Weekly Financial Market Insights 📈
W3 - Google & Microsoft Announce Layoffs, Home Sales Fall For 11th Consecutive Month, Wholesale Prices Plunge, Genesis Files For Bankruptcy, and Netflix + Goldman Sachs + United Airlines Earnings
Sunday Morning Markets ☕
Trading Week 3, covering Monday, Jan 16 through Friday, Jan 20. Your weekly financial markets update, in less than 5 minutes.
The Week In Review ⏪
Layoffs in tech continue. Alphabet, Microsoft, and Wayfair announce new cuts.
Wholesale inflation slips 0.5% in December, led lower by energy prices.
US labor market remains strong. Jobless claims unexpectedly fall.
Real estate sales volume plunged 34% versus the year prior.
Tesla’s sales surged in China following the large price cuts.
Crypto-lender Genesis files for bankruptcy.
US Markets 🇺🇸
Microsoft is laying off 10,000 employees as the software maker braces for slower revenue growth. The company is also taking a $1.2B lease-related charge in Q2, resulting in a negative impact of 12 cents to adjusted earnings per share.
Google to reduce headcount by 12,000 employees, adding to the slew of major job cuts from the tech mega-caps. Alphabet, Amazon, Microsoft, and Meta have reduced their headcounts by over 50,000 in the last six months alone.
Home sales plunge to the lowest level since 2010, marking the 11th consecutive monthly decline. Sales volume fell to an annualized pace of 4.02m units, representing a 34% decline versus the year prior.
Wholesale prices dropped 0.5% in December, much more than the 0.1% decline expected. The dramatic drop in the PPI was led by energy prices plunging 7.9% during the month. Core-PPI rose 0.1%, in line with expectations.
US retail sales sank 1.1% during the month as households were penny-pinching over the holiday season due to financial pressures from surging inflation and increased borrowing costs. Analysts were expecting a 0.8% decline.
Jobless claims unexpectedly fall to 190K as the labor market continues to show strength even as layoffs have accelerated in tech, finance, and real estate. Economists had forecast 214K claims for the latest week.
Rest of World 🌏
Tesla’s sales in China surged after price cuts were made earlier this month on its most popular models. Between Jan. 9 - Jan. 15, Tesla’s sales jumped 76% versus the year prior, while the overall auto market saw a 14.5% decline.
Japan's inflation reaches highest level since 1981 as the nationwide core consumer price index rose 4% on an annualized basis. The yield on the Japanese 10Y fell to 0.39% following the report, well below the BoJ’s upper ceiling.
UK retail sales volume fell 1% in December after dropping 0.5% last month. Consumers seem to be cutting back spending more than expected as economists were expecting sales to increase by 0.3%.
Crypto ⚡
Crypto-lender Genesis files for bankruptcy as the crypto contagion continues to spread. The company had exposure to FTX, as well as Three Arrows Capital, and listed over 100K creditors with liabilities ranging from $1.2B to $11B.
US charges the Bitzlato with money laundering to the tune of $700m and arrested its founder in Miami. The Hong Kong-based exchange has been effectively shut down after having apparent ties to Russia.
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Earnings Reports 💰
Goldman Sachs ($GS) - Report
Revenue: $10.6B vs $10.9B expected and $12.0B year ago (-12% YoY)
EPS: $3.32 vs $5.77 expected and $10.81 year ago (-69% YoY)
Segment Breakdown:
Global Banking: $6.5B, down 14% YoY
Asset Management: $3.6B, down 12% YoY
Platform Solutions: $0.5B, up 36% YoY
Market Reaction: -6.4%
—
United Airlines ($UAL) - Report
Revenue: $12.4B vs $12.2B expected and $8.2B year ago (+51% YoY)
EPS: $2.46 vs 2.13 expected and -$1.60 year ago (+254% YoY)
Segment Breakdown:
Passenger: $11.2B, up 63% YoY
Cargo: $0.5B, down 35% YoY
Other: $0.7B, up 24% YoY
Guidance for Q1: EPS of $0.50 - $1.00 on revenue growth of +50% YoY
Market Reaction: -4.6%
—
Netflix ($NFLX) - Report
Revenue: $7.85B vs $7.84B expected and $7.71B year ago (+2% YoY)
EPS: $0.21 vs $0.59 expected and $1.33 year ago (-84% YoY)
Segment Breakdown:
UCAN: $3.6B, up 9% YoY
EMEA: $2.4B, down 7% YoY
LATAM: $1.0B, up 5% YoY
APAC: $0.9B, down 2% YoY
Guidance for Q1: EPS of $2.82 & revenue of $8.17B
Important Notes: CEO Reed Hastings to step down from his role. Global paid subs of 231m, up 4% YoY.
Market Reaction: +8.5%
—
Other Reports
Week Ahead 📅
Monday
Canada - New Housing Price Index (DEC) 🇨🇦
Eurozone - Consumer Confidence (JAN) 🇪🇺
Australia - NAB Business Confidence (DEC) 🇦🇺
Japan - Jibun Manufacturing PMI (JAN) 🇯🇵
Tuesday
US - S&P Composite PMI (JAN) 🇺🇸
UK - S&P Manufacturing PMI (JAN) 🇬🇧
Eurozone - S&P Manufacturing PMI (JAN) 🇪🇺
Germany - GfK Consumer Confidence (JAN) 🇩🇪
Australia - Inflation Rate (DEC) 🇦🇺
Earnings Reports: Microsoft, Johnson&Johnson, Verizon, Danaher, Raytheon, Lockheed Martin, General Electric, Capital One💰
Wednesday
Canada - BoC Monetary Policy Report 🇨🇦
Germany - Ifo Business Climate (JAN) 🇩🇪
Earnings Reports: Tesla, ASML, Abbott, AT&T, IBM, Boeing💰
Thursday
US - Durable Good Orders (DEC) 🇺🇸
US - GDP Prelim (Q4) 🇺🇸
US - New Home Sales (DEC) 🇺🇸
Earnings Reports: Visa, Mastercard, Comcast, Intel, Blackstone💰
Friday
US - PCE Inflation (DEC) 🇺🇸
US - Personal Income & Spending (DEC) 🇺🇸
US - Pending Home Sales (DEC) 🇺🇸
Earnings Reports: Chevron, American Express💰
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