Bulls, Bitcoin, & Beyond

Market Moves Yesterday

S&P 500 @ 5,427.13 ( ⬇️ 2.31%)

Nasdaq Composite @ 17,342.41 ( ⬇️ 3.64%)

Bitcoin @ $64,184.66 ( ⬇️ 1.71%)

Hey Scoopers,

Happy Thursday! Are you ready for an exciting newsletter?

👉 Ford tanks 11%

👉 Chipotle continues to expand

👉 A sluggish housing market

So, let’s go 🚀

Market Wrap 📉

Underwhelming reports from mega-cap companies such as Tesla and Alphabet drove the equity markets lower. In fact, indices such as the S&P 500 and Nasdaq Composite posted their worst session since 2022.

Alphabet fell over 5% on lower-than-forecast YouTube sales while beating revenue and earnings estimates. Elsewhere, Tesla slumped 12.3%, posting its worst day since 2020, on weaker-than-expected results and a 7% drop in auto sales.

Other tech stocks, such as Nvidia and Meta, also pulled back by 6.8% and 5.6%, respectively. The sell-off was driven by a perfect storm of an overbought market, a higher earnings bar, and a seasonally weak period for equities.

Despite these misses, the earnings season is off to a strong start. Around 25% of the S&P 500 companies have reported Q2 earnings, of which 80% have topped estimates.

Today, companies such as American Airlines, Honeywell, and Hasbro will report Q2 results. Moreover, jobless claims data and preliminary Q2 GDP data will be released before the market opens.

Trending Stocks 🔥

Lamb Weston - The potato and french fry company tanked 28% after it reported revenue of $1.61 billion and earnings of $0.78 per share, below estimates of $1.70 billion and $1.26 per share.

Enphase Energy - Shares of the solar energy giant popped 12.8% after posting stronger-than-expected guidance for Q3. It expects sales between $370 million and $410 million, compared to estimates of $404 million.

ServiceNow - The software company jumped 7% after posting revenue of $2.62 billion and earnings of $3.13 per share, higher than estimates of $2.61 billion and $2.84 per share, respectively.

Ford Motor Misses Earnings Estimates

Ford Motor failed to beat Q2 earnings estimates and surpassed revenue forecasts in Q2 of 2024. In the June quarter, Ford reported:

👉 Automotive revenue of $44.81 billion vs. estimates of $44.02 billion

👉 Earnings per share of $0.47 vs. estimates of $0.68

The automaker raised its full-year free cash flow target but maintained earnings guidance for 2024, which disappointed investors and dragged the stock lower by 11% in pre-market.

The company also forecasts an EBIT (earnings before interest and tax) of between $10 billion and $12 billion in 2024.

Ford explained that increases in warranty reserves, which pay for vehicle-related issues, impacted its profitability. It also claimed that quality improvements should help bring down future warranty costs.

Ford’s overall sales in Q2, which includes its finance business, increased by 6% year over year to $47.81 billion, while warranty costs spiked $800 million on a sequential basis.

Chipotle Beats Estimates in Q2

Chipotle Mexican Grill reported Q2 earnings and revenue estimates as it saw higher traffic at its restaurants, bucking an industry slowdown.

The stock is up 4.4% in pre-market after falling 17% this month as investors are concerned about the health of the restaurant industry.

In Q2, Chipotle Mexican Grill reported:

👉 Revenue of $2.97 billion vs. estimates of $2.94 billion

👉 Earnings per share of $0.34 vs. estimates of $0.32

The burrito chain's net income increased to $455.7 million from $342 million in the last 12 months, helped by price hikes that offset rising avocado prices. Its same-store sales rose 11.1%, higher than estimates of 9.2%.

Chipotle’s restaurant traffic increased 8.7% despite social media backlash, where customers complained that their burrito bowls were smaller. It continues to gain market share as restaurant transactions have grown across income levels.

Chipotle opened 52 new company-owned locations and one new internationally licensed restaurant in Q2. It expects to open between 285 and 315 restaurants this year.

The fast-food giant reiterated its full-year outlook for 2024 and expects same-store sales to grow by mid-to-single-digit percentages.

New Home Sales and Manufacturing Data

New home sales for June came in lighter than expected, continuing a trend of declines for the housing market. Sales of new single-family homes totaled 617,000, below estimates of 640,000.

Despite the drop in sales, median home prices rose to $417,300, the highest since March, while average prices declined to $487,200, the lowest since early 2023.

Another macro indicator is the manufacturing output index, which fell to 49.5 in July from 52.1 in June as new orders, production, and inventories declined. Economists expected the index to read 51.5%.

Comparatively, the services index remained robust at a 28-month high of 56, up from 55.3 in June and better than estimates of 55.

Headlines You Can't Miss!

Stellantis profits nosedive in 2024 

Chinese EV makers are spending more on research than Tesla

SK Hynix reports solid profits amid AI boom

Japan’s Nikkei falls 3% as Asia-Pacific indices slump

Spot Ethereum ETFs trading volumes surpass $950 million

Chart of The Day

Prior to this week’s sell-off, Tesla was the largest automobile company in the world by market cap, followed by Japan’s Toyota and China’s Byd.

Tesla is currently struggling with slowing sales, falling profit margins, and rising competition. A slew of China-based EV makers, including Byd and Nio, are fast gaining traction in the battery-powered vehicles segment.

Today, Tesla stock trades 47% below all-time highs.

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.