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Super Micro Computer, Inc. (SMCI) - free report >>
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Markets Up as Traders Come to Terms with Potential Election Results
Tuesday, November 5, 2024
Well, it’s still Election Day, but what appears somewhat different this afternoon compared to this morning and the past week or two is that market participants look ready to deal with whichever candidate wins the White House. This is especially true as odds seem to be getting better that an election this close will not produce a clean-sweep in either party direction. The market hates uncertainty, but it loves political gridlock.
The Dow gathered +402 points for the session, +1.02%, while the S&P 500 grew +70 points, +1.23%. The Nasdaq performed even better — +259 points, +1.43% — while the small-cap Russell 2000 beat the pack, +1.74%.
Monthly Services Data Mixed, but Still at Growth Levels
Both S&P Services PMI and ISM Services for September were released earlier this morning, after the market opened. While S&P PMI came in slightly beneath estimates — 55.0 versus 55.3 — ISM Services were ahead: 56.0% versus 53.7% expected. The key here is both Services prints were about the 50-level, which indicates growth versus loss.
Super Micro Computer Guides Lower, Shares Drop
One of the biggest success stories of the AI movement through the first half of 2024, Super Micro Computer (SMCI - Free Report) has fallen on hard times since. Even now, with a report out that no evidence of fraud or misconduct was cited in the DoJ’s investigation on the company, there is still a risk the company may be delisted if certain auditing measures are not maintained.
In the company’s fiscal Q1 earnings report, in-line earnings and lower-than-expected revenues helped shares fall as much as -11.8% on the news, although have ebbed back up somewhat in the minutes since. Next-quarter guidance was far lower than initially expected: earnings of between 56-65 cents per share is a big miss from the 81 cents in the Zacks consensus. Revenue guidance between $5.5 - 6.1 billion is well off the $6.85 billion estimate. Expect SMCI’s Zacks Rank #2 (Buy) to take a hit in the coming days.
Check out the updated Zacks Earnings Calendar here.
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