Weekly Financial Market Insights 📈
W4 - US GDP Stronger Than Expected, DoJ Files Antitrust Suit Against Google, New Layoffs From Multiple Corporations, Adani Group Accused Of Fraud, and Microsoft + Tesla + Visa Earnings
Sunday Morning Markets ☕
Trading Week 4, covering Monday, Jan 23 through Friday, Jan 27. Your weekly financial markets update, in less than 5 minutes.
The Week In Review ⏪
A few economic reports this week showed a potential path to a “soft” landing; higher-than-expected GDP, healthy durable goods demand, easing Core PCE inflation, and few jobless claims.
RIFs announced by Spotify, Gemini, 3M, Ford, Hasbro, and IBM, as layoffs begin to trickle into other industries beyond tech.
Microsoft officially announces major investment into OpenAI.
DoJ targets Google in their latest antitrust suit.
Hindenburg Research calls Adani Group the “largest corporate fraud in history”.
Bank of Canada hikes rates 25bps but signals a pause for future.
Binance caught mixing company’s collateralized assets with customer funds.
US Markets 🇺🇸
Fed’s preferred inflation measure eased last month as the Core PCE Index rose 4.4% for the year, in line with expectations but down from 4.7% in November. Spending declined 0.2% during the month despite personal incomes up 0.2%.
U.S. GDP rose 2.9% in the fourth quarter, ahead of what economists were expecting at 2.8%, but below the third quarter’s reading of 3.2%. Consumer spending increased 2.1% as government spending jumped 6.2%.
U.S. durable goods orders jumped 5.6% in December led by a flush of new contracts for Boeing passenger planes. However, excluding transportation, new orders fell 0.1% during the month, in line with expectations.
Microsoft formally announces investment into OpenAI with a new multiyear, multibillion-dollar investment, after already investing in 2019 and 2021. OpenAI’s product ChatGPT is one of the fastest products to grow to 1m users.
DOJ files second antitrust suit against Google in just over two years, this time targeting its advertising business. The suit aims to make Google divest parts of the business. Shares of Alphabet fell over 3% following the news.
Spotify to cut 6% of its workforce or about 600 employees as the music streaming company contends with a gloomy economic environment that has seen consumers and advertisers alike limit their spending.
Bed Bath and Beyond defaults on a credit line with JPMorgan, warning once again of potential bankruptcy. Shares of BBBY 0.00%↑ were down over 15% this week as the company trades for ~$300m valuation.
Rest of World 🌏
Hindenburg releases a report on the Adani Group in which they call the Indian conglomerate “the largest corporate fraud in history. Read the full research report on how the third wealthiest man in the world may have defrauded investors.
Brazil and Argentina discuss a common currency as the two major LATAM countries aim for greater economic integration. "We intend to overcome the barriers to our exchanges, simplify and modernize the rules"
The Bank of Canada raised its overnight lending rate by 25 basis points to 4.5% as expected but signaled a pause in its hiking cycle. They added economic growth would stall through the middle of the year.
Eurozone PMI data shows a return to growth as the S&P composite PMI, which encompasses both manufacturing and services activity, came in at 50.2 in January, up from 49.3 in December and ahead of a consensus forecast of 49.8.
Crypto ⚡
Binance mistakenly mixed collateral with customer funds and is now taking steps to reverse course. “This could lead to the owners not being able to withdraw due to lack of funds or liquidity by the exchange,” said Laurent Kssis, trading adviser at CEC Capital.
A bill to make Bitcoin legal tender in Arizona was introduced by a state senator on Wednesday. However, the bill is unlikely to pass since the U.S. Constitution disallows individual states from creating their own legal tender.
Gemini cuts another 10% of its staff after being wrapped up in financial issues sparked by the recently bankrupt crypto-lender, Genesis Global. This marks the third layoff made by the crypto exchange since June of 2022.
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Earnings Reports 💰
Follow our Twitter account for real-time breakdowns of earnings reports.
Microsoft ($MSFT)- Report
Revenue: $52.7B vs $53.2B expected and $51.7B year ago (+2% YoY)
EPS: $2.32 vs $2.31 expected and $2.48 year ago (-6% YoY)
Segment Breakdown:
Productivity & Business Proc: $17.0B, up 7% YoY
Intelligent Cloud: $21.5B, up 17% YoY
Personal Computing: $14.2B, down 18% YoY
Guidance for Q1: $50.5B to $51.5B in revenue vs $52B expected.
Market Reaction: -0.6%
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Tesla ($TSLA)- Report
Revenue: $24.3B vs $24.3B expected and $17.7B year ago (+37% YoY)
EPS: $1.19 vs $1.13 expected and $0.85 year ago (+40% YoY)
Delivery Breakdown:
Model S/X: 17,147 vehicles, up 46% YoY
Model 3/Y: 388,131 vehicles, up 31% YoY
Guidance: “We are planning to grow production as quickly as possible in alignment with the 50% compound annual growth rate target we began guiding to in early 2021.”
Market Reaction: +11.0%
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Visa ($V) - Report
Revenue: $7.94B vs $7.7B expected and $7.06B year ago (+12% YoY)
EPS: $2.18 vs $2.01 expected and $1.81 year ago (+20% YoY)
Payment Volume By Geography:
United States: $1.523T, up 3% YoY
International: $1.491T, up 3% YoY
Market Reaction: +3.0%
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Other Reports
Week Ahead 📅
Monday
Germany - GDP (Q4) 🇩🇪
China - Manufacturing PMI (JAN) 🇨🇳
Australia - Retail Sales (DEC) 🇦🇺
Tuesday
US - CB Consumer Confidence (JAN) 🇺🇸
Germany - CPI Inflation (JAN) 🇩🇪
China - Caixin Manufacturing PMI (JAN) 🇨🇳
Earnings Reports: Pfizer, McDonald’s, United Postal Service, Caterpillar, AMD, General Motors, Spotify, Snapchat 💰
Wednesday
US - Fed Interest Rate Decision 🇺🇸
US - ISM Manufacturing PMI (JAN) 🇺🇸
US - JOLTS Job Openings (DEC) 🇺🇸
UK - Manufacturing PMI (JAN) 🇬🇧
Germany - Manufacturing PMI (JAN) 🇩🇪
Eurozone - CPI Inflation (JAN) 🇪🇺
Earnings Reports: Meta, Thermo Fisher, T-Mobile, Peloton 💰
Thursday
UK - BoE Interest Rate Decision 🇬🇧
Eurozone - ECB Interest Rate Decision 🇪🇺
Earnings Reports: Apple, Alphabet, Amazon, Eli Lilly, Merck, Starbucks, Ford 💰
Friday
US - Nonfarm Payrolls (JAN) 🇺🇸
UK - Composite PMI (JAN) 🇬🇧
Earnings Reports: Sanofi, Cigna Health 💰
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