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From Wall Street to Main Street

Highlights from the past week

Market / Macro Economic Summary

Markets have rebounded nicely as earnings come in strong as expected and the Federal Reserve Chair Powell kept rates the same during the week’s board of governors meeting.  For the week, the S&P rallied almost 6%, Dow Jones was up 5.1% and Nasdaq was up 6.6%.  Markets are beginning to read between the lines that the Fed is done with rate hikes (which has been my stance for a while) and this is a positive note for stocks. Another key economic data point, the October nonfarm payroll report, came in at the economy adding only 150,000 jobs when the gain had averaged 217,000 in recent past, and analysts expected 180,000. One last important metric that helped propel stocks to the positive was the yield on the 10-year treasury hit 4.5% as they had been 5% within the last week. 

Company Specific / Micro Economic Summary

McDonald’s (MCD)

Shares closed 1.7% higher as the company reported a top and bottom-line beat.  Earnings of $3.19 per share on revenue of $6.69 billion for the third quarter were higher than the estimates of $3.00 per share on revenue of $6.23 billion.   CEO Chris Kempczinski said global systemwide sales growth were 11% while same store sales grew by 8.8%.  From an international standpoint, China and Japan’s recovery helped bolster international sales growth of 10.5%.

Advanced Micro Devices (AMD)

Shares rose about 3% as the company reported a top and bottom-line beat. Earnings per share of $0.70 were better than the $.68 cents analysts were looking for.  Revenue of $5.80 billion for the third quarter also beat Wall Street’s calls for $5.40 billion. CEO Lisa Su said the company expects data center GPU revenue to exceed a $2 billion dollar run rate in 2024 as she expects generative AI to continue to dominate client demand to build out capacity. 

CVS Health (CVS)

Shares were up 2% as the company reported earnings of $2.21 per share on revenue of $89.76 billion for the third quarter. Consensus Wall Street earnings estimates were $2.13 per share on revenue of $88.26 billion.  Sales in the quarter grew by 11% while the CVS Health insurance segment grew 17% to $26.30 billion. 

Roku (ROKU)

Shares soared 30% as the company beat on the bottom line and active accounts.  Earnings per share came in at a loss of $2.33 versus estimates of a loss of $2.12.  Revenue of $912 million were better than the calls for $855.2 million. Active users came in at 75.8 million which exceeded the estimates of 75.33 and 2.3 million more accounts than the prior quarter. Management also said it projects fourth quarter revenue to exceed Wall Street estimates.

Qualcomm (QCOM)

Shares rose 3% as the chip maker reported a strong quarter.  Earnings per share of $2.02 beat calls for $1.91 and revenue of $8.67 billion was also higher than the $8.51 billion Wall Street expected.  CEO Christiano Amon said company sees signs of stabilization of demand for 3G, 4G and 5G chips.

Apple (AAPL)

Shares were 3% lower as CEO Tim Cook reported its fourth straight quarterly sales decline and issuing a lukewarm forecast for the current quarter.  Earnings of $1.46 per share on revenue of $89.50 billion for the fiscal fourth quarter.  Analysts were looking for earnings of $1.39 per share on revenue of $84.69 billion.   Tim tried to highlight that the September quarter revenue was a record for iPhone and an all-time revenue record in Services.

Palantir (PLTR)

Shares rocketed 20.4% as the company reported a strong quarter.  Earnings per share of 7 cents were better than the 6 cents Wall Street was looking for.  Revenues of $558 million were 17% growth over the prior quarter and better than the $556 million analysts were looking for.  Management said defense revenue rose 12% to $308 million but commercial revenue was 23% higher to $251 million and exceeding estimates for $234 million. 

Eli Lilly (LLY)

Shares jumped 4.7% as the company reported a very strong quarter on the back of Mounjaro sales.  Revenue in Q3 2023 increased 37% to $9.5 billion and clearly exceeded the estimates of $8.97 billion. Earnings per share of 10 cents were also above the estimates of a loss of 18 cents.  CEO David Ricks said its guidance for the next quarter had to be cut based on some tax fluctuations the company is working through. 

Starbucks (SBUX)

Shares of the coffee retailer jumped as the company reported a top and bottom-line beat. Earnings of $1.06 per share were above the Wall Street estimates of $.97 cents.  Revenues of $9.37 billion for the fiscal fourth quarter were also ahead of the estimates of $8.81 billion.  The company beat expectations by 4.95% while revenue grew 11.40% on a year-over-year basis. CEO Laxman Narasimhan said “Notably, we continue to see the positive impact of our Reinvention on our partner and customer experiences, proof points that we can continue to create, grow and strengthen our business while creating value for all.”

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

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.