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From Wall Street to Main Street

Highlights from the past week

Market / Macro Economic Summary

The market indexes ended the week on the lower side as the Dow Jones lost .4%, S&P 500 was down .1% and the Nasdaq was down 1.3%. This was mainly due to the stronger-than-expected producer price data (PPI) and consumer price index (CPI) as published by the Labor Department. I will say it once again so as to ensure that you, my clients, understand where I see this playing out.  I feel that this is good news, strong PPI and CPI figures are showing the US economy is doing just fine…..despite the mainline media still watching and waiting for a “supposed” recession.  The Fed has been given a clear light to keep rates higher, hence why the markets took a breather this week.  But as we have seen in the last year, the markets can perform well with or without the Fed’s help.

Company Specific / Micro Economic Summary

DataDog (DDOG)

Shares were down 1.87% on a good quarterly report.  Earnings per share of $0.44 cents were on par with the estimates.  Revenue of $589.65 million for the fourth quarter was better than the calls for $566.70 million.  The monitoring and security platform for cloud applications grew their fourth quarter revenue by 26%. This growth underscores the company’s success in attracting and retaining customers, particularly larger enterprises, as shown via a 25% increase in customers with an annual recurring revenue (ARR) of $1 million or more.

Coca-Cola Company (KO)

Shares rose 1.5% on a top and bottom-line growth. Earnings per share of $0.49 cents on revenue of $10.85 billion for the fourth quarter were both better Wall Street’s expectation of $0.48 and $10.66 billion, respectively.  Global volume grew by 2% for the quarter and the full year.  Revenues grew 7% for the quarter and 6% for the full year. 

Kraft Heinz (KHC)

Shares declined 3.7% as the quarter came in mixed.  Earnings per share exceeded estimates while revenues of $6.86 billion were short of the calls for $6.98 billion.  Organic sales were down by .7% while gross profit margin increased to 33.5% for the full year, reflecting a 280-basis point improvement. Management also announced a $3.0 billion share repurchase program.

Twillio (TWLO)

Shares declined 13.5% as the technology company beat on the top and bottom lines.  While earnings per share of $0.86 came in better than the $0.58 cents analysts expected, revenues of $1.08 billion were marginally higher than the calls for $1.04 billion. Management’s weak guidance for 2024 was a main source of the decline.

Cisco (CSCO) Shares sold off 9% as the company reported a good quarter but dampened spirits with its outlook. Earnings per share of $0.87 cents, adjusted, exceeded the estimates of $0.84 cents.  Revenue of $12.79 billion nudged above the calls for $12.71 billion. CEO Chuck Robbins said the company expects to cut about 5% of its workforce.

Occidental Petroleum (OXY)

Shares jumped slightly as the company reported a mixed quarter.  Earnings per share of $0.74 cents was on par with estimates. Revenue of $7.52 billion surpassed estimates of $7.13 billion.

John Deere (DE)

Shares fell 4% despite the company reporting a good quarter. Earnings per share of $6.23 from sales of $10.4 billion. Analysts were looking for earnings per share of $5.26 from sales of $10.3 billion. Management’s guidance made investors nervous as net income is expected to come in at about $7.6 billion for the year.  In November they had said it would be about $8 billion.

Roku (ROKU)

Shares tumbled 24% after the streaming service provider’s fourth-quarter loss exceeded expectations.  The earnings per share came in at a loss of 55 cents for the fourth quarter, compared with the 52 cents per share analysts expected. Revenue of $984 million beat estimates of $968 million.

The Trade Desk (TTD)

Shares soared more than 17% after a strong quarter.  The company, which operates a cloud-based platform for advertising buyers, released stronger-than-expected first-quarter guidance. $0.41 per share on revenue of $605.80 million for the fourth quarter ended December 2023. The consensus earnings estimate was $0.44 per share on revenue of $581.94 million.

Applied Materials (AMAT)

Shares surged 6.4% and ended at a record high above $202 after the semiconductor equipment company reported stronger-than-expected quarterly results. First-quarter earnings per share of $2.13, excluding items, bested estimates of $1.90 per share. Revenue for the period came out at $6.71 billion, topping the $6.48 billion estimate.

Parting Thoughts

Markets are off on Monday for President’s Day.  This week of earnings will hinge on one name though; the Nvidia earnings report will take place Thursday.  After a 2023 stock performance of over 200 plus percent, this year has brought another fifty percent increase so far. 

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

Plan to Prosper Wealth Management’s clients & employees will from time-to-time hold securities mentioned above. Commentary is not endorsements or recommendations of any securities.