Markets Volatile as Earnings Seasons Heats Up

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Alex Partida

Oct 26th 2022  .  3 min read

Markets Volatile as Earnings Seasons Heats Up

On Tuesday, Google (GOOGL) reported earnings after the closing bell and shook up the entire market. GOOGL missed on both earnings per share (EPS) and revenue. This report sent the Nasdaq tumbling and the rest of the market with it. The weakness felt in the technology sector would look to set the tone for today’s action.

Using VIX for guidance 

Instead, when the opening bell sounded, the market showed signs of strength. One of the early indications that the market would have a rally at the open was the volatility index (VIX). The VIX gauges the volatility and the market’s general fear. 

When VIX did not gap up, indicating there was no continued fear from the technology sector, the bulls got the green light and started buying.

Opening rally to start the day

In the opening minutes of the market, capitulation dominated the indexes. Markets shuffled around before they moved higher in unison. 

This strength lasted for the first half of the day before finally reaching some resistance at the psychological level of 3,900 on the S&P 500 futures. This resistance, combined with selling pressure, ultimately overcame the bulls and reversed the upwards trend. 

The fall from today’s high came aggressively as the market revisited the day’s low at market open. For the remainder of the day, indexes danced around in anticipation of another earnings report coming after the bell.

META reports earnings 

After the closing bell, Meta Platforms Inc. (META) released its earnings report for quarter three. The data revealed that META had missed their earnings per share, with the actual number coming in at $1.64, lower than the expected $1.89. On the other side, META beat their revenue by reporting $2771B, better than the expected $27.41B. 

This mixed earnings report has sent META lower in the after-hours. Will the tech giant recover and help tech lead the market higher, or will the domino send the market falling? This is the question that will be answered tomorrow. 

Tomorrow is arguably the biggest day of the week for earnings; some may call it the super bowl if you will. Three major companies are all set to report.

Earnings soon to come. 

Before the bell, Shopify will release its third-quarter earnings and can easily play a role in how the market trades tomorrow. 

The main event comes tomorrow after the closing bell as both Apple and Amazon release their earnings report. These reports will indeed have a heavy weight on the Nasdaq. These reports will likely set the tone for Friday and into next week. 

Earnings reports bring weakness to the market. 

At the market close today, the Nasdaq and the S&P 500 were negative at the end of the session. The S&P 500 closed down 0.78%, losing 30 points, while the Nasdaq closed down 2.09%, a loss of 233 points. The Dow Jones was the strongest, barely down 0.01%, declining 1 point.

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