🫣💰 Big Earnings Week Ahead! (AAPL, AMZN, META)
Welcome to the Sunday Primer,
We have a huge lineup of companies reporting earnings this week where we get to take a look into some of the world’s largest companies and examine their health but more importantly examine the health of the sector and economy as a whole. Read more below!
In other news, I’ve been in Hong Kong for the week visiting my dad and renewing a residency card. I’ll be home tomorrow! I ate at one of the World’s Cheapest Michelin star restaurants today, so you can expect a Tik Tok/Instagram post about that experience this week! :)
- Humphrey, Rickie & Tim
Market Report
Tesla reported lower-than-expected revenue but higher-than-expected earnings. It expects to come up short of its target for 50% growth in vehicle deliveries, partly because of the trouble it’s having getting cars from plants to customers. In Tesla’s earnings call with analysts, Elon Musk noted that he was looking forward to an “epic end of the year” and that he sees a “potential path for Tesla to be worth more than Apple and Saudi Aramco combined”. Apple and Saudi Aramco combine for a market cap of over $4 trillion.
Over in the UK, Liz Truss resigned from the Prime Minister position after a brief and chaotic tenure that drove a liquidity crisis in the Gilt market and caused a brief return to quantitative easing by the Bank of England. Liz Truss resigned after 44 days in office and is set to become the shortest-serving prime minister in British history.
We also got more housing data for the month of September, as existing-home sales fell for an eighth straight month, the longest stretch of monthly declines since 2007.
Forecast Ahead
US Real GDP (Thursday, October 27th)
The Bureau of Economic Analysis will release estimates for Q3 U.S. GDP, which is estimated to be 2%. An increase in U.S. GDP would mark the first quarter of growth since the fourth quarter of 2021. U.S. GDP contracted in Q1 and Q2 of 2022, signaling a technical recession.
Deadline for Elon Musk’s Acquisition of Twitter (Friday, October 28th)
In early October, the Delaware Chancery Court ruled that Elon Musk would have until Oct. 28th to close his acquisition of Twitter if he wants to avoid a trial. While Twitter shareholders agreed to Musk’s purchase price in September, Twitter may be reluctant to walk away from the lawsuit without certainty that all the financing is available to close the deal. According to Elon Musk’s attorneys, “By far the most likely possibility is that the debt is funded in which case the deal will close on or around October 28.”
Corporate Earnings (Throughout Week)
So far, about 20% of S&P 500 companies have reported third-quarter earnings. Of the companies reporting so far, 72% have beaten their earnings projections, slightly below the five-year average of 77%.
October 25th - United Parcel Service (UPS), Coca-Cola Company (KO), General Motors (GM), General Electric (GE), 3M Company (MMM), Raytheon Technologies (RTX), UBS (UBS), Sherwin-Williams (SHW), Alphabet (GOOGL), Microsoft (MSFT), Visa (V), Enphase Energy (ENPH), Chipotle Mexican Grill (CMG), Spotify (SPOT)
October 26th - Boeing Co (BA), Waste Management (WM), Hilton (HLT), Kraft Heinz (KHC), General Dynamics (GD), Old Dominion Freight (ODFL), Ryder System (R), Meta Platforms (META), Ford (F), Teladoc Health (TDOC), Upwork (UPWK), O’Reilly Automotive (ORLY)
October 27th - Shopify (SHOP), Caterpillar (CAT), McDonald’s (MCD), Mastercard (MA), Southwest Airlines (LUV), Northrop Grumman (NOC), Apple (AAPL), Amazon (AMZN), Intel (INTC), Pinterest (PINS), T-Mobile (TMUS), Capital One (COF)
October 28th - Exxon Mobil (XOM), Chevron Corporation (CVX), AbbVie (ABBV), NextEra Energy (NEE), Charter Communications (CHTR)
What We Read Last Week
The Pension Fund Strategy That’s Plaguing the UK Bond Market (Bloomberg)
As Covid Hit, Washington Officials Traded Stocks With Exquisite Timing (WSJ)
Billionaire Bankman-Fried Tries to Fix Crypto’s Hacking Problem (Bloomberg)
Day Traders Go Back to Their Day Jobs as Stock Market Swoons (WSJ)
BOJ Announces Unscheduled Bond Buying as Key Yield Broke Ceiling (Bloomberg)
Memes of the Week
Cue the Liz Truss memes.