Market Insights

Some big technology stocks have reported earnings in the last week, but investors mostly shrugged so far.

The big gainer is Tesla (TSLA), which ripped 17 percent after showing a big turnaround in profitability. The improvement in its margins and cash flow give the electric car maker breathing room for servicing its debt. However, the electric-car maker came into the report near the bottom of its range and is still negative for the year. And, its revenue miss did little to inspire confidence in its long-term growth story.

Things went just the opposite direction for Twitter (TWTR), whose earnings, revenue and guidance came up short. The social-media company cited poor advertising results and warned that technology bugs will continue to weigh on results into next year. TWTR crashed 19 percent, its biggest drop in over a year.

Microsoft (MSFT) and PayPal (PYPL) both reported strong numbers on their top and bottom lines but failed to break out. MSFT’s guidance was a little light. Growth at its Azure cloud business is also slowing as it gets bigger. The stock inched higher through the morning and is currently up more than 2 percent.

PYPL is rallying more, up about 8 percent, it was at a seven-month low before the report. The bigger question may be whether the payments provider can fight a potential sentiment shift away from growth stocks?

Value Rotation Continues

After all, one of the biggest trends is still rotation into forgotten names in neglected sectors like industrials and energy.

Just consider two of the S&P 500’s biggest gainers in the last week: oil-field service providers Halliburton (HAL) and Schlumberger (SLB). Both had weak revenue but cut costs to hit their profit numbers. Crude oil also rose, giving investors hope in the entire group.

Harley Davidson (HOG) may have also turned a corner after shipments fell less than feared. That spurred hopes the motorcycle maker is finally maneuvering its way through tariffs and global demand issues. Earnings and revenue beat estimates.

Coca-Cola (KO) had a strong report as Zero Sugar drinks pushed earnings and sales past forecasts. It was the third straight quarter that the beverage giant has shown signs of new products driving volumes.

Dow (DOW), part of the old DowDuPont chemical giant, also surprised to the upside and pushed higher.

Caterpillar (CAT) and Boeing (BA) reported in the last week as well. However neither moved much as investors kept focusing on company-specific issues like tariffs and aircraft redesigns.

Which Way for Chips?

Semiconductor stocks are having a volatile week. They crashed on Wednesday after Texas Instruments (TXN) warned of tepid demand. But today they’re trying bounce after chip-equipment provider Lam Research (LRCX) beat across the board.

Remember this group has results from Intel (INTC) tonight, and Advanced Micro Devices (AMD) next Tuesday. It also remains highly sensitive to global trade questions.

Chipotle Mexican Grill (CMG) had a strange response to its quarter. While the restaurant chain beat on its top and bottom lines, analysts warned that most of its improvements are already priced in following a 97 percent gain on the year. Investors hit the sell button.

Medical-device companies were the last interesting group as a trio of companies beat estimates: Boston Scientific (BSX), Thermo Fisher (TMO) and Align Technology (ALGN).

In conclusion, the second big week of earnings season brought some big surprises from TSLA and TWTR. Aside from those, money kept trickling into value names and shying away from certain growth stocks.