What Moved The Markets This Week 📈
W8 - PCE Inflation Comes In Hot, DoJ To Block Adobe & Figma $20B Deal, Netflix Cuts Subscription Prices, US Sends Troops To Taiwan, Coinbase's Layer-2 Blockchain, and Walmart + Nvidia + Block Earnings
Sunday Morning Markets
Trading Week 8, covering Monday, Feb 20 through Friday, Feb 24. Your weekly financial markets update, in less than 5 minutes.
The Week In Review ⏪
PCE inflation reaccelerated in January to 5.4% for headline and 4.7% for core
S&P composite PMI bounces to 50.2, an eight-month high
Meta launches monthly subscription service, prepares for new round of layoffs
Tesla shifts battery plans away from Germany due to US incentives
DoJ plans to block Adobe & Figma’s $20B deal
Netflix cuts subscription prices in Africa, Middle East, Latin America, and Asia
The US sends troops to Taiwan to facilitate specialized training
Coinbase launches new layer-2 protocol named “Base”
Earnings from Walmart, Nvidia, Block, and more — view breakdowns below
US Markets 🇺🇸
Key Fed inflation measure jumped 0.6% in January and 5.4% during the year, higher than expected. The PCE index increased from the month prior, showing inflation reaccelerated. Core PCE rose 0.6% for the month and 4.7% for the year.
US business activity rebounded to eight-month high in February after the S&P Composite PMI, which tracks the manufacturing and services sectors, increased to 50.2 this month from a reading of 46.8 in January.
Home sales post 12th straight monthly decline to the lowest level in more than a dozen years. Existing home sales plunged 36.9% on a year-on-year basis to a seasonally adjusted annual rate of 4.00 million units.
Meta to roll out paid subscription service for Instagram and Facebook users. “Meta Verified” will cost $12 per month (or $15 on iOS) and allow users to submit photos of government IDs and get a blue verification badge.
Meta prepares for another round of layoffs in its downsizing effort. The Washington Post says that the company plans to push some leaders into lower-level roles without direct reports, flattening the layers of management.
Tesla scales back German battery plans after being won over by US incentives in the Inflation Reduction Act. Tesla is one of the first companies to declare a strategy shift prompted by the IRA.
DoJ plans suit to block the Adobe and Figma deal that valued the design collaboration startup at $20B. The suit would likely claim that Adobe’s acquisition is taking a rising competitor off the market. ADBE 0.00%↑ shares fell 11% this week.
Microsoft strikes a 10-year deal with Nvidia to bring ‘Call of Duty’ and other Activision games to Nvidia’s gaming platform if the Xbox maker is allowed to complete its much-contested $69 billion acquisition of Activision.
Rest of World 🌏
The US sends hundreds of troops to Taiwan to bolster its training program amid a rising threat from China. The Pentagon is helping Taiwan focus on tactics and weapon systems that would make the island harder to assault.
Russia to exit the only remaining nuclear agreement with the United States. In Putin’s State of the Nation address, he announced the suspension of the New START treaty and blamed the West and Ukraine for the war.
Netflix cuts its subscription prices in multiple countries in a bid to spur user growth. According to the WSJ, the price cuts took place in the Middle East, Africa, Latin America, and Asia. NFLX 0.00%↑ shares fell 9% this week.
Eurozone inflation decelerates to 8.6% in January, down from 9.2% in December, marking its 3rd straight monthly decline. However, core inflation rose 5.3%, hotter than expected and an acceleration from December.
Crypto ⚡
Coinbase launches layer-2 blockchain named ‘Base’ to provide an onramp for Ethereum, Solana, and others. The project offers “a secure, low-cost, developer-friendly way for anyone, anywhere, to build decentralized apps on-chain.”
SBF faces four new criminal charges including commodities fraud and unlawful political contributions as he tried “to purchase influence over crypto regulation in DC, by steering tens of millions of dollars in illegal campaign contributions.”
SEC objects to Binance’s $1B Voyager deal, alleging the sale of unregistered securities. The move follows increasing interventions into crypto by the SEC, who last week forced crypto exchange Kraken to shutter its staking operations.
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Earnings Reports 💰
Follow our Twitter account for real-time breakdowns of earnings reports.
Walmart ($WMT) - Report
Revenue: $164.05B vs $159.77B expected and $152.87B year ago (+7% YoY)
EPS: $1.71 vs $1.52 expected and $1.53 year ago (+12% YoY)
Segment Breakdown:
Walmart US: $113.7B (+8% YoY)
Walmart International: $27.6B (+2% YoY)
Sam’s Club: $21.4B (+11% YoY)
Guidance:
Q1 adj EPS $1.25 to $1.30, sales growth +4.5% to +5%
FY adj EPS $5.90 to $6.05, sales growth +2.5% to +3%
Market Reaction: +3.1%
—
Nvidia ($NVDA) - Report
Revenue: $6.05B vs $6.01B expected and $7.64B year ago (-21% YoY)
EPS: $0.88 vs $0.81 expected and $1.32 year ago (-33% YoY)
Segment Breakdown:
Data Center: $3.62B (+11% YoY)
Gaming: $1.83B (-46% YoY)
Professional Visualization $0.23B (-65% YoY)
Automotive & Robotics: $0.29B (+135% YoY)
Guidance: Q1 sales of $6.37B to $6.63B
Market Reaction: +14.0%
—
Block ($SQ) - Report
Revenue: $4.65B vs $4.62B expected and $4.08B year ago (+14% YoY)
EPS: $0.22 vs $0.30 expected and $0.27 year ago (-19% YoY)
Segment Breakdown:
Transaction Based: $1.48B (+13% YoY)
Subscription & Services: $1.31B (+69% YoY)
Hardware: $0.04B (+0% YoY)
Bitcoin: $1.83B (-7% YoY)
Guidance: FY23 Adj EBITDA of $1.3B
Market Reaction: +4.3%
—
Other Reports
Home Depot - Palo Alto Network - Coinbase - Unity - Etsy - Lucid - Alibaba - Intuit - Booking - Wayfair
Week Ahead 📅
Monday
US - Durable Goods Orders (JAN) 🇺🇸
US - Pending Home Sales (JAN) 🇺🇸
Earnings Reports: Berkshire Hathaway, Workday 💰
Tuesday
US - CB Consumer Confidence (FEB) 🇺🇸
Canada - GDP (Q4) 🇨🇦
India - GDP (Q4) 🇮🇳
China - Caixin Manufacturing PMI (FEB) 🇨🇳
Earnings Reports: Target, Sea Ltd, Zoom, Rivian 💰
Wednesday
US - ISM Manufacturing PMI (FEB) 🇺🇸
Germany - CPI Inflation (FEB) 🇩🇪
Earnings Reports: Salesforce, Lowes, Snowflake, Veeva Systems, Splunk 💰
Thursday
US - Jobless Claims 🇺🇸
Eurozone - CPI Inflation (FEB) 🇪🇺
Eurozone - Unemployment (JAN) 🇪🇺
Japan - Consumer Confidence (FEB) 🇯🇵
Earnings Reports: Broadcom, Costco, JD.com, Dollar Tree, Best Buy, Zscaler, Okta, Polestar 💰
Friday
US - ISM Non-Manufacturing PMI (FEB) 🇺🇸
Earnings Reports: Anheuser Busch 💰
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