The stock market experienced a mixed bag of corporate earnings, with some companies surpassing expectations while others fell short. Netflix (NFLX, Financial) reported a mixed quarter with a miss on GAAP EPS but beat revenue expectations, leading to a modest rise in shares. The company's Q4 revenue growth was attributed to paid sharing, recent price changes, and a strong content slate. Despite a slight decline in expected paid net additions for Q1, the overall numbers were up year over year.
In the tech sector, Baidu (BIDU, Financial) saw its shares climb over 7% following positive news for Chinese tech companies. Alibaba (BABA, Financial) also enjoyed a surge in stock price after reports that co-founder Jack Ma and Chairman Joe Tsai have been accumulating shares, signaling confidence in the company's future.
Homebuilder stocks, however, took a hit after D.R. Horton (DHI, Financial) reported lower-than-expected sales orders, causing a ripple effect across the sector. The iShares U.S. Home Construction ETF (ITB) and stocks such as PulteGroup (PHM), Lennar (LEN), KB Home (KBH), Toll Brothers (TOL), and NVR (NVR) all experienced declines. This downturn was compounded by reduced bets on a Federal Reserve interest rate cut.
Tesla (TSLA, Financial) is set to report Q4 earnings, with investors keenly watching the gross margin line after recent price cuts. The company's production guidance for 2024 and updates on AI and robotics are also highly anticipated.
Merck (MRK, Financial) maintained its quarterly dividend, reflecting stability, while Wells Fargo (WFC, Financial) also declared a consistent dividend. Boeing (BA, Financial) faced quality control issues with its 737 Max 9 planes, leading to a bulletin for suppliers to ensure proper bolt tightening.
As the political landscape focuses on China, Goldman analysts suggest volatility hedges for stocks with high China exposure. Plug Power (PLUG, Financial) saw a significant rise after announcing a $1.6B loan facility from the Department of Energy to support hydrogen production facilities.
Chevron (CVX, Financial) was downgraded due to execution concerns, while Exxon Mobil (XOM, Financial) was upgraded for its resiliency. Goldman Sachs provided hedging strategies for potential tech sector drawdowns, and managed care firms like UnitedHealth (UNH, Financial) and Humana (HUM, Financial) faced pressure after reporting increased medical care utilization.
TKO Group (TKO, Financial) enjoyed a boost after announcing a deal with Netflix (NFLX, Financial) and appointing Dwayne "The Rock" Johnson to its board. Meanwhile, United Airlines (UAL, Financial) and Verizon (VZ, Financial) saw gains after positive earnings reports, and Lockheed Martin (LMT, Financial) reported a slight dip in sales.
3M (MMM, Financial) shares dropped after providing a lower-than-expected earnings forecast for 2024, despite a strong fourth quarter. Investors are also keeping an eye on GSK (GSK, Financial) amid ongoing litigation over its Zantac medication. Lastly, Solid Power (SLDP, Financial) announced a stock repurchase program, signaling potential value in its shares.
