Please allow me a moment to express my sincere gratitude for the trust placed in me and my firm to help you with your most valued treasure, your financial future.
Palacios’ Perspectives Week ending November 29th, 2024
From Wall Street to Main Street Highlights from the past week
Market / Macro Economic Summary Markets finished off the month of November on a high note as the main event, the presidential election, took place and brought more certainty to equity markets. Despite a holiday-shortened trading day on Friday, the market indexes all closed higher on the day, the week, and the month. Specifically, the S&P 500 and the Dow Jones Industrial Average both closed at all-time record highs. For the month of November the Nasdaq rose 6.2% while the Dow shot up 7.5% and the S&P 500 also gained 5.7%. In terms of economic data in the past week, the gross domestic product (GDP) and inflation data both came in supportive of higher market performance. Third-quarter U.S. growth demonstrated the economy has held strong, growing by 2.8%, in line with previous estimates. The core personal consumption expenditure (PCE) price index, a favorite inflation indicator of the Federal Reserve that excludes more volatile food and energy prices, rose 2.8% year over year in October. This shows that inflation remains under control and the Fed could decrease interest rates further. Company Specific / Micro Economic Summary Crowdstrike (CRWD) Shares traded lower by 5% despite a top and bottom line beat. Earnings per share of $0.93 cents were much better than the analyst expectations of $0.81 cents. Revenue of $1.01 billion was also higher than the $983 million Wall Street was looking for. CEO George Kurtz said the company surpassed the $4 billion annual recurring revenue run rate for the first time in company history. More importantly, despite the technological glitch that downed lots of businesses in the summer, customer retention rate remains at over 97%! Kohl’s (KSS) Shares of the retailer were down 16% as management missed the mark on almost all important metrics for the quarter. Revenue of $3.51 billion was 5.4% lower than the estimates of $3.71 billion. Earnings per share of $0.20 cents were also way off the mark of the analyst estimates of $0.28 cents. CEO Tom Kingsbury blamed soft apparel and footwear sales and announced he will be stepping down effective Jan 15th. He will be replaced by Michael’s CEO Ashley Buchanan who previously led the Sam’s club division at Walmart. Dell Technologies (DELL) Shares were down 13% as the company reported a mixed quarter and lighter guidance despite robust AI sales. Revenue of $24.4 billion was shy of the Wall Street expectations of $24.7 billion. Earnings per share of $2.15 were higher than the calls for $2.06. Guidance for the upcoming quarter of between $24-$25 billion was short of expectations of $25.57 billion. Earnings per share were also forecasted to be $2.50 while Wall Street was looking for $2.65. Workday (WDAY) Shares fell 7% despite reporting a strong quarter with a top and bottom-line beat. Revenue of $2.16 billion came in stronger than the estimates of $2.13 billion. Earnings per share of $1.89 were also ahead of the calls for $1.76. The main issue with the report was that the guidance for the upcoming quarter was shy of expectations, specifically the 14% growth in revenue estimate for next year.
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
