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Warm Up
-  Big Week - AND HOW!
- Big Caps BIG - Small Caps Small (Regional Bank woes)
--- AAPL declined 3.4% on the week while AMZN jumped 8.0% and META gained 20.5%.
- Shakeup at Morgan Stanley
- Banking Sector Fears (NYCB)
- AI induced euphoria - is that a thing? Market intoxicated on it.

Market Update
- Powell was Hawkish - Markets Didn't Care (past Wednesday)
- HUGE Employment Surprise - Market Didn't Care (after 10 minutes)
- META/Facebook Earning - Yes Markets cared - all day Friday
- Undercurrent of something happening (Region  Bank breakdown - NYCB)
- China comes out strong with market supportive measures  - market rallies 5%

Employment Report
- Much hotter than anticipated
- Treasury Yields and the USD spiked
- Unemployment rate at 3.7% (expected to tick up to 3.8%
- Briefing.com: This report is not likely to persuade the FOMC to cut rates as soon, or as much, as the market had hoped. As a result, the fed funds futures market repriced the probability of a 25-basis points rate cut at the March FOMC meeting to 20.5% (from 38.0% yesterday and 47.6% one week ago) while the probability of a 25-basis points rate cut at the May FOMC meeting has been reduced to 74% (from 93.8% yesterday), according to the CME FedWatch Tool.
- markets were a bit flushed on the initial report but tossed it aside and preferred to focus on META earnings

Rate Cut Odd for MARCH
- As a result of the Fed meeting and employment report, the fed funds futures market repriced the probability of a 25-basis points rate cut at the March FOMC meeting to 20.5% (from 38.0% yesterday and 47.6% one week ago) while the probability of a 25-basis points rate cut at the May FOMC meeting has been reduced to 74% (from 93.8% yesterday),

SO REACHING
- Chicago Fed President Austan Goolsbee said Friday that while the January job report was impressive on the surface, underlying details were not as strong.
- “The headline number was almost breathtaking,” Goolsbee said in an interview on the “PBS NewsHour” program.
- “If you peel back the onion a little bit, it’s not as strong as that headline number advertises … but it’s still very strong,” he said.
- In particular, he noted that hours worked fell 0.2% last month despite the jump in net new jobs.

Amazon - Blowout
- Earnings per share: $1.00 vs. 80 cents expected by LSEG
- Revenue: $170 billion vs. $166.2 billion expected
- Amazon Web Services: $24.2 billion vs. $24.2 billion, according to StreetAccount
- Advertising: $14.7 billion vs. $14.2 billion, according to StreetAccount
- Amazon said first-quarter sales will be between $138 billion and $143.5 billion, representing growth of 8% to 13%. Analysts were expecting revenue of $142.1 billion, according to analysts.

META - BLOW-OOOUUUUTTTT
- Meta Platforms beats by $0.51, beats on revs; guides Q1 revs above consensus;
- FY24 total expense guidance unchanged at $94-$99 bln,
- CapEx guidance of $30-$37 bln, up $2.0 bln at high end;
- They stopped spending on META.
- Initiates quarterly dividend of $0.50/share, also announces $50 bln increase to share repurchase program.
- Stock up 21%

Apple Earnings
- headline: Apple beats by $0.08, beats on revs; iPhones and services beat; China revenue declines 13.1% 
- Magic words: CEO Tim Cook thinks there is a huge opportunity to for Apple on AI, but he does not want to get ahead of things.
- Apple reports Q1 iPhone revenue of $69.7 bln vs. $67.9 bln Street ests and $65.8 bln last year
- Apple reports Q1 services revenue of $23.2 bln vs. $22.5 bln ests and $20.8 bln last year.
- Q1 China revenues were $20.8 bln vs. $23.95 bln last year.
--- Not great for the run this stock has had....

More Apple
- Apple ended Samsung Electronics' 12-year run as the largest seller of smartphones in the world, after commanding a 20% market share in 2023, according to a report from International Data Corp

AMD
- Earnings came in "okay" but guidance was a disappointment (guidance lower than anticipated)
- That sent the stock down 4% on the news and then it started to climb
- Now the new narrative is that AMD is going to be working on personal computers chips to perform AI functions
-- AGAIN there is no product yet - just discussion and the stock is trading at nose-bleed levels

Eli Lilly Earnings
- Eli Lilly today reported fourth-quarter revenue and adjusted earnings that topped expectations on the strong launch of its new weight loss drug, Zepbound, and higher prices for its blockbuster diabetes drug, Mounjaro.
- Earnings per share: $2.49 adjusted vs. $2.22 expected
- Revenue: $9.35 billion vs. $8.93 billion expected
- Stock hit another all-tome high of $741 before reversing sharply and closing near $700

Weigh Loss
- Novo Nordisk's parent company on Monday said it will acquire drug manufacturer Catalent in a $16.5 billion deal that could help boost the supply of the highly popular weight loss injection Wegovy and diabetes shot Ozempic.
- Catalent is the main supplier of fill-finish work, which involves filling and packaging syringes and injection pens, for Novo Nordisk's Wegovy.

Chevron Earnings
- Chevron said its fourth-quarter profit fell sharply from a year ago, weighed down by a number of impairment charges, but the second-largest U.S. oil company still to managed to return a record amount of cash to its shareholders in 2023.
- Earnings per share: $3.45 adjusted vs. $3.21 expected
- Revenue: $47.18 billion vs $51.62 billion expected
---- The oil major returned $26.3 billion to investors by paying out $11.3 billion in dividends and buying back $14.9 billion in shares last year. It did so even as its profit dropped about 40% to $21.4 billion from $35.5 billion in 2022.

MICH
- Sentiment INCREASING
- 69.7 for December
- Increase reflected by an improved view of inflation and personal incomes that should bode well for consumer spending activity.

Bye Mike
- Mike Wilson, Morgan Stanley’s top US equity strategist, is stepping down from his role as chair of the firm’s Global Investment Committee, according to an internal memo.
- The Wall Street giant’s top-rated US equity strategist will step off the GIC “to focus on serving his key institutional clients, where the demand for generating tactical alpha is intensifying,” the emailed note from Jed Finn, chief operating officer of Morgan Stanley Wealth.
- Mike was really bearish over the past couple of years.

More Bank
- UH-OH
- Cracks again|
- NYCB - last year bout Signature bank (absorbed) in a very peachy deal and also merged with Flagstar Bank (Michigan)
- Whacked dividend and earnings call was very concerning - shares down 40% last week
-- Concentration in commercial properties as well as other specific loans - underwater
--- Lots of players out saying this is a one off and not systematic and specific to NYCB

Gold Update
-  Gold demand hit record highs in 2023 as persistent geopolitical tensions and weakness in China's economy pushed investors toward the safe haven asset, the World Gold Council said in report.
- Total gold transactions stood at 4,899 tons last year compared with 4,741 tons in 2022, inclusive of over the counter deals as well as stock flows that reflect changes to inventories on commodity exchanges.
- 2023 was the second highest year in history of central bank gold buying, within a hair's breadth of the record high in 2022

And a feel good story
- Brian Moynihan’s total compensation as chief executive officer of Bank of America Corp. declined 3% to $29 million for 2023, a year in which profit fell and the firm’s shares performed the worst among its biggest rivals.
- The board granted Moynihan $1.5 million in salary and $27.5 million in stock-based incentive awards, the Charlotte, North Carolina-based lender said Friday in a filing. A year ago, Moynihan’s compensation was cut 6.3% to $30 million after earnings tumbled and the shares sank.

 

 

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