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From Wall Street to Main Street

Highlights from the past week

Market / Macro Economic Summary

Markets roared once again on Friday as we concluded a week that brought good earnings, a Federal Reserve meeting that indeed kept rates the same and more economic data that supports a strong and stable economy. S&P 500 jumped 1.1% Friday and 1.4% for the week as the Dow ran up .4% on the day and 1.4% on the week. Lastly, the Nasdaq jumped 1.7% on Friday and 1.1% for the week. I have been saying that the Fed would keep rates the same, so this was priced into the markets.  The surprise for the week came in the jobs report that showed the economy having added a whopping 353,000 payrolls in January, double the consensus estimate.  The set up for the remainder of the year does remain favorable and this coming week is yet another week large blue-chip companies reporting.  We will hear from the likes of Disney, Caterpillar, Ford, Uber, McDonald’s, Eli Lilly and CVS Health to name a few.

Company Specific / Micro Economic Summary

Amazon (AMZN)

Shares surged nearly 8% to its highest close since December 2021 after the company surpassed earnings forecasts and projected first-quarter revenue will increase by 8% to 13%. Earnings per share of $1.01 beat calls for $0.81. Revenues of $169.96 billion also beat estimates of $166.04 billion.  CEO Andy Jassy said Q4 was a record-breaking Holiday shopping season.

Chevron (CVX)

Shares rose 2.9%, leading Dow gainers, after the energy producer topped earnings expectations and raised its dividend. Earnings per share of $3.49 was better than the calls for $3.25.  Management returned a record $26.3 billion cash returned to shareholders in 2023 and will increase the dividend by 8% in 2024.

Exxon Mobil (XOM)

Shares were marginally higher as earnings for the recent quarter came in at $2.48 per share on revenue of $84.34 billion. Wall Street expected earnings per share of $2.21 per share on revenue of $91.81 billion. 

Apple (AAPL)

Shares declined 2.7% as the company reported a good quarter but China worries troubled investors. Earnings of $2.18 per share were better than the estimates of $2.09.  Revenue of $119.58 billion was also higher than the calls for $118.00 billion.  Major concern for CEO Tim Cook is a way to reverse the 12.9% sales loss the company saw in China.

Meta aka Facebook (META)

The major winner on the week’s earnings were Meta shareholders.  Shares soared 20% to the upside on a flawless quarter.  Earnings per share of $5.33 on revenue of $40.11 billion was better than the $4.94 on revenue of $39.01 billion that Wall Street was looking for.  CEO Mark Zuckerberg also boosted its stock buyback authorization by $50 billion and initiated a quarterly dividend of $0.50 per share.

Qualcomm (QCOM)

Shares declined 2% on the heels of a strong quarter.  Earnings per share of $2.75 per share were better than the Wall Street estimates of $2.37.  Revenue of $9.94 billion for the first quarter also come in above the $9.51 billion analysts were looking for.

Mastercard (MA)

Shares increase by 1% as the firm reported a top and bottom-line beat.  Earnings per share of $3.18 came in better the expectations of $3.08.  Revenue of $6.55 billion was also higher than the $6.48 billion Wall Street was looking for.

Alphabet aka Google (GOOG)

shares rose 3% as management reported another strong quarter and a 13% revenue growth over the same period a year ago.  Earnings per share of $1.64 came in better than the calls for $1.60.  Revenue ended the quarter at $86.31 billion were also ahead of the estimates of $85.26 billion. 

Advanced Micro Devices (AMD)

Shares fell 2% on the heels of a mixed quarter, which for as much as the company had risen heading into the results.  Earnings per share of $0.77 were on the number of the expectations from Wall Street analysts.  Revenue of $6.17 billion for the fourth quarter was ahead of the calls for $6.12 billion. CEO Lisa Su commented, “We finished 2023 strong, with sequential and year-over-year revenue and earnings growth driven by record quarterly AMD Instinct GPU and EPYC CPU sales and higher AMD Ryzen processor sales.”

Microsoft (MFST)

Shares were up 1% as the company held the strong stock action leading up the report. CEO Satya Nadella reported earnings per share of $2.93 which exceeded the calls for $2.76.  Revenue on the quarter came in at $62.02 billion while Wall Street was looking for $61.03 billion. Sayta said, “We’ve moved from talking about AI to applying AI at scale. By infusing AI across every layer of our tech stack, we’re winning new customers and helping drive new benefits and productivity gains across every sector.”

Starbucks (SBUX)

Shares fell 1% as the company reported a double-miss quarter.  Earnings per share of $0.90 per share were just shy of the analyst estimates of $0.92.  Revenue grew 8% to $9.43 billion but were just short of the calls for $9.65 billion.  Same store sales grew 5%.  CEO Laxman Narasimhan highlighted the loyalty of the customer base, growth in rewards program membership and spending per member.

Parting Thoughts

We welcome an opportunity to discuss the above detail and wish you much success in the rest of your week!

Regards,

E.Palacios

Erick J.  Palacios, MBA

Wealth/Financial Advisor