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S&P 500 Notches Fresh Record Close, Snapchat & Intel Retreat on Earnings Disappointments

S&P 500 Notches Fresh Record Close, Snapchat & Intel Retreat on Earnings Disappointments

Brendan Fagan,

S&P 500, Snapchat, Intel, Evergrande, Inflation – Talking Points

  • S&P 500 closes up 0.30%, marking a first record high close since September 2
  • Snapchat shares plummet by 25% after the bell on revenues miss
  • Intel shares decline as semiconductor shortage hampers PC business

The S&P 500 stretched higher on Thursday to notch a fresh record close, the first for the index since September 2nd. The robust move higher in equities over the last couple of weeks has been powered by strong corporate earnings, despite worries over global supply chain issues and rising input costs for companies. Sentiment was buoyant in the premarket session following strong earnings on Wednesday evening from Tesla. Since J.P. Morgan kicked off the current earnings period last Wednesday, the S&P 500 has gained over 5%.

S&P 500 2 Hour Chart

S&P 500 Notches Fresh Record Close, Snapchat & Intel Retreat on Earnings Disappointments

Chart created with TradingView

Despite sentiment being rosy during the US cash session, the mood shifted abruptly after the closing bell as Snapchat revenues missed analyst estimates. Shares plummeted by more than 25% on the news, with the company citing changes to Apple’s privacy policy as a major headwind. Snapchat management also offered softer than expected guidance for Q4, pointing to risks posed by labor shortages and supply chain issues.

Snapchat Q3 Earnings Summary

  • Revenue: $1.07 billion vs. $1.10 billion est.
  • Adjusted earnings per share: $0.17 vs. $0.08 est.
  • Average revenue per user (ARPU): $3.49 vs. $3.67 est.

Snapchat 5 Minute Chart

S&P 500 Notches Fresh Record Close, Snapchat & Intel Retreat on Earnings Disappointments

Chart created with TradingView

Intel shares also retreated after the bell, as the global semiconductor shortage saw the chip giant post weaker-than expected sales data for the third quarter. Component shortages were singled out as the driving factor behind the underperformance, with the PC chip business declining by 2% year-over-year. Management specifically highlighted weak laptop sales as a concern, with chip and other hardware shortages significantly limiting production.

Market participants may continue to look to corporate earnings as the main catalyst for near-term sentiment, although risk remains present elsewhere. Inflation is top of mind for many traders, and corporate guidance about price pressures will be key as we enter a historically kind quarter for US equities.

Questions do continue to linger around Evergrande, as the distressed real estate mogul received an extension to pay off outstanding Jumbo Fortune Bonds. This comes as Evergrande scrapped negotiations to raise over $2.6 billion by selling a majority stake in one of its property services units. With so much uncertainty surrounding the company and potential contagion, sentiment in the APAC session may continue to remain on a knife-edge.

Resources for Forex Traders

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

--- Written by Brendan Fagan, Intern

To contact Brendan, use the comments section below or @BrendanFaganFX on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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