The Daily Breakdown takes a look at the Federal Reserve ahead of the Fed’s interest rate decision. Mega-cap tech earnings are on deck, too.
Wednesday’s TLDR
- The Fed is on watch
- META, MSFT, TSLA report earnings
- Nvidia rallies almost 9%
What’s happening?
What a loaded three hours it’s going to be today between the hours of 2 p.m. ET and 5 p.m. on Wednesday.
At 2 p.m. we get the Fed’s interest decision and press release. Although the expectation is that the Fed will not alter rates, investors will be curious to see how the language in the press release has changed — potentially tipping the Fed’s hand in how they view the current economic landscape.
At 2:30 p.m. Chair Powell will take the stage, delivering some prepared remarks followed by a Q&A session with reporters. Keep in mind, the most volatile part of Fed days tend to come from 2:30 to the close at 4 p.m.
However, there’s still plenty going on after the markets close. That’s as Microsoft, Meta, and Tesla are all set to report earnings. With a combined market cap of more than $6.25 trillion, these three are sure to draw an audience.
Further, they should be able to provide some clarity on the AI situation, given that they are some of the biggest spenders in the space.
Want to receive these insights straight to your inbox?
Sign up here
The setup — Magnite
Weighing in with a market cap of $2.5 billion, Magnite is significantly smaller that many of the names we’ve discussed so far this year.
However, the stock has been trading pretty well lately. That’s as shares break out over downtrend resistance and as the stock has been consolidating since a big earnings-related rally in November.
The daily chart does not show the prior resistance area between $15 and $16 from 2023 and 2024, but if logged-in users go to Magnite’s chart and look at the weekly timeframe, it’s more evident.
MGNI did a great job clearing this level with its earnings-fueled rally, then consolidated above it. If shares can continue to charge higher, bulls will want to see Magnite clear the recent highs near $18 and continue on toward $20.
On the downside, a move back below $17 saps the stock’s momentum and puts its consolidation pattern back in play. However, a close below $15 would be a bearish technical development and could usher in more selling pressure.
Options
For some investors, options could be one alternative to speculate on MGNI. Remember, the risk for options buyers is tied to the premium paid for the option — and losing the premium is the full risk.
Bulls can utilize calls or call spreads to speculate on further upside, while bears can use puts or put spreads to speculate on the gains fizzling out and MGNI rolling over.
For those looking to learn more about options, consider visiting the eToro Academy.
What Wall Street is watching
NVDA – Nvidia shares fell 17% on Monday, but rebounded with a near-9% rally on Tuesday. While shares are still down about 10% for the week, yesterday’s rally helped erase some of Monday’s losses. Can the stock continue to rebound? Check out the charts.
ASML – A key company within the AI space, ASML builds the equipment — called lithography machines — that helps make the chips. After a bumpy 2024, ASML shares are rallying this morning after the Dutch firm reported better-than-expected earnings.
TMUS – Shares of T-Mobile are rallying this morning too, up about 6% in pre-market trading. That’s after the telecom giant reported earnings of $2.57 a share on revenue of roughly $21.9 billion, with those metrics beating expectations by 29 cents a share and more than $500 million, respectively.
Disclaimer:
Please note that due to market volatility, some of the prices may have already been reached and scenarios played out.
The post Heads Up: It’s Fed Day appeared first on eToro.
