What Moved The Markets This Week 📈
W9 - Mortgage Volume Hits 28-Year Low, OpenAI Launches New AI Models, Meta Cuts Prices For Quest, China's Factory Activity Surges, Silvergate Potential Insolvency, and Salesforce + Snowflake Earnings
Sunday Morning Markets
Trading Week 9, covering Monday, Feb 27 through Friday, Mar 3. Your weekly financial markets update, in less than 5 minutes.
The Week In Review ⏪
ISM Manufacturing PMI hits 47.7 in February, missing estimates
Mortgage demand plunges to 28-year low as rates continue to climb
Amazon pauses construction of second headquarters in Virginia
UK and EU agree to crucial Northern Ireland trade deal
China’s manufacturing PMI hits an 11-year high as the economy reopens
iPhone supplier, Foxconn to build major factory in India, plans to divest from China
Silvergate Bank shares crash 60%. Coinbase, Gemini,and others sever ties
Earnings from Zoom, Salesforce, Snowflake, and more — view breakdowns below
US Markets 🇺🇸
The U.S. manufacturing sector contracted again with the ISM Manf. PMI missing estimates at 47.7 in Feb, but up from 47.4 in Jan. The ‘prices paid’ series jumped a staggering 6.8% during the month as inflation pressures reignited.
Mortgage demand plummets to a 28-year low as interest rates start to rally again. The average 30yr fixed-rate mortgage jumped to 6.71% during the week, pushing mortgage volume down another 6%. Volumes are now down 44% YoY.
Durable goods orders sank 4.5% last month, worse than the 3.6% drop expected. However, the data is noticeably skewed by a pullback in passenger-plane purchases. Excluding transportation, new orders rose +0.7% last month.
Eli Lilly cuts insulin prices by 70% and caps costs at $35 per month for people with private insurance at participating retail pharmacies. The announcement comes amid growing federal pressure to lower insulin prices.
Tesla shares fall after Investor Day presentation despite positive analyst sentiment. The company reiterated a 2030 production target of 20 million vehicles annually, major cost reduction programs, and energy sustainability goals.
Amazon pauses construction of 2nd headquarters in Virginia. The first phase of the campus is expected to open on time this June and will be occupied by 8,000 employees. The second phase, “PenPlace”, will be pushed back.
Meta announces big price cuts for its VR headsets in a bid to boost sales. The price of the Quest 2 will drop from $499.99 to $429.99, while the price of the higher-end Quest Pro will be slashed to $999.99 from $1,499.99.
OpenAI has achieved a 90% cost reduction for ChatGPT through a series of system-wide optimizations and is now passing the cost savings on to developers. They also launched Whisper which allows you to convert audio to text.
Rest of World 🌏
UK and EU agree to crucial Northern Ireland trade deal in Brexit breakthrough. British Prime Minister, Rishi Sunak, described the new agreement as “the beginning of a new chapter” for the relationship between the U.K. and the EU.
Tesla will build a new plant in Monterrey Mexico, an industrial city near the U.S.-Mexico border. Tesla will use recycled water at the plant throughout the entire vehicle manufacturing process, Mexico’s president announced.
China’s factory activity expanded in February as the official manufacturing PMI jumped to the highest level in nearly 11 years. The index hit 52.6 in February, higher than the 50.1 reported for January and above expectations of 50.5.
iPhone supplier Foxconn to build new factory in India as they continue to divest away from China. The new 300-acre facility will be built in Bengaluru, will cost about $700m, and is expected to create about 100,000 jobs.
Crypto ⚡
Coinbase to suspend Binance BUSD trading starting March 13 after finding the token doesn’t meet listing standards. Users will still be able to access their BUSD funds and withdraw them at any time, Coinbase said.
Silvergate announced it would delay its annual filing with SEC. "The Company is currently analyzing certain regulatory and other inquiries and investigations that are pending”. SI 0.00%↑ shares fell 60% this week.
Coinbase is no longer using Silvergate to facilitate dollar payments for its institutional customers and will now use Signature Bank amid concerns about Silvergate’s solvency. Gemini, Crypto.com, and Bitstamp followed suit.
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Earnings Reports 💰
Follow our Twitter account for real-time breakdowns of earnings reports.
Zoom ($ZM) - Report
Revenue: $1.12B vs $1.10B expected and $1.07B year ago (+4% YoY)
EPS: $1.22 vs $0.81 exected and $1.29 year ago (-5% YoY)
Metrics:
Customers >$100K ARR: 3,471 (+27% YoY)
Enterprise Customers: 213K (+12% YoY)
Free Cash Flow: $183m (-3% YoY)
Guidance:
Q1 non-GAAP EPS $0.96 to $0.98 on sales of $1.08B to $1.085B
FY non-GAAP EPS of $4.11 to $4.18 on sales of $4.435B to $4.455B
Market Reaction: -6.7%
—
Snowflake ($SNOW) - Report
Revenue: $589m vs $576m expected and $384m year ago (+53% YoY)
EPS: $0.14 vs $0.05 expected and $0.10 year ago (+40% YoY)
Metrics:
Total Customers >$1M ARR: 330 (+79% YoY)
Total Customers: 7,828 (+32% YoY)
Free Cash Flow: $215m (+111% YoY)
RPOs: $3.7B (+38% YoY)
Guidance:
Q1 Product revenue $568m to $573m (+44% to +45%)
FY Product revenue $2.71B (+40%)
Market Reaction: -12.4%
—
Salesforce ($CRM) - Report
Revenue: $8.4B vs $8B expected and $7.3B year ago (+14% YoY)
EPS: $1.68 vs $1.36 expected and $0.84 year ago (+100% YoY)
Metrics:
Operating Margin: $2.45B (+123% YoY)
Free Cash Flow: $2.57B (+42% YoY)
RPOs: $48.6B (+11% YoY)
Guidance
Q1 EPS of $1.60-$1.61 on revenue of $8.16B-$8.18B ($8.05 est.)
FY EPS of $7.12-$7.14 on revenue of $34.5B-$34.7B ($34.0B est.)
Market Reaction: +11.5%
—
Other Reports
Week Ahead 📅
Monday
Canada - Ivey PMI (FEB) 🇨🇦
Eurozone - Retail Sales (JAN) 🇪🇺
Australia - RBA Interest Rate Decision 🇦🇺
Earnings Reports: Trip.com💰
Tuesday
UK - Halifax House Price Index (FEB) 🇬🇧
Earnings Reports: Sea Ltd💰
Wednesday
US - JOLTS Job Openings (JAN) 🇺🇸
US - ADP Nonfarm Employment (FEB) 🇺🇸
Germany - Industrial Production (JAN) 🇩🇪
Japan - GDP (Q4) 🇯🇵
China - CPI Inflation (FEB) 🇨🇳
Earnings Reports: MongoDB💰
Thursday
US - Jobless Claims 🇺🇸
Japan - BoJ Interest Rate Decision 🇯🇵
Earnings Reports: Crowdstrike, Ulta Beauty, BJs Wholesale, Asana💰
Friday
US - Nonfarm Payrolls (FEB) 🇺🇸
US - Unemployment Rate (FEB) 🇺🇸
UK - GDP (JAN) 🇬🇧
UK - Manufacturing Production (JAN) 🇬🇧
Germany - CPI Inflation (FEB) 🇩🇪
Earnings Reports: Docusign💰
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