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Highlights from the past week

Market / Macro Economic Summary

What a difference a week makes!  I am feeling like investors are back in the mode that every time we have a decline, it seems to be short-lived and quickly bought up. After a disappointing week two weeks ago, last week the markets roared back in strong fashion.   With the lion’s share of S&P 500 companies having reported first-quarter results, the profit picture continues to brighten. While the Fed and jobs report grabbed most of the attention last week, incoming quarterly announcements have largely been beating expectations, while management commentary and outlooks have been rather upbeat, supporting recent upward revisions to estimates for 2024 profit growth.  These are all great sings for the remainder of the year.  The past week, the S&P 500 gained 0.6%, the Dow Jones gained 1.1% and the tech friendly Nasdaq gained 1.4%. 

Company Specific / Micro Economic Summary

Amazon (AMZN)

Shares rose 2% after the company reported better-than-expected revenue and earnings. On the revenue front, the  $143.3 billion exceeded the estimates of $142.5 billion while the $0.98 cents per share of earnings also beat the Wall Street expectations of $0.83 cents per share. CEO Andy Jassy said, “The combination of companies renewing their infrastructure modernization efforts and the appeal of AWS’s AI capabilities is reaccelerating AWS’s growth rate (now at a $100 billion annual revenue run rate.”

Advanced Micro Devices (AMD)

Shares of the chip maker dropped 8% on the day after reporting a top and bottom-line beat.  Earnings per share of $0.62 cents came in one penny ahead of analyst expectations. Revenue of $5.47 billion came in ahead of the estimates of $5.46 billion. The main reason for the decline was the lack of revenue acceleration for the upcoming quarter as CEO Lisa Su projected a $5.7 billion revenue (which only met Wall Street expectations) and is a 6% growth.  Most investors were expecting a higher adjustment since chips are in red hot demand.

McDonald’s (MCD)

Stock declined 1% as the company reported a mixed quarter.  On the revenue front, management reported a slight beat as $6.17 billion barely nudged the expectations for $6.16 billion.  Earnings per share of $2.70 adjusted came in short of the calls for $2.72 expected by analysts. “Consumers continue to be even more discriminating with every dollar that they spend as they faced elevated prices in their day-to-day spending, which is putting pressure on the [quick-service restaurant] industry,” CEO Chris Kempczinski said on the company’s conference call.

Pfizer(PFE)

Shares popped 6% as the company reported a top and bottom-line beat. Revenue of $14.88 billion was stronger than the call for $14.01 billion. Earnings per share of $0.82 cents was much higher than the estimates of $0.52 cents. CEO Albert Bourla increased the guidance for the full year.

Qualcomm (QCOM)

Shares rose 6% on a good quarter for the telephone chip maker.  Earnings per share of $2.44 beat calls for $2.32. Revenue of $9.39 billion also beat estimates of $9.34 billion expected from analysts. Management called out strong demand for “premium tier” or “AI-powered” smartphones.

Novo Nordisk (NVO)

Shares declined 4% on a great quarter simply because it had already run up heading into the report. Earnings per share of $0.87 beat the estimates of $0.73. Revenue for the maker of weight loss drugs Ozempic and Wegovy came in at $9.52 billion (an increase of 22%) over the estimates of $9.23 billion.

Eli Lilly (LLY)

Shares increased 7% despite the company reporting a mixed quarter.  Revenue in Q1 2024 increased 26%, driven by sales of leading drugs Mounjaro, Zepbound, Verzenio and Jardiance. Earnings per share of $2.58 adjusted exceeded the calls for $2.46 expected.  The main reason for the jump was management’s increased guidance for revenue by $2 billion for the year.

Moderna (MRNA)

Stock rose 12% as the company reported a top and bottom-line beat.  Revenue of $167 million far exceeded the analyst calls for $97.5 million. Earnings per share came in at a loss of $3.07 but Wall Street had expected them to lose $3.58. The company reiterated its full-year 2024 sales guidance of roughly $4 billion, which includes revenue from the expected launch of its RSV vaccine

Apple (AAPL)

Shares roared 7% higher on a top and bottom-line beat. Fiscal second-quarter earnings came in at $1.53 per share, while revenue was $90.75 billion. That surpassed analysts’ estimates for earnings of $1.50 per share on revenue of $90.01 billion.  The main reason for the jump was a historic $110 billion share repurchase program, the largest in company history. Tim Cook, Apple’s CEO said “During the quarter, we were thrilled to launch Apple Vision Pro and to show the world the potential that spatial computing unlocks. We’re also looking forward to an exciting product announcement next week and an incredible Worldwide Developers Conference next month.”

DraftKings (DKNG)

Shares were lower by 2% as the company reported a mixed quarter. Reported revenue of $1.175 million, an increase of $405 million, or 53%, compared to $770 million during the same period in 2023.  Earnings per share came in at a loss of $0.30 loss per share but it was one cent higher than the expectations for a $0.29 cent expected loss.

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