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Market Moves Yesterday
S&P 500 @ 5,064.20 (⬆️ 0.91%)
Nasdaq Composite @ 15,840.96 ( ⬆️ 1.51%)
Bitcoin @ $59,737.70 ( ⬆️ 1.13%)
Hey Scoopers,
TGIF! Here’s what we’re covering today!
👉 Apple stock gains pace
👉 All eyes on key labor report
👉 Coinbase beats Q1 estimates
So, let’s go 🚀
Market Wrap 📉
Equities rallied on Thursday as investors looked ahead to more corporate earnings and a key labor report that would be published today.
The uptick on Thursday followed a choppy day on Wall Street as investors reacted to the Fed’s decision to keep interest rates unchanged. Moreover, the central bank ruled out an interest rate hike as its next move.
Wall Street now thinks there is a 14% chance of a rate cut in June as corporate earnings and consumer spending remain resilient.
As of yesterday morning, 373 companies part of the S&P 500 index reported results, of which 77% topped earnings estimates and 61% surpassed revenue estimates.
Companies are on pace to report earnings growth of 6.9% and revenue growth of 3.6% in Q1.
The communications technology sector is expected to see quarterly earnings growth of 44% year over year, while margins for the healthcare and energy sectors are forecast to decline by 24%.
Trending Stocks 🔥
Expedia - The online travel company is down over 8% in pre-market after it lowered full-year guidance to a range of mid-to-high-single-digit-top-line growth. It posted revenue of $2.89 billion in Q1, above estimates of $2.81 billion.
Peloton - Shares dropped 2.5% after the company announced that CEO Barry MacCarthy would step down. The exercise equipment manufacturer also announced it would layoff 15% of its employees as it missed revenue and earnings estimates in the March quarter.
Amgen - Shares of the biotech company surged 14% as it posted revenue of $7.45 billion and earnings of $3.96 per share, above estimates of $7.44 billion and $3.87. Amgen also stated it would move its injectable obesity drug into a phase 3 trial and shelve another weight loss drug that was in development.
Apple Stock Is On the Move
Apple shares are up 7% in pre-market today after the iPhone maker reported fiscal Q2 results that topped estimates while announcing an expanded stock buyback program.
Apple announced its largest buyback program in history, totaling $110 billion, an increase of 22% from its last authorization.
Here are a few key numbers for the tech giant in Q2:
Revenue of $90.75 billion vs. estimates of $90 billion
Earnings per share of $1.53 vs. estimates of $1.50
iPhone sales of $45.96 billion vs. estimates of $46 billion
Services sales of $23.9 billion vs. estimates of $23.37 billion
Overall sales were down 4%, while iPhone sales slumped 10%, suggesting weak demand for the current generation of smartphones released last year.
Apple’s Services business increased sales by 14.2% and remains a crucial driver of growth. This business includes revenue earned from subscription services, licensing deals with search engines, payments, and warranties.
Comparatively, Other Products sales (Apple Watch and AirPods) were down 10% at $7.9 billion.
Revenue from Greater China was down 8% at $16.37 billion, compared to estimates of $15.25 billion, quelling worries that Apple may lose market share to domestic players such as Huawei and Oppo.
Nonfarm Payrolls Data for April
It’s likely that hiring continued at a brisk pace in April even as Wall Street looks for cracks in the labor market that could result in interest rate cuts.
Nonfarm payroll data for April will be released today and are expected to show a gain of 240,000. On average, the U.S. economy created 276,000 jobs a month in 2024.
The cost of labor rose by 4.7% in Q1, above estimates of 4%. A separate report showed that initial filings for unemployment benefits were unchanged at 208,000 last week but below the forecast of 212,000.
Coinbase Slumps Despite Q1 Beat
Coinbase reported better-than-expected Q1 results but the stock is down 2% in pre-market trading.
The company reported sales of $1.64 billion, above estimates of $1.34 billion. Its net income totaled $1.18 billion or $4.40 per share, compared to a year-ago loss of $78.9 million or $0.34 per share.
Coinbase’s profits include a $650 million mark-to-market gain on crypto assets held on its balance sheet.
Coinbase Q1 Revenue Comparison
Its consumer transaction sales rose 100% to $935 million in Q1, while total transaction revenue almost tripled to $1.08 billion. Comparatively, subscription and services revenue totaled $511 million.
Coinbase stock is up close to 400% in the last year primarily due to the rally in Bitcoin and other digital assets, which results in higher trading volumes and fees for the crypto exchange.
In recent years, Coinbase has looked to diversify its revenue streams. For instance, it is now a custody partner for several spot Bitcoin ETF issuers, including BlackRock. These funds have attracted more than $50 billion in investments in Q1.
Headlines You Can't Miss!
China’s EV sector needs to adapt quickly
AI might disrupt India’s outsourcing industry
Sony and Apollo express interest in $26 billion Paramount bid
Block shares jump as it beat Q1 estimates
Bored Ape Yacht Club NFTs are down 90% from 2021
Chart of The Day
Did you know that transport accounts for 25% of global carbon dioxide emissions?
The above chart shows us that taking a cruise ship, flying domestically, and driving alone are some of the most carbon-intensive travel methods.
Cruise ships use heavy fuel oil that has high carbon content. The vessels must also generate enough power for onboard amenities such as electricity, ACs, and entertainment systems.
While EVs have a lower carbon footprint, the batteries required to power them need to be charged using energy that comes straight off the electrical grid. In most countries, the grid is powered by fossil fuels.
Meme of the Day
DISCLAIMER: None of this is financial advice. The newsletter is strictly educational and is not investment advice or a solicitation to buy or sell assets or make financial decisions. Please be careful and do your own research.