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Market Moves Yesterday

S&P 500 @ 5,446.68 ( ⬇️ 1.37%)

Nasdaq Composite @ 17,194.14 ( ⬇️ 2.30%)

Bitcoin @ $64,411.23 ( ⬇️ 1.03%)

Hey Scoopers,

Welcome to Friday! Here’s what we’re covering today:

👉 Apple tops estimates

👉 Amazon disappoints on lower guidance

👉 Intel plunges post Q2 results

So, let’s go 🚀

Market Wrap 📉

Equities sold off on Thursday, with the Dow Jones Industrial Average tumbling close to 500 points as investors sweat over the possibility of an upcoming recession.

Fresh economic data stoked fears of a recession and the notion that the central bank could be late to start cutting interest rates.

For instance, initial jobless claims rose the most since August 2023, while the ISM manufacturing index, a barometer of factory activity, came in at 46.8%, signaling a contraction in economic activity.

Today, investors will closely follow non-farm payroll data for July. Economists expect a growth of 185,000 jobs, down from June’s gain of 206,000.

On the earnings front, energy giants such as Chevron and Exxon Mobil will report Q2 results before the market opens.

Trending Stocks 🔥

Eli Lilly - Shares of the healthcare giant ticked 3.5% higher after its Zepbound drug showed a lower risk of heart failure in a late-stage study, the latest sign that some weight loss drugs have other benefits.

Procter & Gamble - The consumer goods behemoth rose over 3% despite missing revenue estimates in fiscal Q4 of 2024.

Shake Shack - The stock rose close to 14% after it reported revenue of $316 million, higher than estimates of $314 million.

Apple Beats Q3 Estimates

Apple announced its fiscal Q3 of 2024 results (ended in June) and reported:

• Revenue of $85.78 billion vs. estimates of $84.53 billion

• Earnings per share of $1.40 vs. estimates of $1.35

• iPhone sales of $39.3 billion vs. estimates of $38.81 billion

• Wearables revenue of $8.10 billion vs. estimates of $7.79 billion

• Services revenue of $24.21 billion vs. estimates of $24 billion

Apple’s sales rose by 5%, and the company expects the top line to grow at a similar pace in the current quarter. It also expects the Services business to grow at the same rate as the previous three quarters, which is around 14%.

Apple’s flagship business is the iPhone, which accounted for 46% of total sales. While device sales beat estimates, it fell by 1% year over year in Q3.

The upcoming launch of Apple’s AI features should result in iPhone device upgrades and push revenue growth higher in the next 12 months.

Elsewhere, iPad sales grew 24% to $7.16 billion in fiscal Q3, while Mac sales rose 2% to $7 billion.

Apple Services includes verticals such as Apple Care, Apple TV+, and Apple Music, which remain the company's most important growth category.

Apple emphasized the number of active devices increased across regions. It early 2024, Apple claimed it had 2.2 billion active devices and 1 billion paid subscriptions. The active device count is crucial as it signifies a group of existing customers that can be monetized by selling profitable services.

Lastly, Apple sales fell over 6% to $14.72 billion in greater China as it faces competition from local smartphone rivals.

Amazon Stock in Freefall

Shares of Amazon are down over 8% in pre-market following the company’s Q2 results where it reported:

• Revenue of $147.98 billion vs. estimates of $148.56 billion

• Earnings of $1.26 per share vs. estimates of $1.03 per share

• Amazon Web Services revenue of $26.3 billion vs. estimates of $26 billion

• Ad sales of $12.8 billion vs. estimates of $13 billion

Amazon estimates sales between $154 billion and $158.5 billion, while Wall Street expects Q3 sales of $158.24 billion. In Q3, Amazon forecast operating income between $11.5 billion and $15 billion, lower than consensus estimates of $15.3 billion.

Amazon explained sluggish growth in the core retail business will weigh heavily on revenue as it competes with discount sites such as Temu and Shein. Its online store sales rose 5%, while third-party seller services grew by 12% in Q2.

Amazon’s cloud division, AWS, grew by 19%, slower than peers Microsoft and Google. AWS now accounts for 18% of total revenue, while operating income in the business stood at $9.3 billion, accounting for 63% of the companywide total.

Further, high-margin ad sales rose 20%, driven by sponsored product listings in the online store. Amazon’s focus on cost-cutting allowed it to double its net income to $13.5 billion or $1.26 per share.

Intel Disappoints in Q2

Shares of semiconductor giant Intel are down over 20% in pre-market after it announced Q2 results, reporting:

Revenue of $12.83 billion vs. estimates of $12.94 billion

Earnings per share of $0.02 vs. estimates of $0.10

Intel said it would lay off over 15% of its workforce as part of its $10 billion cost-reduction plan. Moreover, the chip maker said it will not pay a dividend in Q4 while lowering capital expenditures by over 20%.

Company sales were down 1% in Q2 and it swung to a GAAP loss of $1.61 billion compared to a net income of $1.48 billion in the year-ago period.

While Nvidia and AMD are seeing strong sales in the data center segment, Intel’s revenue in this business stood at $3.05 billion, down 3% from year over year.

In the current quarter, Intel expects sales to range between $12.5 billion and $13.5 billion, with an adjusted loss of $0.03 per share. Comparatively, analysts forecast Q3 sales at $14.35 billion with earnings per share of $0.31.

Intel has trailed the broader markets as the stock is now down 50% in 2024, while the S&P 500 index has gained 14% in 2024.

Headlines You Can't Miss!

Intel’s weak performance drags chip stocks lower

Nintendo's profit falls 55% on ageing console sales

Japan stock sell-off indicates a fundamental shift, says Goldman

Li Auto’s July deliveries hit new record

MicroStrategy’s Bitcoin stockpile stands at $14.2 billion

Chart of The Day

In 2024, the median salary of the average American homebuyer has risen to $104,339, up from $88,000 in 2022.

Despite record home prices, housing demand remains robust amid high mortgage rates.

On the other hand, housing inventory is rising as the number of homes for sale rose by 19% year over year in May.

Meme of the Day

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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.