Netflix Earnings and Apple Sales Boost Wall Street Indices: Wall Street stock indexes saw a significant
rise as traders continued to analyze major company earnings, leading to the longest weekly rally of 2024.
These gains were driven by strong earnings reports from Netflix and Apple, bolstering the market’s upward trend.

Table of Contents

Strong Performance of Stock Indexes

Netflix Earnings and Apple Sales

Magnificent Seven” Profits Strengthen the Rally

Impact of the U.S. Elections on Markets

Performance of U.S. Stock Indices

Future Outlook and Cautious Sentiment

Economic Outlook Post-Election

Positive Environment for U.S. Stocks

Challenges for the Technology Sector

Challenges for the Magnificent Seven Index

Economic Growth and Market Sustainability

Strong Performance of Stock Indices

Wall Street traders led stocks into the longest weekly rally of 2024 as they reviewed company earnings
and signals indicating the resilience of the world’s largest economy.
On the 37th anniversary of Black Monday (when the market crashed in 1987),
stock indexes reached all-time highs, with gains across most major sectors.
The S&P 500 rose for the sixth consecutive week,
while an equal-weight index that gives Target the same weight as Microsoft hit a record high,
as investors hoped the rally would broaden.

Netflix Earnings and Apple Sales

Netflix shares surged 11% after the announcement of strong earnings,
while Apple shares rose 1.2% due to increased sales of its latest iPhones in China.
In contrast, American Express shares fell 3.2% after lowering its revenue forecasts.

Magnificent Seven” Profits Strengthen the Rally

Most of the profit growth in the S&P 500 index comes from the large-cap
companies known as the Magnificent Seven (Apple, Tesla, Microsoft, Nvidia, Alphabet, Meta, Amazon).
According to Bloomberg Intelligence, these companies are expected to report an 18% earnings growth in the third quarter.
In comparison, other companies in the index are expected to see only a modest 1.8% increase.

Economic Outlook Post-Election

Although optimism returned to the markets this week,
uncertainty surrounding the U.S. elections continues to affect overall sentiment.
The Ned Davis research index, which measures trading sentiment,
shows that each time optimism rises in an election year, stock performance is average during the election period.
However, the market may experience a post-election rally if political uncertainty persists.

Positive Environment for U.S. Stocks

David Lefkowitz of UBS Global Wealth Management stated that
the environment remains favorable for U.S. stocks, noting that earnings growth is expanding significantly.
While the election adds a layer of uncertainty,
it is unlikely to drastically change the overall market environment.

Challenges for the Technology Sector

As investors await results from major tech companies,
Quincy Krosby from LPL Financial noted that a slight pullback in performance
could provide some support as the earnings season approaches.
Meanwhile, Chris Senyek from Wolfe Research suggested that major companies must
outperform elevated earnings expectations to maintain market leadership.

Challenges for the Magnificent Seven Index

Ed Yardeni, founder of the research firm bearing his name,
raised questions about whether the S&P 439 index (which excludes the Magnificent Seven) could outperform it.
While the Magnificent Seven have shown strong performance,
their stocks have been volatile due to concerns about valuations and slowing growth rates.

Economic Growth and Market Sustainability

David Donabedian from CIBC Private Wealth US said, “The sustainability of the bull market in stocks is improving.”
He noted that third-quarter earnings were strong, and economic data continues to point to growth.
Additionally, retail sales this week exceeded expectations,
indicating that consumers are still spending and the market’s positive performance is expanding.

Looking ahead to next week, Tesla faces challenges during its earnings call.
Investors expect answers regarding production goals and regulatory issues,

particularly after the much-promoted Cyber Cab (self-driving taxi)

failed to inspire investors and ease concerns about recent vehicle sales.

Meanwhile, Boeing will need to reassure investors who are increasingly worried about production delays,
labor disputes, and depleted financial resources. Reports from United Parcel Service,
Norfolk Southern Corp and Southwest Airlines are expected to reveal
the combined impact of Hurricane Helen and a three-day port
workers’ strike on the East Coast during the last quarter.

Netflix Earnings and Apple Sales Boost Wall Street Indices

Netflix Earnings and Apple Sales Boost Wall Street Indices

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