NEWS
Cyber Shock Exacerbates Tech Wreck

Big tech’s breakdown continued today as a cybersecurity firm’s software issue took down Microsoft services used worldwide. That gave sellers an excuse to continue pounding tech stocks while defensive segments of the market held up slightly better. Let’s see what else you missed. 👀

Today's issue covers CrowdStrike causing a global meltdown, Elliott Management taking a stake in Starbucks, and how this week differed from the rest of the year. 📰

Here's today's heat map:

2 of 11 sectors closed green. Healthcare (+0.51%) led, & technology (-1.56%) lagged. 💚

Overseas, Japan’s above-target inflation fuels speculation that a rate hike could be coming soon. Still, the central bank remains focused on supporting the growth of the country’s sluggish economy. 🔺

American Express shares fell 3% as its earnings topped expectations, but revenues missed slightly. The company raised its full-year EPS guidance and reaffirmed its revenue forecast, saying that its bet on the high-income consumer continues to pay off. 💳

Comerica shares plunged 10% even as its net interest income beat expectations. High interest rates are pressuring its deposits and loan volumes. 🏦

Plug Power fell 14% after the green energy company announced it would sell $200 million of stock to aid its turnaround strategy. 🪫

Insurance giant Travelers dipped 8% after its revenue came in 2% below expectations and earnings beat. The news dragged peer insurer W.R. Berkley down more than 8% ahead of its earnings report on Monday. 📊

Hawaiian Electric jumped 37% after a Bloomberg News report said the utility joined a tentative deal to pay more than $4 billion to resolve hundreds of lawsuits related to last year’s Maui wildfires. Notably, the agreement is in the works but has not yet been finalized. 💰

AI-powered, low-emissions sidewalk delivery robot maker Serve Robotics soared over 200% on news that Nvidia has taken a 10% stake in the company. 🤖

Other active symbols: $TSLA (-4.02%), $AGEN (-17.95%), $GNS (-3.90%), $NAAS (-23.11%), $MLGO (+12.19%), and $MAXN (-10.32%). 🔥

Here are the closing prices: 

COMPANY NEWS
CrowdStrike Update Causes “Largest IT Outage In History”

One of the major selling points of technology companies is how scalable their businesses typically are, since large scale can mean large profits. However, that scale can be a double-edged sword when things aren’t going well, as cybersecurity provider CrowdStrike found out today. 🙃

A malfunction in the company’s threat-monitoring software crippled all Microsoft Windows systems, sending companies around the world into a wild tailspin overnight.

CNBC has a timeline of “live updates” that would take you an hour to read through, highlighting problems everywhere from the London Stock Exchange to India’s government to airlines around the globe.

And speaking of airlines, over 4,000 flights were canceled, stranding hundreds of thousands of passengers. 😱

The early-morning news hit both stocks in the pre-market but hammered CrowdStrike and boosted its competitors like SentinelOne, who may benefit from this massive screw-up over the longer term.

Ultimately, the company was able to deploy a fix. Still, experts say the effects of this outage will linger as the solution needs to be applied manually on a per-machine basis. 🤦

The news also attracted several analyst downgrades, with some believing this will knock the firm off its longer-term trajectory. They also warned of the unknown financial consequences of this issue.

So far, retail investors and traders agree with the negative outlook, as Stocktwits sentiment fell to extremely bearish levels (3/100) on extremely high message volumes. And from a technical perspective, traders are watching to see if prices can stabilize above their 2021 highs. Otherwise, technical analysts warned of more downside ahead. 🐻

As always, we’ll keep you updated as the story develops further. 😵‍💫

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