Earnings season is the heartbeat of the market - and every day brings fresh signals about where money is flowing.
With each report, we learn not just how companies are performing, but how investors are reacting.
In the Daily Beat, we spotlight the most important earnings moves from the prior session - the winners, the losers, and the reactions that reveal what really matters to the market right now.
Whether itβs a bellwether with broad economic implications or a niche name making waves, we cut through the noise to focus on the setups that matter most.
Here are the latest earnings stats from the S&P 500 π
*Click the image to enlarge it
On Thursday, the $144B consulting giant, Accenture $ACN, beat its headline expectations and suffered a -1.29 reaction score.
The company posted revenues of $17.60B, versus the expected $17.38B, and earnings per share of $3.03, versus the expected $2.98.
We also heard from the $23B electronic components company, Jabil $JBL, which was also punished for smashing its top and bottom line expectations.
They reported revenues of $8.30B, versus the expected $7.59B, and earnings per share of $3.29, versus the expected $2.92.
Last, but not least, the $7B auto & truck dealership company, CarMax $KMX, missed expectations across the board and crashed lower as a result.
In the report, they delivered revenues of $6.59B, versus the expected $7.01B, and earnings per share of $0.64, versus the expected $1.04.
Now let's dive into the fundamentals and technicals π
ACN resolved a massive top on the heels of its earnings report π»
Accenture had a -2.7% post-earnings reaction, and here's what happened:
Revenues grew 7% year-over-year, and this increase was reflected in the bottom line, with 8% EPS growth over the same period.
The company has continued to aggressively expand its AI capabilities, making 23 acquisitions over the past year.
The market's negative reaction was less about the past quarter and more about the forward guidance, which was significantly weaker than anticipated.
This is one of the hottest messes in the entire S&P 500, and Thursday's earnings report added fuel to the fire. Its peers, such as Gartner $IT and Infosys $INFY, also appear to be in trouble.
Following the report, price decisively resolved a four-year distribution pattern, entering a brand-new primary downtrend. Now, the bears are in complete control.
For years, the market has punished this name for reporting earnings, and now the technicals are confirming the bearish fundamental trend.
So long as ACN holds below 243, the path of least resistance is decisively lower for the foreseeable future. A close above that level would shift our bias back to neutral.
KMX suffered its worst earnings reaction in 10 quarters π»
CarMax cratered -20.1% following this earnings report, and here's what happened:
Total sales declined 6% year-over-year, resulting in a 29.6% decrease in net earnings over the same period.
With the depressed stock price, the company is aggressively repurchasing shares. During the quarter, they repurchased 2.9M shares for $180M, and they're authorized to repurchase an additional $1.56B (over 20% of the total market capitalization).
In addition to the woeful quarter, the management team expects further margin pressure and increased expenses in the coming year.
As you can see, this earnings report sparked an epic downside resolution from a prolonged consolidation. At Thursday's intraday low, the price was down 25% from the previous day's close.
The short-term momentum is currently at one of its lowest levels ever, so a consolidation is likely needed. But make no mistake, the bears are in complete control of the trend, and another leg lower likely isn't far away.
Given the current trajectory of this company, we wouldn't be surprised to see it removed from the S&P 500 soon. They don't deserve to be in it anymore!
So long as KMX holds below 55, the path of least resistance is decisively lower for the foreseeable future. A close above that level would shift our bias back to neutral.
Happy Friday!
-The Beat Team
P.S. Small-cap season is here - Steve Strazza and Mary Thwaites went LIVE yesterday to talk about which stocks they're buying and why.
