📈META EARNINGS MISS. WILL IT SPREAD?

Oct 26, 2022

META earnings release tonight was a disappointment on several fronts The real question is will this spread to the rest of the market. META revenue guidance was cut by 2 billion dollars or 5% next quarter. The two more troubling metrics were that MAU were down quarter over quarter. MAU is monthly average users. Essentially less people are spending time on the platforms. This is bearish longer term because not only does it affect revenue but less eyeballs means less pricing power on ads. The second metric was an increase in spending on the Metaverse. Usually when companies drop in revenue they cut expenses. We have seen several examples of this over the course of this earnings season. NFLX ,GOOG and MSFT all cut expenses. The cuts raised EPS that may have been missed due to revenue short falls. META is doing this opposite. This is good for companies such as NVDA which is trading up after hours. Longer term I believe META is starting to lose investors that liked the cash flow business. After hours the stock is down 24%. It is my belief this is a company specific issue. The majority of mega tech companies have good risk management. META seems to be operating with the same playbook from two years ago. The indexes held up well today until the middle of the day. Then investors started to position themselves for earnings. It will be interesting to watch the open and see the reaction tomorrow after jobless claims. Today the market bounced after MSFT and GOOG earnings misses. If we can do the same thing tomorrow that bodes well for investors. AMZN and AAPL have earnings releases tomorrow night expect the same kind of volatility leading up to them. Below are current stock ideas from the trading community as well as the indexes and key levels. The video linked below walks through 5 stocks to watch tomorrow as well as META and WOLF in detail. Let’s get to it!

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