Heading into Thursday's cash market, conditions don't appear to favor stocks in general or tech favorites in particular. After the close Wednesday, a couple of heavyweights reported second quarter results that fell short of market expectations. Tesla (TSLA) and Alphabet (GOOGL) are sending not-so-subtle notice that stocks may be - big surprise - a bit overvalued.
Chipping in to the downside thrust, Texas Instruments (TXN) reported better-than-expected results and raised guidance, but the market isn't buying it, sending shares lower by four percent in the pre-market.
IBM added injury to insult, having already warned about a decline in service revenue, posting second quarter revenue of $17.16 billion, up 1% from a year earlier. Adjusted earnings per share were $2.93. Analysts had expected revenue of $17.58 billion and adjusted earnings of $2.97 per share, according to CNBC. The stock is down two percent prior to Thursday's open.
Alphabet (GOOGL), recently added to the Dow, is the main focus this morning, with investors still skeptical about capex levels the company has committed to for the remainder of this year and into 2027 and 2028. Alphabet is the leading hyperscaler, the moniker given to companies that are spending heavily on data center buildout in order to manage the huge demands of AI in business and consumer markets. While most of these projects are moving forward, there's also a movement afoot locally and to a degree nationally, to ban or bar data center construction due to excessive demands on the electrical grid and local water supplies.
Google, Amazon, Microsoft and others plan on a massive expansion of computing capacity, while analysts fail to see profitability on the horizon, which remains the primary roadblock in terms of share prices. Alphabet, after posting what were generally positive results, is trading lower by about five percent in the pre-market.
Tesla (TSLA) is another company on the capex roller coaster, though to a much lesser extent than the hyperscalers. CEO Elon Musk is committing more than $25 billion to expansion this year, minuscule compared to the $200 billion exposure at Alphabet. Tesla plans continued investments into self-driving cars and robo-taxis and is committed to AI and robotics initiatives.
Thursday, before the open, American Airlines (AAL) reported a positive quarter with EPS at 15 cents per share against estimates of a mere three cents. The company lowered guidance, however, as high jet fuel prices continue to put pressure on margins and proit.
Defense contractor, Lockheed Martin (LMT), beat on EPS and issued better guidance, sending shares higher by about five to six percent. Another bright spot was farm and garden retailer, Tractor Supply (TSCO), which beat estimates and is trading two percent to the upside.
The overall market picture is clouded by tech, however. The current investing environment doesn't seem to need much of a story to commence selling, and the first miscues in the tech sector have set off enough alarm bells to send everything into what could become an equity maelstrom. Adding to the malaise is the continuation of hostilities in the Middle East as recent tit-for-tat assaults by Iran and the United States have send oil prices through the roof again. WTI crude oil has topped $90 a barrel this morning. With the Strait of Hormuz essentially closed to commercial traffic and the U.S. and Western allies having already drained the bulk of their strategic reserves, the outlook for oil prices is not good, with estimates ranging from $100 to $150 per barrel near term, depending on the length of the conflict and degree of destruction by the warring parties.
In general, Thursday is shaping up as a major selling event. Dow futures at 9:00 am ET are down 540 points. NASDAQ futures are down 408, with S&P futures off 75 points.
Gold and silver are being slapped lower, though that condition of not being a safe haven in times such as these, is largely the result of manipulation at the COMEX and LBMA. The fiat riggers can't stand to lose, but their days are numbered. When their control cartel is finally vanquished, prices for precious metals will become, well, "precious."
Piling onto the worry wall are treasury notes and bond yields. The 10-year spiked to 4.70%, with the 30-year bond at 5.15%.
The unpleasant reminders that prices, valuations, and being naughty or nice to your neighbors still matters is not about to be lost on this market.
At the Close, Wednesday, July 22, 2026:
Dow: 52,218.58, -6.06 (-0.01%)
NASDAQ: 25,690.90, -146.30 (-0.57%)
S&P 500: 7,498.96, -10.24 (-0.14%)
NYSE Composite: 23,919.71, +29.53 (+0.12%)
Posts
No comments:
Post a Comment