Yahoo Finance Bond Yields Squeezing Equities; NFLX, LRCX, LVS Beat, TSLA Misses
It was a tough day for stock market indices today, competing as it is with U.S. Treasury bond yields at their highest levels in over a decade and a half. Both the 2-year and the 10-year — which remains an inverted yield curve, and has for about a year and a half — increased from already high levels: the 10-year reached 4.91% today, its loftiest perch since March 2007 (a few months prior to the Bear Stearns bankruptcy), and the 2-year hit 5.22% — its biggest payout since December 2000!
The markets had no chance to recover from this. The Dow shed -327 points, -0.96%, and it outperformed the other major indices on the day. The S&P 500 was next, -1.35%, while the Nasdaq lost -219 points, -1.62%. The small-cap Russell 2000 — which had been bouncing back of late but has taken these bond yields particularly hard — sank -2.11% in Hump Day trading today. All these indices are down for the past week and between -2.5% (Dow) and -5.4% (Russell) over the past month alone.
Maybe Q3 earnings results will cheer everybody up? Maybe not. Tesla TSLA, as predicted, posted misses on both top and bottom lines for the quarter, with earnings of 66 cents per share missing the 73 cents in the Zacks consensus (and well off the $1.05 reported in the year-ago quarter), and revenues of $23.35 billion missed the estimate of $24.38 billion. This was on quarterly deliveries down -7%, which had been previously reported. Tesla shares sold off nearly -5% in regular trading today, but are up marginally in the after-hours.
Netflix NFLX, on the other hand, made a case for it being the only, or one of the only, irreplaceable home streaming services, as it easily beat expectations on its Q3 bottom line: $3.73 per share versus expectations for $3.46 (and the $3.10 per share posted a year ago). Net adds amounted to 9 million in the quarter, with global paid subscriptions +10.8% year over year. Netflix also announced a price hike: to $11.99 for regular and $22.99 for premium service. Even at the low end, that’s nearly double what Apple (AAPL) charges per month for streaming. Shares of NFLX are up +12% on the news in late trading.
Lam Research LRCX also surpassed expectations easily in its quarterly report this afternoon, as Q3 earnings season continues to heat up: earnings of $6.85 per share were well passed the $6.07 in the Zacks consensus, on revenues of $3.84 billion — surging beyond the expected $3.41 billion. Gross margins came in at 47%. The semiconductor processor increased full-year revenue guidance to $3.7 billion, above the $3.6 billion analysts had been looking for. But, as LRCX stock is up more than +90% year to date, the stock is selling off -3% on the news.
Las Vegas Sands LVS posted better-than-expected numbers in its fiscal Q1 report out this afternoon, with 55 cents in earnings per share outpacing estimates by 2 cents, while revenues in the quarter of $2.8 billion outshone the $2.69 billion anticipated. Travel and tourism, particularly in Macao and Singapore, were cited in the company’s press release. Shares, which are still down for the year, are up +4.6% in late trading today.
Questions or comments about this article and/or author? Click here>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Netflix, Inc. (NFLX) : Free Stock Analysis Report
Lam Research Corporation (LRCX) : Free Stock Analysis Report
Las Vegas Sands Corp. (LVS) : Free Stock Analysis Report
Tesla, Inc. (TSLA) : Free Stock Analysis Report
