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Highlights from the past week

Market / Macro Economic Summary

Markets had a great week on the heels of a Consumer Price Index report that showed inflation remains in a decline and the economy remains on track for a soft landing. The S&P 500 index rose for the fourth week in a row and closed up 1.5% for the week; the Dow Jones Industrial Average gained 1.2% on the week and closed above the 40,000.00 level for the first time in history; the Nasdaq Composite rose 2.1% for the week. The March to April CPI report rose by .3% when the expectations were for .4% and stand at 3.6% on a projected annualized basis, the lowest reading since April 2021. This is great news showing that inflation is falling and coupled with a strong economy, is a very bullish signal.

Company Specific / Macro Economic Summary

Alibaba (BABA)

Shares fell 6% on the back of a mixed quarter. Revenues topped expectations at $30.39 billion dollars when expectations called for $30.67 billion. Earnings per share, however, missed by two pennies as they reported $1.42 when analysts projected $1.40. CEO Wu vowed to “reignite” growth in the e-commerce firm with further investments. 

Walmart (WMT)

Shares of the retail giant rocketed up 7% on a strong quarter. Revenues of $171.91 billion were well ahead of the calls for $169.26 billion. Earnings per share of 60 cents exceeded the Wall Street calls of 55 cents. Doug McMillon, President and CEO, said, “We’re people-led and tech-powered, and that combination is propelling our business.”

Cisco Systems (CSCO)

Shares dropped 2% as the tech provider showed a top and bottom-line beat.  Earnings per share of 88 cents were much better than the 82 cent expectations. Revenues of $12.7 billion also exceeded calls of $12.63 billion. CFO Scott Heron said revenue and gross margins improved in the quarter and the Splunk acquisition will be a catalyst for growth in the future quarters.

Applied Materials (AMAT)

Shares for the chip maker were little changed as the company reported a strong quarter. Revenues came in at $6.646 billion, beating the consensus estimate of $6.537 billion. Adjusted earnings of $2.09 per share beat analyst estimates of $1.99 per share. Gary Dickerson, the President and CEO, stated that the company maintained strong performance in 2024, with revenue and earnings for the second quarter aligning with the higher end of their projections. The company’s leading portfolio of materials includes engineering technologies crucial for advancing AI, IoT, electric vehicles, and clean energy.

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