Earnings season is the heartbeat of the market - and every day brings fresh signals about where money is flowing.
With each report, we learn not just how companies are performing, but how investors are reacting.
In the Daily Beat, we spotlight the most important S&P 500 earnings moves from the prior session - the winners, the losers, and the reactions that reveal what really matters to the market right now.
Whether itβs a bellwether with broad economic implications or a niche name making waves, we cut through the noise to focus on the setups that matter most.
Here are the top beats from the S&P 500 π
*Click the image to enlarge it
At the top of Thursday's list was C.H. Robinson $CHRW, an $18B integrated freight & logistics stock. The company reported mixed headline results, but the market rewarded shareholders with a +10.14 reaction score.
In the report, they posted revenues of $4.14B, below the expected $4.23B, and earnings per share were $1.40, above the expected $1.30.
This was CHRW's best earnings reaction since 2007, and the encore to JBHT's recent banger earnings reaction. The transportation industry is beginning to pick up steam after years of underperforming.
As an honorable mention, the $3.4T tech behemoth Alphabet $GOOGL smashed its headline expectations and was rewarded for it. The stock rallied 2.52% and had a reaction score of +2.06.
Revenues came in above $100B for the first time ever, and earnings per share beat by more than 60 cents.
Here are the bottom beats from the S&P 500 π
At the bottom of Thursday's list was the $66B health insurance provider, Cigna $CI. The company beat expectations across the board, but suffered a -8.78 reaction score.
They reported revenues of $69.57B, missing the expected $67.58, and earnings per share of $7.83, below the expected $7.64.
And we'd be remiss not to mention the world's largest software stock: Microsoft $MSFT. Despite beating the headline expectations, shareholders suffered a -1.23 reaction score..
Revenues came in more than $2B above expectations, and earnings per share beat by nearly 50 cents.
Now let's dive into the fundamentals and technicals π
GOOGL had its third consecutive positive earnings reaction π₯
Alphabet had a +2.5% post-earnings reaction, and here's what happened:
The top and bottom-lines increased year-over-year by 16% and 33%, respectively.
The company saw double-digit growth across Google Search, YouTube, subscriptions, and Google Cloud. Additionally, the Google Cloud backlog reached $155B, and paid subscriptions surpassed 300M.
In addition to the excellent report, the management team raised its capital expenditure guidance. This is what the market wanted to see!
We highlighted this setup in the latest Weekly Beat column, noting that the price was breaking out to new all-time highs ahead of Wednesday's earnings report.
In retrospect, it's clear why investors bid the stock up before the report... Because it was flawless!
The company is one of the most well-positioned in the world to win the AI race, and it's clear the market agrees with this view right now. Shareholders are consistently being rewarded for the earnings events, and we don't anticipate that will change soon.
With GOOGL trading at new all-time highs, the path of least resistance is decisively higher for the foreseeable future.
MSFT has been punished for four of its last six earnings reports π»
Microsoft had a -2.9% post-earnings reaction, and here's what happened:
The top and bottom-lines increased year-over-year by 18% and 12%, respectively.
Microsoft Cloud revenue grew 26% year-over-year. This was driven by commercial bookings surging 112% year-over-year, driven by Azure commitments from OpenAI.
Like GOOGL, the MSFT management team increased its forward guidance for capital expenditures. While this is pressuring margins in the short-term, the market wants them to do it for the potential long-term gain.
We also highlighted this setup in the latest column of the Weekly Beat, noting that despite the company beating its headline expectations every quarter, the market has punished shareholders in about half of its earnings events over the past three years.
This quarter was another beat/beat/drop for the world's largest software stock, and the technicals look vulnerable.
Ahead of Wednesday's earnings event, the price was surging out of a textbook consolidation pattern. However, the buyers have given back all of those gains, and now a potential failed breakout is in play.
And as the legendary Brian Shannon says, "From failed moves, come fast moves in the opposite direction."
Until MSFT makes a decisive move, the path of least resistance is sideways for the foreseeable future.
Happy Halloween! π
-The Beat Team
P.S. The Federal Reserve met on Wednesday, and Jason Perz, Sam Gatlin, and Spencer Israel went LIVE to talk about it on Stock Market TV.
