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Bulls, Bitcoin, & Beyond
Market Moves Yesterday
S&P 500 @5,505.00 ( ⬇️ 0.71%)
Nasdaq Composite @ 17,726.94 ( ⬇️ 0.81%)
Bitcoin @ $67,752.79 ( ⬆️ 4.11%)
Hey Scoopers,
Happy Monday! Here’s what we’re covering today👇
👉 Google’s upcoming earnings
👉 Tesla’s Q2 estimates
👉 Bitcoin stages a comeback
So, let’s go 🚀
Market Wrap 📉
Equity indices retreated on Friday as Wall Street wrapped up last week, defined by a rotation out of the year’s mega-cap winners in favor of smaller names.
The S&P 500 and Nasdaq fell 1.97% and 3.65%, respectively, marking the biggest weekly decline since April. Moreover, the tech-heavy Nasdaq also snapped a six-week win streak.
Meanwhile, S&P 500 futures are in positive territory in pre-market as traders monitor the U.S. political landscape after President Joe Biden's withdrawal from the presidential race on Sunday.
On the earnings front, investors will be looking toward Verizon’s quarterly results this morning. No major economic updates are expected until later in the week.
Trending Stocks 🔥
CrowdStrike-Shares fell over 11% after a software update by the cybersecurity firm caused a major IT outage that impacted businesses across sectors.
Plug Power - Shares of the green energy company tumbled 14% as it announced plans to raise $200 million in equity. The stock is down 45% in 2024 and over 96% from all-time highs.
Comerica - Shares slumped more than 10% after the bank posted Q2 results that reflected a decrease in net income. It posted a net interest income of $533 million, which was higher than estimates of $530.5 million.
Google’s Q2 Sales Forecast at $84.2 Billion
Google’s parent company, Alphabet, is forecast to announce its Q2 earnings on Tuesday. Analysts tracking the tech giant expect:
👉 Revenue to rise by 12.9% to $84.2 billion
👉 Earnings per share to expand by 28.5% to $1.85
Valued at $2.2 trillion by market cap, Alphabet owns dominant businesses such as YouTube and Google Search, attracting massive amounts of web traffic and ad revenue.
Despite its size, Alphabet is positioned for enviable growth. For instance, Wall Street expects it to expand earnings by more than 21% annually in the next five years.
So, priced at 23.4x forward earnings, GOOGL stock is quite cheap despite returning 190% in the last five years.
Earlier this year, Alphabet announced it would pay shareholders a quarterly dividend of $0.20 per share, indicating a yield of just 0.45%, costing the company $10 billion each year.
Alphabet generated $16.8 billion in free cash flow in Q1, which means it generates enough profits to meet its dividend obligations.
With $108 billion in cash and $13.2 billion in debt, Alphabet's balance sheet is strong, making it one of the best stocks to own in 2024.
Can Tesla Surprise Wall Street?
Tesla touched a trillion-dollar valuation in 2021 but has since underperformed the broader markets. Today, the EV maker is valued at $762 billion, which is 41% below all-time highs.
Despite the drawdown, Tesla stock is priced at 60x forward earnings, while its earnings are forecast to contract by 17% year over year in 2024.
In Q2 of 2024, analysts expect Tesla’s:
👉 Revenue to fall by 0.80% to $24.72 billion
👉 Earnings to fall by 32% to $0.62 per share
Tesla’s Vehicle Deliveries
Source: Statista
In recent months, Tesla has been struggling with rising competition, which has forced the company to cut vehicle prices, driving profit margins and revenue lower.
Comparatively, Tesla delivered 444,000 vehicles in Q2, much higher than estimates of 420,000.
Moreover, investors will be closely watching Tesla’s plans to unveil the robotaxi, a driverless taxi that could potentially unlock billions of dollars in sales in the upcoming decade.
Bitcoin Rebounds to Touch $68k
Bitcoin, the world’s largest cryptocurrency, rallied over the weekend to trade briefly over $68,000 on Sunday. The digital asset has jumped over 20% since trading around $55k earlier this month.
Source: SoSo Value
One key primary driver of the near-term momentum is the inflows into Bitcoin ETFs. According to SoSoValue, U.S. spot BTC ETFs recorded their 11th consecutive day of positive flows on Friday, with BlackRock accumulating $19 billion in net inflows since inception.
Additionally, Bitcoin’s recent gains can be tied to Joe Biden’s exit from the Presidential race, raising the odds of a Trump win, who has expressed views in favor of the crypto industry.
Headlines You Can't Miss!
Joe Biden drops out of 2024 Presidential race
China unexpectedly cuts interest rates
How CrowdStrike caused a global IT outage
Markets could unwind the Trump trade
JPMorgan is cautious on Bitcoin
Chart of The Day
According to Warren Buffett, it’s essential to identify quality companies that have the potential to deliver game-changing returns over time.
Buffett, known as the Oracle of Omaha, states you need to invest in companies that have the following traits:
High-quality managers
Attractive return on capital
Recession-resistant businesses
A competitive moat and
Top-notch culture
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.