Bulls, Bitcoin, & Beyond

Market Moves Yesterday

S&P 500 @ 4,688.68 ( ⬇️ 0.34%)

Nasdaq Composite @ 14,510.30 ( ⬇️ 0.56%)

Bitcoin @ $43,836.30 ( ⬇️ 0.90%)

Hey Scoopers,

Happy Friday! Here’s what making waves in the market today 👇

👉 Walgreens plunges over 5%

👉 Piper Sandler downgrades Apple

👉 A Bitcoin ETF might launch next week

So, let’s go 🚀

Walgreens Beats Estimates, Cuts Dividend

Shares of healthcare giant Walgreens fell over 5% yesterday after the company reported fiscal Q1 of 2024 results (ended in November) and announced a dividend cut, spooking investors.

The retail pharmacy heavyweight slashed quarterly dividends to $0.25 per share from $0.48 per share, to strengthen the balance sheet and boost its liquidity position.

Walgreens ended fiscal 2023 with $739 million in cash and $34.5 billion in total debt. Its free cash flow fell to just $665 million in fiscal 2023, down from $4.17 billion in 2021.

Given its annual dividend of $1.92 per share in fiscal 2023, the company paid over $1.65 billion in dividends, making its dividend payout unsustainable.

Walgreens now offers a dividend yield of 3.9%, below its prior dividend of over 7%, when it was the highest-paying dividend stock on the Dow Jones Industrial Average index.

It is also the first time the company cut its dividend in almost 50 years, which means Walgreens has now lost the status of a Dividend Aristocrat.

Walgreens stock fell 30% in 2023, trailing the broader indices by a wide margin as it wrestled with lower demand for COVID-19 products, rising competition from online retailers, labor unrest, low pharmacy reimbursement rates, and an uncertain macro environment.

In fiscal Q1, Walgreens reported earnings of $0.66 per share vs. estimates of $0.61 per share. Its revenue stood at $36.7 billion, higher than estimates of $34.86 billion.

In fiscal 2024, Walgreens forecasts:

👉 Earnings between $3.20 and $3.30 per share

👉 Revenue between $141 billion and $145 billion

👉 Cost savings of $1 billion

Apple Down 8% From All-Time Highs

Due to a challenging macro environment, Piper Sandler analyst Harsh Kumar downgraded Apple stock. According to Kumar, Apple may suffer from soft smartphone sales and lower consumer spending in the first half of 2024.

The analyst lowered the price target on Apple stock from $220 to $205. Currently, shares of the tech giant trade at $181.

Apple’s iPhone Sales (In Millions of Dollars)

It was the second downgrade for Apple stock in the new year, and the tech behemoth currently trades 8% below all-time highs.

After a resounding rally in 2023, tech stocks, including Apple, have cooled off in recent trading sessions as Wall Street remains wary of steep valuations against the current economic backdrop.

The tech-heavy Nasdaq Composite index is down almost 4% this week after rising roughly 45% last year.

A Bitcoin ETF Approval On the Cards

Bitcoin gained pace on Thursday, recovering some of the losses from the previous day, and is up 3.15% in 2024.

The world’s largest cryptocurrency is now valued at $861 billion as it bounced back from the wipeout surrounding leveraged positions.

Investors are now positioning themselves for the imminent approval of multiple spot Bitcoin ETFs, which could be a massive catalyst for BTC’s price in 2024.

The SEC is widely expected to make a decision for spot Bitcoin ETFs as soon as next week, given the agency’s first deadline to approve or reject an application is January 10th.

The ETF hype has been a significant driver for Bitcoin prices in the past six months, propelling prices by 157% in 2023.

Investors expect bitcoin ETFs to usher in a new wave of new investors into the crypto market, attracting billions of dollars toward the asset class.

Headlines You Can’t Miss!

Jobs report expected to drive markets today

The Nasdaq index closes lower for the fifth consecutive day

Peloton shares gain as it partners with TikTok

China’s property inventory overhang might take a decade to correct

Valkyrie joins the Bitcoin ETF bandwagon

Chart of the Day

It’s always tempting to try to time the market – selling your stocks just before they fall and buying back in just before they rise. Everyone wants above-average returns, after all. The problem is, it almost never works out. For the vast majority of us, trying to time the market is a recipe for losses.

Here’s what the researchers found: 690 of the strategies (or 96%) didn’t work – meaning they failed to beat a simple buy-and-hold strategy. And that’s before factoring in any trading or tax costs.

As for those 30 strategies that did work, it turns out that was down to pure luck, as the researchers readily acknowledged. See, if you ask enough people to flip a coin repeatedly, someone will flip ten heads in a row.

And by the same law of numbers, you can expect some timing strategies to generate positive results just by chance if you try enough parameter combinations – shaking up things like rebalancing frequency, time frames used to calculate historical averages, percentiles (relative to historical averages) at which the strategy buys and exits stocks, and so on.

An old adage in the investing world says success isn’t about timing the market but time in the market.

In other words, you’re much better off staying invested over the long run with a well-diversified portfolio that’ll reap the benefits of compound interest (which Albert Einstein famously called the “eighth wonder of the world”).

And that means accepting the reality that the stock market moves down as well as up and that you can rarely time its movements.

Don’t follow us on social yet? Follow us on Twitter and LinkedIn now.

DISCLAIMER: None of this is financial advice. This 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.