Page 127 – XTrade

Cloud Infrastructure Provider Oracle Rallies On Earnings Beat

One of the lesser talked out tech companies rallied on Tuesday, leading the market higher after reporting better than expected third fiscal quarter earnings. The stock we’re referring to is Oracle, a cloud services platform and the third largest software company in the world by revenue. Shares jumped 11.8% higher in Tuesday’s session, reaching a new record high of $127.54 a share.

The prior record for Oracle was set back in September 2023, and Tuesday’s gain was the largest single day percentage gain since December 10, 2021, when shares closed 15.6% higher.

Oracle reported revenue of $13.28 billion, which was shy of analyst expectations for $13.3 billion. However, adjusted earnings per share were $1.41, exceeding the $1.38 per share that analysts were expecting.

Adding to the positive sentiment for the stock was an increase from $135 to $150 in the price target for Oracle from Deutsche Bank analysts. The analysts reiterated their buy rating on the stock, highlighting the demand for Oracles cloud infrastructure business.

Analysts at UBS also lifted their price target on the stock from $130 to $150 a share while reiterating a buy rating on the stock. In a note to investors the analysts said they are “encouraged by the top-line turnaround, OCI growth, AI backlog numbers and by the prospect that the big core database business might benefit in 2024/2025 from an AI-driven cloud migration lift.”

Analysts at Bernstein Research were most bullish on the stock’s potential, lifting their price target from $147 to $159 a share, while also reiterating an equivalent buy rating. They were also positive over the growth seen at Oracle, and felt encouraged by management’s comments that supply continues to outstrip strong demand.

Asian Daily Market Review

Asian market closed mixed following overnight gains on Wall Street that sent the S&P 500 and Nasdaq both to new record levels. Markets in Japan and Australia also hit their own new record highs as investors are betting on lower interest rates coming. The latest optimism was sparked by U.S. PCE inflation data for January, which showed easing inflation and bolstered hopes for a June interest rate cut.

Japan’s Nikkei outperformed the region, rising by 1.9% to a new all-time high. Shares of Softbank Group added 1.3%, while Sony shares jumped 2.1% higher. Among the major exporters Toyota was up by 1.6%, Panasonic rose by 3.2%, and Canon saw a more modest 0.2% gain.

In Australia the S&P/ASX 200 also hit a new all-time high, rising by 0.6% as investors are confident that the Royal Bank of Australia is done raising interest rates. The big four banks showed strength as ANZ added 1.1%, NAB rose 0.6%, Commonwealth Bank tacked on 0.8%, and Westpac edged up by 0.2%. The major miners performed even better, with BHP adding 2.3% and Rio Tinto advancing by 0.9%.

Mainland Chinese markets extended their gains even as PMI data showed the Chinese economy remained muted in February. The benchmark Shanghai Composite advanced by 0.4%, while the smaller cap Shenzhen Composite rose by 1.1%. In Hong Kong the Hang Seng reversed losses from the prior session as it gained 0.5% for the session.

In South Korea the Kospi fell by 0.4%, and in Taiwan the Taiex eased lower by 0.2%.

Southeast Asian markets also fell, with Malaysia’s KLCI recording a 0.9% loss and Singapore’s Straits Times Index losing a modest 0.2%.

U.S. Daily Market Review

The Nasdaq Composite jumped to an all-time peak today, rallying over its 2021 record.

Stocks advanced even as troubled regional bank New York Community Bancorp dropped 25.9% after the bank reported a leadership change and disclosed issues with its internal controls.

In March Wall Street as stocks set new records, boosted by a promising inflation reading and a relentless tech rally.

Amgen and Nike retreated around 2.5% on weekly basis this week alone.U.S. debt is soaring at a massive rate and has shown no signs of slowing down.

The national debt jumped to $34,471,083,238,111.75 as announced by the latest numbers coming from the Treasury Department. That is another gain of around $28.9 billion from the $34,382,148,207,560.53 figure reported the previous day.

Hewlett Packard Enterprise stock prices surged around 2% after fiscal first quarter earnings of 3 cents per share coming over initial forecasts.

In reality, Hewlett Packard registered $6.76 billion in revenue, under the Wall Street forecast of $7.11 billion.

European Daily Market Review

European markets gained some side today after registering a rising mode in February.

The German DAX soared 83.48 or 0.47% from 17,761. The French CAC-40 fell 3.96 or 0.05% from 7,923.

FTSE-100 gained 47.89 or 0.63% from 7,677.

The pan-European Stoxx 600 inclined 0.3% by mid-morning, with adding 1.2%.

Flash euro zone inflation reading demonstrated the headline consumer price index retreating around 2.6% from January’s 2.8%.

Stock prices of Daimler Truck jumped to fresh all-time high Friday, after adding more than 13.5% in early deals.

As a matter of fact, the company registered record full-year profit and declaring a 2 billion euro ($2.16 billion) share buyback program.

U.K. house prices have rallied on an annual basis for the first time in a year, as reported by the Nationwide.

The UK’s largest building society said declared price gains of around 1.2% in February versus last year.

Gold Is Closing In On An All-time High

Gold finished at a four week high on Friday, supported by data that shows inflation is falling, and some rumblings over potential bank failures. Also providing support recently is a weaker U.S. dollar, which is falling on expectations for lower interest rates in the U.S. by mid-year. Friday capped off a second straight week of gains for gold, increasing the case for a bull market rally.

Gold traders are also seeing a positive short-term technical picture for the precious metal. Recent action has seen a three-month long downtrend negated. The next level of resistance, which is considered quite strong, is at the $2,100 level. That’s just over $7 away from Friday’s close at $2,092.80 an ounce. Friday also saw gold hit a one-year high on an intraday basis, trading above the $2,095.80 level seen at the close of 2023.

Gold reached an all-time high of $2,135.39 an ounce in December 2023 and sits roughly 2% below that level now. If gold can top the $2,100 level it is possible we could see a test of that all-time high as early as next week, particularly if we continue to see a decline in the U.S. dollar.

Data out of the U.S. showed a weak manufacturing sector and a weak consumer survey from the University of Michigan. Add that to Thursday’s report on consumer inflation, which showed the slowest uptick in three years, and things seem to be adding up to a good year ahead for gold.

The real catalyst for a strong rally would be a Fed rate cut in the U.S. While hopes for such a cut in June are increasing, economic data and messaging from the Fed is till muddled enough to keep traders guessing.

Disney In Bull Mode Since Earnings Release

Shares of Walt Disney have been on a tear since announcing Street beating revenue and earnings earlier this month. After a short pullback on profit taking recently the stock was back on the move higher Tuesday, rising by 1.6% to lead the Dow Industrials in a lackluster day on Wall Street.

The catalyst for the Tuesday gains was an investor’s note from analyst Ivan Feinseth of Tigress Financial. In the note he placed a $136 price target on the stock, representing a potential upside of roughly 25% from Tuesday’s closing level. That’s on top of the 21.1% that the stock has already gained in 2024.

There are a number of reasons for the optimism from Feinseth. First of course is the latest earnings report, which was better than expected by Wall Street. Revenue, earnings, and free cash flow were all up, however the stock is still trading at pre-pandemic levels.

Disney has been actively working to revitalize growth in its entertainment business, and that work looks as if it may be paying off. Every one of Disney’s theme parks was profitable in the last quarter, giving Disney, in the words of CEO Bob Iger, “an incredibly solid foundation to build upon.”

Disney has also been under pressure from activist investors to improve its performance, and to fully embrace AI in its entertainment division, both in its movies and at its theme parks. The activists have also suggested Disney spin off its hotel and parks business into a REIT to maximize profits.

While losses continue for Disney’s streaming video service, they were far smaller in this past quarter versus the year-ago period. That shows a significant improvement and another sign that the work Disney is doing is beginning to pay off.