $21.44 billion for Q1 to analyst estimates of $17.91 billion. This represents a 12% improvement over last year’s figures.

Both stocks gapped up on positive earnings news, but still have a way to go if they’re to convince investors that a change of trend is in effect. The story is that regional bank uncertainty is positive for these large caps, which are perceived as much safer places to deposit cash. However, higher rates are weighing on appetites for credit, and uncertainty regarding the broader economy still looming.

JPMorgan’s recent gap higher takes it above its 50% Fibonacci retracement level and back into the range it has been trading in for most of 2023. Meanwhile, Citigroup’s own recent gap up took it right to its 23.6% Fibonacci level, which acted as resistance back in November of last year.

Keep an eye on the $143 level on JPMorgan and the $53 level on Citigroup, as breaks above these levels could suggest that the uptrend following last October’s lows is still intact.

Be sure to stay posted on how this all-important earnings season unfolds by visiting HYCM Lab, your trusted source of market fundamentals, live analysis, opinion, and education.

Netflix & Tesla Gap Down

Netflix pipped Q1 consensus earnings expectations when it repored on Tuesday, April 18. The leading streaming service announced earnings per share of $2.88 to Wall Street’s expectations of $2.86, however it narrowly missed revenue forecasts. The company’s Q1 revenues came in at $8.16 billion to an expected $8.17 billion.

It also disappointed in its new subscriber numbers, with a reported new subscriber count of 1.75 million for the quarter, about half a million fewer than expected.

The company’s stock gapped-down by almost 4%, from $335 to $323 on the following trading day, but has since recovered slightly to $328 and appears to be attempting to close the gap

Tesla reported slightly lower than expected figures on Tuesday, April 18 after markets closed. Earnings per share came in at $0.85, delivering an expected 20% year-over-year decline as expected, on lower than forecast revenues of $23.3 billion.

Tesla shares gapped down following the narrow miss. The price of the leading EV manufacturer’s shares falling by over 9%. Margins were in the spotlight, as the company’s gross margins were shown to have dropped to 19.3% in the previous quarter from 29.1% in Q1 of 2022. This is following a series of price cuts to the company’s EV fleet so far in 2023.

The company also spoke of the likelihood of further cuts in store, as well as for the need to streamline its newest factories and reduce logistics costs. This is precisely the sort of negative forward guidance that investors are primed to react to at the moment, with markets particularly sensitive to any sign that the US economy is slipping into a recession.

The broader economic climate may be a headwind, but a ramp up in production, the introduction of its Semi- and Cybertruck models, as well as solid performance from its energy generation, storage and services segment remain positive for the company’s prospects going forward.

Both stocks were trading between their respective 23.6% and 38.2% Fibonacci retracement levels after having set a number of lower-highs and higher-lows since February. This narrowing of ranges usually means a decisive moment could be approaching. The disappointment market participants have expressed since Tesla’s earnings report is reflected in the fact that its stock has since broken below its own 23.6% retracement level to set a new daily lower-low.

HYCM Stocks Offering

HYCM clients can trade stock CFDs on major names including JPMorgan, Citigroup, Netflix, Tesla and more. In addition to that, as part of its on-going commitment to the equities investors, HYCM will be announcing a major addition to its existing stocks offering in the nearest time.

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