Weekly Financial Market Insights 📈
W1 - Major Layoffs Announced By Salesforce & Amazon, Bed Bath & Beyond Potentially Bankrupt, PMIs Showing Economic Contraction, U.S. Labor Market Remains Strong, and Constellation + Walgreens Earnings
Sunday Morning Markets ☕
Trading Week 1, covering Monday, Jan 2 through Friday, Jan 6. Your weekly financial markets update, in less than 5 minutes.
The Week In Review ⏪
Significant layoffs announced this week by Amazon, Salesforce, and Huobi.
ISM Manufacturing PMI in contractionary territory for second straight month.
Bed, Bath & Beyond warns of potential bankruptcy.
Tesla misses Q4 delivery estimates. Shares fell another 7% this week.
Labor market data remains strong. Job openings outnumber available workers 1.7 to 1. Nonfarm payrolls grew by 223K, more than expected.
Eurozone inflation comes in below expectations, but core inflation hits new high.
Gemini’s Winklevoss writes a confrontational open letter to DCG’s Barry Silbert.
US Markets 🇺🇸
Salesforce to cut its workforce by 10% and close some offices. The restructuring is expected to cost the company $1.4B to $2.1B. “The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions”.
Amazon increases its total layoff count to 18K, nearly double what it originally announced back in Nov’22. “Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so,” Jassy wrote in a memo.
ISM Manufacturing PMI comes in at 48.4% for December, in-line with estimates but still in contractionary territory for second consecutive month. Notably, the ‘prices paid’ segment of the PMI declined to 39.4, down from 43.0 last month, and signaling businesses are expecting lower prices ahead.
JOLTS job openings show 10.46m available positions, well above estimates and an indication that demand for workers is still high despite the Fed’s efforts to cool the economy and bring down inflation. Open positions outnumbered available workers by about 1.7 to 1.
Nonfarm payrolls jumped 223,000 in December as the labor market continues to show resilience. Wage growth came in below expectations, with average hourly earnings up 4.6% from a year ago, below the 5% estimate.
Tesla misses production & delivery estimates after reporting just 405k deliveries in Q4 and 1.31m deliveries in 2022, up 40% from the year prior. Wall Street was expecting 409k - 433k deliveries. Shares sank 12% following the report.
SpaceX raising $750m at $137B valuation in a new round of funding led by a16z. The company’s satellite internet service, Starlink, exceeded 1m subscribers and had 60 reusable rocket launches in a single year via its Falcon program.
Bed, Bath & Beyond warns of potential bankruptcy as the retailer is struggling to get merchandise to fill its shelves and is drawing fewer customers to its stores and website. BBBY shares fell nearly 50% this week.
Rest of World 🌏
Japan to pay families to move out of Tokyo in an effort to improve declining birth rates and diversify aging populations in more rural areas. Families will reportedly be paid up to 1m yen (~$7.7K) per child for making the move.
Eurozone inflation slides to 9.2% in December, below expectations of 9.7% and down from 10.1% last month. The decline was mostly led by a drop in energy prices. Core inflation came in at 5.2%, above expectations, and at a record high.
Canada’s Ivey PMI fell significantly to 33.4 from November’s 51.4 reading, showing economic activity is slowing markedly. The Ivey PMI measures the monthly variation in economic activity as indicated by a panel of purchasing managers from across Canada.
Crypto ⚡
Gemini’s Cameron Winklevoss writes an open letter to DCG’s CEO, Barry Silbert, accusing him of engaging in “bad faith” tactics. Gemini is attempting to recoup $900m of client funds which it lent to DCG’s subsidiary Genesis.
Crypto exchange Huobi to lay off 20% of its staff as the company deals with the aftermath of the FTX collapse. “With the current state of the bear market, a very lean team will be maintained going forward”.
Sam Bankman-Fried pleads not guilty to federal charges of money laundering, conspiracy to commit wire fraud, and securities fraud. It has now been about two months since the FTX empire collapsed. The trial will begin on October 2nd.
Coinbase to pay $100m settlement to NY regulator for violations of background check and KYC rules. The settlement includes a $50m fine, plus requires Coinbase to invest $50m to bolster its compliance program.
SMM is powered by
🧑💻 Alpha Vantage provides enterprise-grade financial market data through a set of powerful and developer-friendly APIs. From traditional asset classes (e.g., stocks and ETFs) to economic metrics, from foreign exchange rates to cryptocurrencies, from fundamental data to technical indicators, Alpha Vantage is your one-stop shop for real-time and historical global market data delivered through RESTful stock APIs, Excel, and Google Sheets. 👇
Earnings Reports 💰
Constellation Brands ($STZ) — View report
Revenue: $2.44B vs $2.38B expected and $2.37B year ago (+3% YoY)
Adjusted EPS: $2.83 vs $2.90 expected and $3.12 year ago (-9% YoY)
Metrics:
Beer: $1,892m, up 2% YoY
Wine: $471m, up 5% YoY
Spirits: $74m, up 18% YoY
FY23 Guidance: Comparable EPS of $11-$11.20. OCF of $2.6B-$2.8B. FCF $1.5B-$1.6B.
Market Reaction: -9.7%
—
Walgreens ($WBA) — View report
Revenue: $33.4B vs $33.0B expected and $33.9B year ago (-2% YoY)
EPS: $1.16 vs $1.14 expected and $1.68 year ago (-31% YoY)
Metrics:
US: $27.2B, down 3% YoY
International: $5.2B, down 11% YoY
Health: $1.0B, up 1839% YoY
FY23 Guidance: EPS of $4.45 - $4.65 on sales of $133.5B - $137.5B (revised up)
Market Reaction: -6.1%
—
ConAgra Brands ($CAG) — View report
Revenue: $3.3B vs $3.3B expected and $3.1B year ago (+8% YoY)
EPS: $0.79 vs $0.66 expected and $0.57 year ago (+39% YoY)
Metrics:
Grocery & Snacks: $1.35B, up 7% YoY
Refrid & Frozen: $1.42B, up 11% YoY
International: $0.26B, down 1% YoY
Food Service: $0.28B, up 15% YoY
FY23 Guidance: Adjusted EPS of $2.60 - $2.70 on sales growth of 7% - 8%
Market Reaction: +3.4%
Week Ahead 📅
Monday
Canada - Ivey PMI (DEC) 🇨🇦
Eurozone - Unemployment Rate (NOV) 🇪🇺
Germany- Industrial Production (NOV) 🇩🇪
Tuesday
Australia - Retail Sales (NOV) 🇦🇺
Earnings Reports: Albertsons 💰
Wednesday
China - Inflation Rate (DEC) 🇨🇳
Thursday
US - CPI Inflation (DEC) 🇺🇸
US - Jobless Claims (DEC) 🇺🇸
India - Industrial Production (NOV) 🇮🇳
Earnings Reports: Taiwan Semiconductor, Infosys, Delta Air Lines💰
Friday
US - UMich Consumer Sentiment (JAN) 🇺🇸
Eurozone - Industrial Production (NOV) 🇪🇺
UK - GDP (NOV) 🇬🇧
Germany - GDP (FY22) 🇩🇪
Earnings Reports: UnitedHealth, JPMorgan, Bank of America, Wells Fargo, Blackrock, Citigroup💰
Did you like this Sunday Market Newsletter? Consider sharing it!
We’d love to hear your thoughts about SMM. Click here to give feedback.
Want to partner with Sunday Morning Markets? Click here to inquire.