Weekly Financial Market Insights 📈
Trading Week 29 ... Ford Layoffs, US Housing Data, Tesla Sells Bitcoin, Manufacturing PMI, Tesla + Netflix + Twitter Earnings
Sunday Morning Markets ☕
Your weekly financial markets update, in less than 5 minutes. Market coverage for Monday, July 18 - Friday, July 22.
Last Week ⏪
A solid week for equities and crypto as markets begin to parse through some of the losses experienced this year. Recession fears worsened after a string of poor economic data was released this week. Yields continue to drop across the board as investors flee for safety. Housing demand has dried up rapidly with the combination of both higher home prices and rising mortgage rates. Keep an eye out for next week, as many FAANG names report Q2 earnings alongside the FOMC meeting & the first print for Q2 GDP.
US Markets 🇺🇸
Apple plans to slow hiring and cut expenses as they prep for a potential global slowdown - joining the likes of Meta and Tesla, who have also announced plans to slow headcount growth this year.
Twitter wins bid for an expedited trial as they announce the trial will begin in October. Elon was asking for a trial in February as he looks to compile evidence to prove Twitter misrepresented the number of fake accounts on the platform.
Ford plans to cut over 8,000 jobs in a bid to reduce costs as they shift more focus onto their electric vehicle production. Most of the cuts are expected from the 31,000 US salaried employees the company currently has.
Amazon acquires One Medical for $3.5B in an all-cash deal. This acquisition expands Amazon's reach in the healthcare space, as they add 182 medical offices in 25 markets with over 760K members.
The US housing market continues to face pressure in the wake of worsening affordability. Existing home sales in June fell 5.4% from May, and 14.2% from June 2021. However, with tight supply, median home prices still rose to another record of $416K, a 13.4% jump vs the year prior.
The S&P US PMI tumbles to 47.5 in its first reading for July, down significantly from its previous reading of 52.7 in June, worsening the fears of a US recession.
Rest of World 🌏
President Biden heads to Saudi Arabia to likely urge the Saudi government officials to increase their oil output in an effort to bring down surging inflation in the US before the midterm elections.
Italian PM Mario Draghi resigns from his seat after failing to unite his coalition. Elections will be held in late September as Italy scrambles to replace him.
ECB surprises market and raises rates by 50bps in its first hike in eleven years. The ECB had originally signaled for rate hikes in both July & September as they march their monetary policy back to “neutral”.
Crypto ⚡
Gamestop’s NFT marketplace tops Coinbase in volume after launching just eleven days ago. Gamestop has seen over 5,000 ETH (~$7.2M) in trading volume, more than double Coinbase’s total NFT volume since they launched on May 4th.
Ex-Coinbase manager arrested for insider trading as they allegedly shared information about 14 different token listings at Coinbase before it was public knowledge. They conspired with at least two others to purchase the tokens using anonymous wallet addresses and took home over $1M in profits.
Tesla sells 75% of its Bitcoin holdings, adding $936M in liquidity to its balance sheet. On their Q2 earnings call, Elon said the company needed to shore up its balance sheet with the uncertainty surrounding COVID lockdowns in China.
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Earnings Reports 💰
Tesla Motors ($TSLA)
Revenue: $17.1B vs $16.9B expected vs $13.2B year ago (43% YoY)
EPS: $2.31 vs $2.24 expected vs $1.91 year ago (35% YoY)
FCF: $621M vs $204M year ago (200% YoY)
Guidance: Reiterated their 50% average annual growth for vehicle deliveries.
Important Notes: Sold 75% of Bitcoin holdings. Supercharger network +34% YoY to 3,971 stations.
Netflix ($NFLX)
Revenue: $7.97B vs $8.04B expected vs $7.34B year ago (8.6% YoY)
EPS: $3.20 vs $2.94 expected vs $2.97 year ago (35% YoY)
Subs: 220.67M vs 209.18M year ago (5.5% YoY)
Guidance: Revenue growth of 12% constant currency. Operating margins of 16% below 20% prior guidance. +1m net new subscribers, lower than the +1.8m expected.
Important Notes: Plans to launch lower cost & ad-supported tier in early 2023. Net subscriber loss of 970K this quarter, below the 2M previously guided.
Twitter ($TWTR)
Revenue: $1.18B vs $1.32B expected vs $1.18B year ago (-1% YoY)
EPS: ($0.08) loss vs $0.14 expected vs $0.20 year ago
DAUs: 237.8M vs 238.1M expected vs 198.3 year ago (16.6% YoY)
Guidance: Given the pending acquisition from Elon Musk, Twitter did not offer guidance for Q3 or FY2022.
Important Notes: Blamed the poor quarter on weakening demand for ads, macroeconomic headwinds, as well as uncertainty surrounding the pending acquisition from Elon Musk.
Week Ahead 📅
Monday
Chicago Fed Activity Index (link)
Tuesday
Consumer Confidence Index (link)
Home Price Index (link)
Earnings Reports: Microsoft ($MSFT), Alphabet ($GOOG)
Wednesday
FOMC Meeting (Fed Funds Rate decision) (link)
Durable Goods Orders (link)
Earnings Reports: Meta ($META)
Thursday
Q2 Preliminary GDP estimate (link)
Jobless Claims (link)
Earnings Reports: Apple ($AAPL), Amazon ($AMZN)
Friday
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Until next Sunday…