Morning Market Report: Feb. 1st, 2024

Overnight futures are bouncing back from yesterday's drubbing. At this point, the futures market is no longer a reliable indicator of what will happen in the regular session. We can fully expect futures rallies to get faded and futures selloffs to get bought. With Tech earnings from Apple, Amazon and Meta tonight, I will use the balance of this post to review those stocks.

"Apple Inc. will be looking to break an inglorious streak Thursday afternoon. The iPhone maker has seen revenue decline for each of its past four reported quarters, and there are questions heading into its earnings report about whether that stretch will extend to a fifth quarter."

I have a feeling that Apple will "beat" on earnings again, since on Wall Street you can beat your way all the way to bankruptcy. However, one thing all of these mega cap Tech stocks have in common is that their latest overbought melt-up got started at their last earnings "beat" in October. So one must be open to the possibility that glue sniffing is making a round-trip back to reality.

Next up, Amazon:

"Amazon.com Inc.’s big year of earnings improvement is expected to have culminated with some eye-popping growth during the holiday quarter. The e-commerce giant is forecast to post 80 cents a share in earnings for the December quarter, which would be up more than 2,500% from the 3 cents a share Amazon AMZN, -2.39% notched in the same period a year before"

"Meanwhile, full-year EPS growth is expected to log a big positive swing to $2.70, whereas the company lost 27 cents a share during 2022"

$2.70 vs. -$.27 is indeed impressive "growth". However, that still gives a 55 P/E ratio for a three decade old company that is STILL not consistently profitable.

Here we see Amazon's rising wedge started at their last earnings release.

Next, we move on to Meta formerly known as Facebook. Mark Zuckerburg among other Tech CEOs, was on the hot seat yesterday in front of Congress attempting to explain why he has weaponized social media against the youth of America for fun and profit.

Here we see last quarter the stock imploded but then the algos took it for a rocket ride higher. The potential here for a bull trap is high. Although a lot of fools got fooled by this name change gambit.