Happy Sunday!

Here is what we cover this week:

• Weekly Market Overview
• Weekly Sector Update
• Earnings Highlights
• Chart of the Week
• Weekly Market Overview

Weekly Market Overview:

US Equity Indexes Climb Amid China Stimulus Boost, Despite Mixed Inflation Data

• The Dow Jones closed at 42,313.00 on Friday, up from 42,063.36 last week. The Nasdaq ended at 18,119.59, and the S&P 500 at 5,738.17, both showing slight gains. Basic materials, including aluminum and copper industries, led the US sectors.
• On Thursday, China’s Politburo pledged necessary fiscal spending to meet its 5% GDP growth target and support the property market, following recent monetary easing by the People’s Bank of China.
• US Q2 GDP growth remained unchanged, exceeding expectations. Initial jobless claims also unexpectedly dropped for the week ending Sept. 21, with the four-week average down as well.
• On Friday, the core personal consumption expenditures (PCE) index slowed month-over-month but saw its first annual increase since January 2023. Falling energy costs and goods deflation contributed to the slowdown.
• Following the PCE report, the chances of a 50 basis-point rate cut in November rose to 54.8%, up from 49.3%, while the likelihood of a 25 basis-point cut stood at 45.2%.

Weekly Sector Update

• The market has seen a shift in sector performance over the past week. 
• Energy, Financials, and Health Care have declined, while Materials and Utilities have rallied significantly. 
• Materials, in particular, have surged to new highs and now lead the market in terms of momentum. 
• Industrials and Consumer Discretionary have also shown strength with recent breakouts. 
• This rotation within the broader uptrend is a positive sign, especially considering the underperformance of Technology compared to its July highs.

Earnings Highlights

Earnings Announcements: Week of September 22-28, 2024

1. Progress Software Corporation (PRGS) Q3 2024 Earnings 

Financial Performance:

• Revenue: $178.69 million, up 1.7% year-over-year (YoY).
• Earnings per share (EPS): $1.26, beating the consensus estimate of $1.14 by 10.53%.
• Net Income: $33.8 million, up from $29.3 million in the prior-year quarter.

• Subscription revenue: Grew 10% YoY, driven by strong adoption of Progress’ cloud-based offerings.
• Operating margin: Improved to 23.9% from 22.8% in the previous year.
• Cash flow from operations: $47.3 million, down from $51.3 million in the prior-year quarter.

Strategic Initiatives:

• Product innovation: Progress continued to invest in research and development to enhance its product offerings and drive customer value.
• Partnerships and acquisitions: The company expanded its partner ecosystem and completed strategic acquisitions to strengthen its market position.
• Focus on digital transformation: Progress emphasized its commitment to helping customers accelerate their digital transformation journeys.

Source: Trading View

2. AutoZone  (AZO) Q4 2024 Earnings 

• AutoZone reported Q4 fiscal 2024 earnings of $48.11 per share, a 3.5% year-over-year increase but below the analysts estimate of $53.31.

• Net sales grew 9% year-over-year to $6.20 billion, surpassing the Zacks estimate of $6.18 billion.

• Domestic commercial sales increased to $1.66 billion, with same-store sales up 0.2%.

• Gross profit rose to $3.26 billion, and operating profit grew 5.7% to $1.29 billion.

• AutoZone opened 68 new stores in the US, 31 in Mexico, and 18 in Brazil, bringing its total store count to 7,353.

• The company repurchased 244,000 shares for $710.6 million, with $2.2 billion remaining for future buybacks.

Source: Seeking Alpha

3. KB Home (KBH) Q3 2024 Earnings 

Source: Seeking Alpha

Chart of the Week

Is AMD breaking out ?

AMD stock price appears to be forming a descending triangle pattern. This pattern suggests a potential bearish breakout, but a break above the upper trendline could signal a bullish reversal.

The RSI is currently hovering near the oversold level, indicating that the stock might be due for a rebound. 

The 50-day and 200-day moving averages are currently converging. A crossover of these moving averages could provide a signal of a potential trend change.

A break above the upper resistance level @ 163 could lead to further gains.

Pay attention to trading volume. A significant increase in volume during a breakout or breakdown can confirm the strength of the move. 

Source: Trading View