Week ending November 22nd, 2024
From Wall Street to Main Street
Highlights from the past week
| Market / Macro Economic Summary Market Indexes finished higher on the week across the board as we digested earnings from the world’s most valuable company. Nvidia’s earnings were the most anticipated earnings of the week and certainly the fourth quarter. The Dow Jones Industrial average closed the week higher by 1.96% as the S&P 500 was up 1.68% and the Nasdaq came in at 1.73%. We also saw bond yields drop slightly as well as the VIX, which hopefully readers will recall, is the market’s main measurement of risk in the market. As we head into the the last trading days before Thanksgiving holiday, markets are poised to remain headed in a northern trajectory. Company Specific / Micro Economic Summary Walmart (WMT) Shares of the world’s largest retailer were up 4.5% as the company reported earnings that came in at a bottom and top-line beat. Earnings per share of 0.58 cents were five cents above expectations. Revenues of $168 billion also came in stronger than the $167 billion calls from Wall Street. CEO Doug McMillion said customers were enjoying more convenient delivery of goods as all three segments grew… from pick up of goods, to in-store traffic and delivery from the store. Target (TGT) Shares of the retail rival plummeted a shocking 21% as their quarterly report was filled with shortcomings. Revenue of $25.7 billion was short of the estimates of $25.9 billion. Earnings per share of $1.85 where not even remotely close to the Wall Street expectations of $2.30. CEO Brian Cantrell tried to spin the 2.4% increase in traffic and 11% growth in the digital channel sales but investors dropped the stock as expenses increased and guidance for the ever-important holiday quarter was also disappointing. Snowflake (SNOW) Shares of the software-as-a-service company shot up 31% on the heels of a strong quarterly report. Earnings per share of 0.20 cents were five cents ahead of the estimates for 0.15 cents. Revenue of $942 million also came in way ahead of the $898 million most analysts were looking for. CEO Sridhar Ramaswamy said product revenue was up 29% and remaining performance obligations (contracted revenue) grew 55% to a historic backlog of $5.7 billion dollars. Nvidia (NVDA) Shares of the world’s newly-minted, largest company fell 1.7% as it reported a top and bottom-line beat. As in the past 6-7 quarters, my goal was to see the stock “hold the line” as the appreciation in the stock price had already been evident going into earnings. This time the stock had been up approximately 185% heading into this report, so having it only drop 1% was more than acceptable. Earnings per share of 0.81 cents was six cents ahead of heightened expectations. Revenue of $35.1 billion was also $2 billion higher than analyst’s calls for $33.1 billion. That is $2 billion more, in one single quarter!!!! That is simply unheard of. CEO Jensen Huang reiterated that demand for Hopper and Blackwell chips is incredible and the AI story is still in growth mode. Palo Alto (PANW) Shares of the cyber security company bounced around but settled higher by 1.7%. Earnings per share of $1.56 were higher than the calls for $1.48. Revenue of $2.14 billion was higher than Wall Street estimates of $2.12 billion. CEO Nikesh Arora said “platformization” or brining most segments of cyber security under one main platform continued to grow and improve the security landscape. Guidance was also raised for the year and a two-for one stock split as well. |
| Parting Thoughts We welcome an opportunity to discuss the above detail and wish you much success in the rest of your week! Regards, Erick J. Palacios, MBA Wealth/Fiduciary Advisor |