by Ben Weiss, for the Call to Leap Team
We made it through the first week of earnings season—high five! The market had a mostly positive week, though the same can't be said for every company reporting their earnings. Let's take a look at what happened and what's coming up...
Reminder: Beginning last week, Steve and I changed up how and when we post articles here. Our goal is to engage with you all in this amazing community more often, while making these posts more digestible and easier to read and use.
On each Friday afternoon, we'll be posting about the Market News & Outlook, as you're seeing here.
Then, on each Sunday morning ahead of markets opening on Monday, we'll be sharing our trades for that week in a separate Trading Spaces article.
Finally—and most exciting to me—Steve and I are kicking off a new segment we're calling Healthy Headspace, where we'll share inspirational and thought-provoking nuggets during the work week.
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The market this week
The markets climbed steadily throughout the week, continuing the larger bullish trend we've been seeing. The S&P 500 index once again set a new all-time high this week, which some experts say may indicate we have entered into a bull market. By the numbers, S&P 500 (+0.77%), the Dow Jones (+0.50%), Nasdaq (+0.40%), Russell 2000 (+0.89%) all finished the week in the green, with big tech companies like GOOGL, META, NVDA, AMZN, AMD, and NFLX notching big gains. TSLA and Intel (INTC) each took a thumping this week following their earnings announcements—more on them in a moment. In the finance sector, credit card issuer American Express (AXP) soared following their earnings report.
Did you know?... In the neck-and-neck race for largest US company by market capitalization (or "market cap"), both MSFT and AAPL surpassed the $3T mark this week—that's trillion with a "T"...or $3,000,000,000,000. MSFT currently holds a slight edge, but with earnings coming up next week for both companies, it's anybody's guess who takes the lead! Personally, I'm rooting for both horses to win as I own shares in both 😉
In the news
We received US GDP data this week for the end of 2023. The gross domestic product tallies how much business (goods and services) the country produced and can be used as a good indicator for overall economic health. The Bureau of Economic Analysis (BEA) report the US economy grew at an annual rate of 3.3% last quarter, much better than expected. Regarding inflation, personal consumption expenses rose 2.7% compared to 5.9% from a year ago, further suggesting a calming outlook on inflation. The Federal Open Markets committee (aka the FOMC or the "Fed") meets this coming Wednesday for a highly anticipated update on how interest rates may move later this year.
High earners...Lots of companies announced earnings this week. Among the best performing were NFLX, CMCSA, and AXP, and investors reacted by buying up their stocks.
NFLX missed earnings per share (EPS) expectations by 4.8% but exceeded revenue expectations by 1.26% with $8.833B earned. The streaming service added 13 million subscribers globally, the most since 2020.
CMCSA (Comcast) exceeded expectations for both EPS by 6.8% and revenue by 2.7% and announced a 7% dividend increase, leading to a big gap up in their stock price.
AXP missed expectations for both EPS and revenue, however issued strong guidance ahead as well as a dividend boost, causing the stock price to climb to a new all-time high.
Show me where it hurts... Not every company fared as well following their earnings reports.
TSLA dropped precipitously this week after missing on both EPS and revenue expectations, along with forecasting vehicle production to slow in 2024. As counterweight, they did offer insight into their focus on new products ahead, including codename "Redwood"—an entry-level compact crossover EV car to appeal to a broader mass-market and serve as a platform for their new "robo-taxi". They're also ramping up production of their Cybertruck and working towards releasing their AI robotic humanoid named "Optimus" potentially in 2025. Despite the stock's significant beat down from its high in 2021, I remain very bullish on TSLA for the long term.
INTC actually beat expectations for both EPS and revenue however offer weak projections for sales and profit for the quarter ahead. Investors responded by selling off the stock about 13% following the announcement.
Next week is a biggie! Be on the lookout for earnings announcements from more of our favorite big tech companies, including:
Jan 30: GOOGL, AMD, MSFT, SBUX
Feb 1: AAPL, AMZN, META
SPY
QQQ
Friendly reminders from Steve:
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The following article is strictly the opinion of the author and is to not be considered financial/investment advice. Call to Leap LLC and the author of this article do not claim to be a registered financial advisor (RIA) or financial advisor. Please visit our terms of service and privacy policy before reading this article.