Earnings season is the heartbeat of the market - and every day brings fresh signals about where money is flowing.
With each report, we learn not just how companies are performing, but how investors are reacting.
In the Daily Beat, we spotlight the most important S&P 500 earnings moves from the prior session - the winners, the losers, and the reactions that reveal what really matters to the market right now.
Whether itβs a bellwether with broad economic implications or a niche name making waves, we cut through the noise to focus on the setups that matter most.
Here are the top beats from the S&P 500 π
*Click the image to enlarge it
At the top of Wednesday's list was Avery Dennison $AVY, one of the world's largest packaging and containers stocks. The company reported mixed results, but the market rewarded shareholders with a +7.48 reaction score.
In the report, they posted revenues of $2.22B, meeting the market's expectations, and earnings per share were $2.37, above the expected $2.33.
Coming in second place was the world's largest medical instruments and supplies stock, Intuitive Surgical $ISRG. They beat expectations across the board and had a +6.73 reaction score.
They reported revenues of $2.51B, compared to the expected $2.41B, and earnings per share of $2.40, beating the expected $2.00.
Here are the bottom beats from the S&P 500 π
At the bottom of Wednesday's list was the world's largest entertainment stock, Netflix $NFLX. The company reported mixed results and suffered a -4.95 reaction score.
Revenue came in line with expectations, but earnings per share missed expectations by more than a dollar.
Following a mixed earnings report, Lennox $LII had the second-worst reaction score of -4.47.
They reported revenues of $1.43B, below the expected $1.48B, and earnings per share of $6.98, beating the expected $6.86.
Now let's dive into the fundamentals and technicals π
ISRG had its best earnings reaction since 2014 π₯
Intuitive Surgical had a +13.9% post-earnings reaction, and here's what happened:
Revenues surged 23% year-over-year, driven by Ion (their robotic lung biopsy system), whose sales skyrocketed 52% over the same period.
In addition to the strong top-line growth, the company increased its operating income by 32% year-over-year.
In addition to the blockbuster report, the management team raised its forward revenue guidance.
Coming into this report, the market's expectations were low, and the company blew them out of the water.
As you can see on the chart, the price was on the cusp of resolving a prolonged distribution pattern. Not only did the stock not breakdown, it also reclaimed the VWAP anchored to the all-time high. In other words, this is a confirmed "not a top" pattern.
This move couldn't have been more decisive... It was the best earnings reaction in over a decade!
So long as ISRG holds above 500, the path of least resistance is likely to remain higher for the foreseeable future.
NFLX had its worst earnings reaction since 2022 π»
Netflix had a -10.1% post-earnings reaction, and here's what happened:
Revenue grew 17% year-over-year, and engagement and TV share reached new all-time highs in the U.S. and U.K.
Ad revenue more than doubled year-over-year, with the best ad sales quarter ever and U.S. upfront commitments more than doubling.
Due to a Brazilian tax expense, the company slightly lowered its revenue and operating margin forecast.
All things considered, we didn't think this was a very bad earnings report. However, the market hated it.
Shareholders were punished with the worst earnings reaction since 2022, when the stock fell over 35% in a single session.
Adding to the significance of this negative reaction, the price decisively resolved a multi-month distribution pattern.
So long as NFLX holds below 1,135, the path of least resistance is likely to remain lower for the foreseeable future.
Stay safe out there
-The Beat Team
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