Stock markets rallied this week after a weaker-than-expected jobs report on Friday supported a relatively dovish view of the Federal Reserve and Fed Chairman Jerome Powell on Wednesday. The S&P 500 and Nasdaq tested key levels. apple (AAPL) soared on record share buybacks and better-than-expected earnings. AMD (AMD) and super microcomputer (SMCI) plunged on the gains, initially hurting AI stocks. Carvana (CVNA), Qualcomm (QCOM) and Sprouts Farmers Market (SFM) earned revenue. tesla (TSLA) rose sharply in response to the progress of China’s FSD, but the rate of increase was reduced as large-scale layoffs cast doubt on the EV major’s plans. Chinese EV stocks soared.
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Stock prices rise
All major indexes rose this week, with Treasury yields falling on the Fed’s somewhat dovish stance and a weaker-than-expected jobs report. The Nasdaq regained its 50-day line on Friday, looking to confirm the market’s attempt to move higher. However, other major indexes hit resistance there. Earnings season was still tough with many winners and losers.
slowing economic growth
Employment statistics for April were weak overall. Overall employment fell to 175,000, compared to the expected 243,000. Average hourly wages rose only 0.2%, and the 12-month rate of increase fell to 3.9%, the slowest pace in about three years. The unemployment rate rose to 3.9%, while the number of people working part-time due to lack of full-time work or the economic downturn increased by 161,000 to 4.469 million, 34. It was the highest level in months. Meanwhile, the ISM Services Index fell two points to 49.4, falling below the neutral 50 level for the first time since December 2022. Meanwhile, the ISM Manufacturing Activity Index decreased by 1.1 points to 49.2. However, both of his ISM measurements showed price pressures accelerating.
The Fed has taken a relatively dovish stance.
The Federal Reserve (Fed. The possibility of rate cuts by the second half of this year has been ruled out. But policymakers gave the green light for the Fed to cut the pace of shrinking its balance sheet by about half, to $40 billion a month. The Fed releases $60 billion of U.S. debt toward maturity each month, but that will be reduced to $25 billion starting June 1. This suggests that policymakers may not be as nervous about inflation as feared. Mr. Powell also largely allayed Wall Street’s concerns about the possibility of another rate hike.
Apple defies previous views and sets huge stock buyback
The consumer electronics giant narrowly beat expectations for the fiscal second quarter. EPS rose a penny to $1.53. Sales decreased 4% to $90.8 billion, with hardware sales down 10% and services sales up 14%. apple (AAPL) expects sales to increase in the low single digits for the June quarter. Shares soared after the iPhone maker increased its dividend by 4% to 25 cents a share and announced a $110 billion stock buyback plan.
AMD, super micropost mixed results
chip manufacturer AMD (AMD) and Data Center Specialist super microcomputer (SMCI) reported strong demand for products for artificial intelligence in the March quarter. However, both sales fell short of forecasts. AMD’s profits were in line with our view, and Super Micro’s profits exceeded. For the current quarter, AMD offered a roughly flat revenue outlook, while Super Micro significantly exceeded expectations for the June quarter. Both stocks were sold.
Amazon’s revenue soars
First-quarter profits rose 216% and sales rose 13% to $143.3 billion, both outpacing them. Amazon Web Services’ cloud computing division grew 17% year-over-year to $25 billion, compared to expectations of about 15%. Amazon (AMZN) CEO Andy Jassy said generative AI is helping fuel new growth for AWS. Amazon’s retail division also continues to improve its profitability. North American retail operating income increased 450% to $5 billion. Meanwhile, the international retail business increased its operating profit to his $900 million, compared to a quarterly loss of $1.2 billion in the same period last year. Amazon stock rose slightly.
Qualcomm stands out in chip revenue
wireless chip reader Qualcomm (QCOM) beat expectations for the March quarter and beat expectations for the June quarter. Qualcomm stock soared. On the other hand, other companies in the same industry corbo (QRVO) and skyworks (SWKS) exceeded viewership in the first quarter, but fell well short of expectations in the second quarter amid weak smartphone sales. Corvo and Skyworks stock prices plummeted. Among other chip manufacturers, monolithic power (MPWR) has released a Beat and Raise report on the strength of its enterprise data storage business. NXP Semiconductors (NXPI) broke out following a strong first quarter report.
Robot surgeon will examine you now
Lily, Novo Nordisk
weight loss drug giant Eli Lilly (LLY) and novo nordisk (NVO) announced its first quarter earnings last week. Lilly’s profits jumped 59%, easily outpacing this. Sales were slightly flat, increasing 26% to $8.77 billion. However, sales for the weight loss drug Zepbound were $517.4 million, with forecasts sluggish. Lilly raised its full-year forecast. Novo outperformed views with his EPS up 28% and revenue up 22% to $9.46 billion. Sales of the obesity drug Wegoby nearly doubled to $1.34 billion, but it fell short. Sales of Ozempic, a diabetes shot, rose 33% to $3.85 billion, ranking first by a close margin. amgen (AMGN) completed a Phase 1 trial of its obesity drug and reported a 1% EPS decline, slightly revising its previous view. Amgen jumped on board. LLY stock rose after the results, but erased the week’s gains on news of Amgen’s obesity drug. NVO stock fell.
Restaurant stocks vary
A number of chains have brought results, but traffic may be starting to plateau. mcdonalds (MCD), shake shack (shaku) and Wendy’s (WEN) both reported same-store sales increases but missed crowd forecasts. restaurant brand (QSR) outperformed in revenue and revenue, but Burger King’s comparable sales growth slowed. wingstop (WING) beat expectations with a 66% profit increase, domestic same-store sales rose 21.6%, well ahead of FactSet’s view, and is trading near all-time highs. Starbucks (SBUX) fell to multi-year lows after reporting lower-than-expected earnings and revenue and a bigger-than-expected drop in traffic. texas roadhouse (TXRH)’s revenue grew 31% in the first quarter, and traffic grew 9.3% in the first five weeks of the second quarter. TXRH and Wingstop are in the buy zone, while Shake Shack is showing bullish activity.
Neurocrine Bio, Regeneron Rise On Results
neurosecretory biological science (NBIX) beat sales expectations, with movement disorder drug Ingreza bringing in $506 million. Adjusted earnings also exceeded expectations, reversing from a loss in the same period last year to $1.20 per share. Regeneron Pharmaceuticals (REGN) missed both metrics, with EPS down 5% and revenue down 1% to $3.15 billion. But the biotech giant rose on better-than-expected sales of its eye disease drug Eylea.
Tesla soars on China FSD news
tesla (TSLA) soared 15.3% on Monday, its biggest gain in more than three years, after the stock reportedly won preliminary approval to introduce fully self-driving cars in China. FSD will go up against many other levels of driver assistance systems. However, the stock’s weekly gains narrowed after reports surfaced that Mr. Musk had fired Tesla’s entire team involved in the development of superchargers and new cars. Musk wrote on his social site X that Tesla “still plans to expand its Supercharger network” but at a slow pace. The move comes after Musk cut more than 10% of Tesla’s global workforce in early April.
BYD’s revenue was lower, but profit margin was strong
Chinese EV and battery giant BYD reported an 11% increase in net profit and a 4% increase in sales in local currency terms, both of which were below expectations for the first quarter. However, the gross profit margin hit a record high of 21.88%. BYD’s April sales totaled 313,245 units, an increase of 3.6% from March’s 302,459 units and 49% increase from April 2023’s 210,295 units. Nioh (NIO) delivered 15,620 vehicles in April, an increase of 31.6% from March and 134.6% from a year ago. XPeng (XPEV) delivered 9,393 EVs in April, an increase of 4.1% compared to 9,026 in March, and a 23% increase year-over-year. lee auto (LI) delivered 25,787 vehicles in April, down 11% compared to March but up 0.4% year over year. BYD stock has broken out of its short base as its sluggish peers have soared.
Giants win with digital payments
paypal holdings (PYPL) reported adjusted EPS growth of 27% based on a new accounting methodology that includes stock-based compensation expense and related employer payroll taxes. Revenue rose 9% to $7.7 billion, and payments rose 14%, both outpacing them. The digital payments giant surged with revenue, but then wiped out profits.square parent block (SQ) reported an 85% increase in adjusted first-quarter EPS and a 19% increase in revenue to $5.96 billion, both outperformers. However, total payments from merchant customer transactions rose 9% to $50.5 billion, below expectations of $55.81 billion. After falling earlier in the week on reports that federal prosecutors were investigating Square’s financial dealings, the stock soared on the gains.
Security software coming in fall
cyber ark (CYBR) turned in a profit of 75 cents, and revenue rose 37% to $221.6 million, outperforming both. Annual subscription-based recurring revenue increased 54% to $621 million. However, second-quarter revenue guidance was slightly below consensus. Cyber ​​Ark sells his identity and access management tools. Stocks fell. cloudflare Net revenue doubled in the first quarter, with revenue increasing 30% to $378.6 million. Analysts expected adjusted earnings per share of 13 cents and revenue of $373.2 million. Web application acceleration and security company Cloudflare projects inline revenue in the second quarter. NET stock fell.
Put simply
pfizer (PFE) soared, outpacing views thanks to a one-time benefit from the coronavirus treatment paxlobid. Total revenue decreased 20% to $14.88 billion, and adjusted EPS decreased 33%. Sales of Paxlobid fell 50% to $2.04 billion, but expectations were undermined after the U.S. government returned 5.1 million courses of the drug. Pfizer raised its full-year sales.
Generac (GNRC) reported a 40% increase in EPS, beating views, but flat revenue of $889 million nearly matched. The generator manufacturer maintained its full-year target. The stock price fell below the buy point.
master Card (MA) saw EPS increase 18% and revenue increase 10% to $6.34 billion, both slightly higher. However, the payments giant led a lower rate for the full year. Stock prices fell steadily.
Carvana (CVNA) posted significant year-over-year gains after reporting first-quarter net income of $49 million and adjusted EBITDA of $235 million. Revenue rose 17% to $3.06 billion, easily exceeding that.
Sprouts Farmers Market (SFM) posted 14% EPS growth and 9% revenue growth to $1.88 billion, outpacing views. Natural food supermarket chains offered a positive outlook.
door dash (DASH) reported that revenue fell 6 cents, well above expectations, but revenue rose 23% to $2.51 billion, outpacing views. Gross order outlook for food delivery companies suggested slowing growth. Stock prices plummeted.
draft kings (DKNG) reported a lower-than-expected first-quarter loss, but sales rose 53% to $1.174 billion. Monthly unique players (MUPs) increased 23% to 3.4 million, and average revenue per MUP increased 25% to $114. The online sports betting giant raised its full-year revenue outlook. Stock prices fell due to volatile trading.
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