'Apple (AAPL) Beats Modestly as Markets Soar'

Markets rally for a second day, with weekly totals up on the Dow and Nasdaq. Apple's earnings disappoint.

Markets experienced a second consecutive day of gains, resulting in weekly totals ranging from a 3.2% increase on the blue-chip Dow to a 4.7% rise on the tech-heavy Nasdaq. Just when it seemed like the final trading months of 2023 would be lackluster, the Dow surged by 564 points, finishing the session with a 1.7% gain. The Nasdaq saw a 1.78% increase of 232 points, while the S&P 500 grew by 1.89%. The small-cap Russell 2000, which has been playing catch-up with its major index counterparts, jumped an impressive 2.69% today.

Anticipation for the Federal Reserve meeting, where interest rates were expected to remain unchanged, led to a relief rally in the market. The release of worsening weekly and continuing jobless claims further justified the Fed's decision to keep rates steady. Additionally, bond yield rates decreased significantly from their multi-year highs, with the 2-year rate falling below 5% and the 10-year rate dropping to 4.663%. This decline in bond yields triggered a renewed interest in the equities market.

The most significant earnings report of the day came from Apple, the largest company in the world. After the closing bell, Apple released its fiscal Q4 numbers, which were solid but not as outstanding as previous years. Earnings per share of $1.46 exceeded the Zacks consensus of $1.39 and grew by 13% year over year. Revenues of $89.5 billion surpassed the expected $89.03 billion and resulted in a profit compared to the previous year. However, considering Apple's size and the release of the new iPhone 15 during the quarter, these numbers were not as impressive as expected, especially for a company trading at 26x forward earnings. While the company achieved decent growth in the U.S., it struggled in China. Apple did set an all-time record for Services revenue and declared a cash dividend of 24 cents per share. However, the stock dropped approximately 1% in late trading.

On the other hand, Booking Holdings reported a 36% increase in earnings in its Q3 report, reaching $72.32 per share. The company's $7.3 billion in sales exceeded the Zacks consensus of $7.23 billion and grew by 21% year over year. Booking Holdings attributed its success to the resilience in leisure and travel demand during the quarter. However, the company did not provide any guidance, which may explain the 6.6% drop in shares in after-market trading. Some investors were also disappointed by the absence of a stock split.

Expedia, a competitor of Booking, reported record adjusted EBITDA of $1.2 billion in its Q3 report, representing a 13% increase. Earnings per share of $5.41 easily surpassed the expected $5.15, while revenues of $3.93 billion exceeded the anticipated $3.87 billion. Shares of Expedia rose by 9% in late trading, likely due to a rebound from recent declines. The company's One Key loyalty program reportedly delivered positive early results.

Tomorrow morning, the U.S. Bureau of Labor Statistics will release the highly anticipated Employment Situation report. Analysts expect around 170,000 new jobs to be filled in October, which is approximately half of the previous month's figure. The Unemployment Rate is projected to be 3.8%, which are historically good numbers, albeit lower than the previous month. Other employment metrics have indicated a decrease in job additions across all sectors, and tomorrow's report will provide further insight into the current job market.

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