Weekly Financial Market Insights 📈
Hot PPI Inflation Data, FTC Blocks Microsoft Acquisition of Activision, OPEC+ Agrees to Cut Oil Output, Binance Audit Shows Firm Is "Over-Collateralized", and Costco + Lululemon + MongoDB Earnings
Sunday Morning Markets ☕
Trading Week 49, covering Monday, Dec 5 through Friday, Dec 9. Your weekly financial markets update, in less than 5 minutes.
The Week In Review ⏪
Wholesale PPI inflation comes in hotter than expected at +0.3% MoM.
Amazon, Google, Microsoft, and Oracle earn $9B Pentagon cloud deal.
FTC sues to block Microsoft and Activision M&A deal for anti-trust.
TSMC to invest $40B in second semiconductor chip factory in Arizona.
OPEC+ agrees to cut oil production with pending Russian sanctions.
Freight costs have dropped as much as 90% from the peak.
Binance audit shows the firm is “over-collateralized”.
US Markets 🇺🇸
Wholesale prices rose faster than expected in November as food prices surged. The producer price index, a measure of what companies get for their products in the pipeline, increased 0.3% for the month and 7.4% from a year ago. Excluding food and energy, Core PPI was up 0.4% vs estimates of 0.2%.
Amazon, Google, Microsoft, Oracle awarded cloud deal from the Pentagon worth an estimated $9 billion through 2028. The Defense Department aims to rely on multiple providers of remotely operated infrastructure technology instead of on a single company — (AMZN 0.00%↑ , GOOG 0.00%↑, MSFT 0.00%↑, ORCL 0.00%↑)
FTC sues to block Microsoft’s acquisition of Activision after the commissioners voted 3-1 in opposition to the $68.7B deal. “Microsoft has already shown that it can and will withhold content from its gaming rivals” — (MSFT 0.00%↑ , ATVI 0.00%↑)
TSMC to up Arizona investment to $40 billion with second semiconductor chip plant. The company announced it is raising its investment from $12 billion to $40 billion, marking one of the largest foreign investments in U.S. history. Apple will also use these factories to manufacture its own chips — (TSM 0.00%↑ , AAPL 0.00%↑)
Uber launching self-driving cars in Las Vegas and has plans to expand to Los Angeles “at a later date”. The vehicles are made by the company Motional and will have two “operators” behind the wheel to monitor the technology. Uber said it plans on launching a fully driverless service in 2023 — (UBER 0.00%↑)
National security concerns delay TikTok deal due to the app’s ownership by the Chinese company ByteDance. Analysts predict that Meta, Google, and Snap stand to gain from a TikTok ban in the U.S. but noted that a ban is not the most likely scenario — (META 0.00%↑ , GOOG 0.00%↑, SNAP 0.00%↑)
Rest of World 🌏
OPEC+ agrees to reduce oil production ahead of the planned Russia sanctions. Oil prices have fallen significantly since June to below $90 a barrel. Now, the European Union is set to ban all imports of Russian seaborne crude.
Freight costs have dropped more than 90% from China to the West Coast as global trade plunges. Firms are warning that there are too many ocean vessels and container capacity, as data indicates that 85% of customers plan to decrease ocean freight spending next year.
USA agrees to swap Russian arms dealer for Brittney Griner according to a senior administration official. The swap marks a prominent diplomatic engagement between the two nations with many ongoing geopolitical conflicts.
Crypto ⚡
Binance's Bitcoin reserves are overcollateralized, a new audit shows. Mazars performed a proof-of-reserves and proof-of-liabilities assessment on the exchange and found that its controlled in-scope assets were equal to 101% of its total platform liabilities.
Coinbase expects a 50% decline in revenue in 2022, says CEO Brian Armstrong. Coinbase’s stock is down more than 83% this year and is one of the worst-performing stocks on the Nasdaq as a growing number of investors are stepping away from crypto-related companies — (COIN 0.00%↑)
Goldman looking to buy crypto firms whose valuations have been hit after the implosion of the crypto exchange FTX. "We do see some really interesting opportunities, priced much more sensibly" — (GS 0.00%↑)
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Earnings Reports 💰
MongoDB ($MDB) — View report
Revenue: $334m vs $305m expected and $227m year ago (+47% YoY)
Adjusted EPS: $0.23 vs ($0.17) expected and $0.03 year ago (+667% YoY)
Important Notes: Total customer count grew 26% YoY to 39,100. Customers providing more than $100K over the last twelve months grew 29% YoY to 1,545. Revenue growth of 47% YoY vs OPEX growth of 37%.
Guidance: Q4 non-GAAP EPS of $0.06 to $0.08 on sale of $334m to $337m.
Market Reaction (24hrs after report): +23.2%
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Costco ($COST) — View report
Revenue: $53.4B vs $54.7B expected and $49.4B year ago (+8% YoY)
Adjusted EPS: $3.07 vs $3.16 expected and $2.98 year ago (+3% YoY)
Segment Breakdown:
United States: $39.7B, up 9% YoY
Canada: $7.3B, up 2% YoY
Rest of World: $6.7B, down 3% YoY
Guidance: No guidance given.
Market Reaction (24hrs after report): +0.3%
—
Lululemon ($LULU) — View report
Revenue: $1.86B vs $1.81B expected and $1.45B year ago (+28% YoY)
Adjusted EPS: $2.31 vs $1.96 expected and $1.62 year ago (+43% YoY)
Important Notes: Number of stores up 13% year-over-year to 623 stores. Direct to consumer sales up 30% year-over-year to $761m.
Guidance: Q4 EPS of $4.20 -$4.30 on sales of $2.605B - $2.655B
Market Reaction (24hrs after report): -12.9%
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Chewy ($CHWY) — View report
Revenue: $2.53B vs $2.46B expected and $2.21 year ago (+14% YoY)
Adjusted EPS: $0.11 vs (0.06) expected and (0.03) year ago (+467% YoY)
Adjusted EBITDA: $70m vs $6m year ago (+1073% YoY)
Important Notes: Number of active customers up 0% year-over-year to 20.5m. Net sales per active customer up 14% year-over-year to $477m.
Guidance: Q4 sales of $2.63B - $2.65B
Market Reaction (24hrs after report): +4.0%
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Other Reports:
Week Ahead 📅
Monday
UK - Manufacturing Production (Oct) 🇬🇧
Earnings Reports: Coupa Software💰
Tuesday
US - CPI Inflation (Nov) 🇺🇸
Germany - CPI Inflation (Nov) 🇩🇪
Germany - ZEW Economic Sentiment (Dec) 🇩🇪
UK - Average Earnings Index (Oct) 🇬🇧
Japan - Tankan Manufacturing Index (Q4) 🇯🇵
Earnings Reports: Core & Main, Braze 💰
Wednesday
US - FOMC Meeting 🇺🇸
US - Fed Interest Rate Decision 🇺🇸
UK - CPI Inflation (Nov) 🇬🇧
China - Industrial Production (Nov) 🇨🇳
Earnings Reports: Lennar Corp, Trip.com 💰
Thursday
US - Retail Sales (Nov) 🇺🇸
US - Phili Fed Manufacturing Index (Dec) 🇺🇸
UK - BoE Interest Rate Decision 🇬🇧
Eurozone - ECB Interest Rate Decision 🇪🇺
Earnings Reports: Adobe 💰
Friday
UK - Retail Sales (Nov) 🇬🇧
Germany - Manufacturing PMI (Dec) 🇩🇪
Eurozone - CPI Inflation (Nov) 🇪🇺
Earnings Reports: Accenture 💰
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