Apple, Microsoft, Meta earnings in focus: Weekly Review with SIAS

What happened?

In this week's Weekly Market Review in partnership with Securities Investors Association Singapore (SIAS), we discuss key developments in the global equity market and also share more about the earnings from US Magnificent 7 companies - Apple, Microsoft and Meta.

Watch the video to learn more about what we are looking out  for this week.

Weekly Market Review

1:37 - Macro Update

•  The S&P 500 dropped 1.4% and the Nasdaq Composite Index dropped 1.5% while the Dow Jones Index just slipped down slightly by 0.1%.

• The STI also followed the broad market movement in the US and dropped 1.1%.

• US non-farm payroll showed only 12,000 jobs were added and this is the lowest since the December of 2020. This is due to hurricanes in the US and the labor strike by Boeing.
• 25 basis point cut expected during the Fed meeting next week.
• The US 10-year bond yields also rose to about 4.4%
• Increased optimism of the Chinese markets as the Chinese property sector seen the first growth recently in their macro data and PMI data was better than expected.

4:33 - Singapore market updates

STI Top performers:

• Hongkong Land Holdings Ltd
• Jardine Matheson Holdings Ltd
• Genting Singapore Ltd
• DFI Retail Group Holdings Ltd
• City Developments Ltd

STI worst performers:

• Sembcorp Industries
• Wilmar
• Thai Beverage
• ST Engineering
• Mapletree Pan Asia Commercial Trust

6:31 - US Magnificent 7 earnings 

Last week, five of the "Magnificent Seven" tech giants—Google, Microsoft, Meta, Apple, and Amazon—reported earnings, with mixed results. 

Although most companies saw decent earnings growth, they didn't fully meet market expectations, leading to decline in the share prices for Apple, Microsoft, and Meta.

• Apple: Apple’s earnings per share (EPS) dropped to $0.97 due to a one-time $10.2 billion tax charge in Europe, affecting net income. Adjusted for the tax charge, EPS would be $1.64, a 12% annual increase, but revenue growth was modest. The company’s outlook of low single-digit growth in the December quarter and declines in the Asian market raised concerns, resulting in a 3.67% drop in Apple shares.
• Microsoft: Microsoft beat earnings estimates but projected slower-than-expected growth for the current quarter, which disappointed investors. Despite strong 16% revenue growth, its forecasted revenue of $68.1–$69.1 billion fell short of analyst expectations. Increased infrastructure spending also contributed to the share decline, dropping from $433 to $410.
• Meta: Meta saw positive year-over-year earnings growth but missed analyst expectations for user numbers. Additionally, it raised capital expenditure guidance for 2024 and anticipates a significant rise in 2025 infrastructure expenses. Concerns over slower ad spending in Asia and rising costs impacted Meta's stock, which dropped 1.06%.

Overall, these results indicate that tech giants may face slower growth as market leadership in AI and tech appears to be stabilising. Looking ahead, investors are eyeing the US elections on November 5 for further market impact.

SGX recently introduced Daily Leverage Certificates (DLCs) on the “Magnificent 7”, including household names such as Nvidia, Apple, Tesla, Alphabet, Amazon, Meta, and Microsoft. Learn more here. 

15:21 - Technical Analysis

Dow Jones Technical Analysis

• Dow Jones Index declined slightly by 0.1% in the past week.
• Friday's uptick positively impacted the MACD, indicating that the recent downtrend may be easing.
• RSI increased to 46 from 41, approaching the 50 neutral mark; a rise above 50 could confirm upward momentum.
• If upward momentum continues, the Dow Jones may retest its all-time high at 43,325 points.

S&P 500 Technical Analysis

• The S&P 500 experienced a slump last Thursday due to earnings misses.
• The MACD has yet to confirm the downtrend is subsiding, though upcoming sessions may provide clarity on whether the recent decline is easing.
• The RSI is currently at 44, still below the neutral 50 mark; a rise above 50 could signal a stronger rebound for the S&P 500.

Nasdaq Composite Technical Analysis

• Dropped by 2.7% last Thursday due to earnings misses from key tech companies, followed by a 0.8% rebound on Friday.
• The MACD indicator is currently trending downward, suggesting continued downward pressure on the index.
• The RSI is at 49, close to neutral, providing limited directional insight but indicating the index may linger near current levels.
• Potential for a retest of the recent high at 18,785 points if the index stabilises at support levels.

STI Technical Analysis

• The STI stands around 3,572 points, about 80–90 points below the recent high of 3,652 points from September 24, which serves as the next resistance level.
• The MACD shows signs of the recent downtrend subsiding, suggesting potential for upward momentum.
• The RSI is currently at 48.5, near the 50 neutral mark. If it crosses above 50 and reaches the 14-day moving average at 54, there may be further upside potential.
• A move above the 50 and 54 RSI levels could drive the index toward the overbought RSI level at 75, potentially retesting the year-to-date high of 3,652 points.

What to look out for this week

• Tuesday, 5 Nov: CapitaLand Integrated Commercial Trust and Elite UK REIT earnings, US Election
• Wednesday, 6 Nov: CapitaLand Investment and Frasers Logistics & Commercial Trust earnings
• Thursday, 7 Nov: DBS and Frasers Hospitality Trust earnings, Singapore 6-month T-bill auction
• Friday, 8 Nov: UOB, OCBC and Singapore Airlines earnings

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