What Happened In The Stock Market This Week?
This was a massive week in the stock market as earnings season was in full swing and Fed Chair, Jerome Powell delivered remarks on behalf of the F.O.M.C (Federal Open Market Committee) regarding interest rate decisions and monetary policy for the Federal Reserve moving forward in 2024.
This week saw tech giants such as Meta ($META), Google ($GOOG), Microsoft ($MSFT), Apple ($AAPL), and Amazon ($AMZN) release their Q4 earnings reports with some sending shares soaring afterwards, and others spooking investors. As well as other S&P 500 companies such as United Parcel Service ($UPS) and Boeing ($BA) release their Q4 earnings.
There were also a handful of small-cap stocks that made noise in the trading community including Rail Vision Ltd. ($RVSN), Remark Holdings Inc. ($MARK), and Minim Inc. ($MINM) as we'll discuss later in the Traders' Recap.
Let's get into it, traders!
F.O.M.C. (Federal Open Market Committee):
We'll start with the body that has a direct impact on monetary policy in the United States; the Federal Reserve. Jerome Powell delivered remarks on Wednesday, to address what the Federal Reserve is planning on doing with interest rates, and also regarding larger policy of the Federal Reserve moving forward in 2024. The key takeaway from the F.O.M.C (Federal Open Market Committee) remarks was that the Fed is planning on leaving interest rates unchanged until they (Federal Reserve) have "...greater confidence that inflation is moving sustainably down to 2%".
After these remarks, $SPY, the primary index that tracks the S&P 500, went down roughly 1.5%, as seen in the chart above, as market participants reacted to news that the Federal Reserve would leave interest rates unchanged for the near future.
Alphabet Inc. (Google) ($GOOG):
Shares of Google ($GOOG) traded relatively flat during the morning session on Tuesday as investors awaited the release of the company's Q4 earnings report. This release came on the heels of tech giants, Microsoft and Meta in rallying to record share prices. Those share increases followed the cost-cutting efforts that executives across all three companies put in place in 2023. Google CEO, Sundar Pichai, said that there will be more layoffs on top of the already 12,000 cuts that were made last year, equaling to roughly 6% of its full-time workforce.
After the release of the Q4 earnings report, share of $GOOG gapped down by more than 6% on Wednesday morning after the company missed analysts' expectations on Google Ad revenue.
Microsoft Corporation ($MSFT):
Shares of Microsoft ($MSFT) traded relatively flat during the morning session on Tuesday, as market participants awaited the release of the company's Q4 earnings report. Microsoft was expected to report revenue growth of 16% for Q4. This was also the first earning release for Microsoft since the company completed the acquisition of game publisher, Activision Blizzard, its largest acquisition deal on record.
Microsoft delivered its best-ever quarterly revenue for its fifth quarter in a row, "a stretch directly coinciding with an explosion in investor interest in AI (Artificial Intelligence) and Microsoft-backed OpenAI's debut of ChatGPT." Despite the positive earnings report, shares of $MSFT traded down by roughly 1.5% during the morning session the following day as seen in the chart above.
Advanced Micro Devices ($AMD):
As we all know, AI was a major trend for the year 2023. Advanced Micro Devices ($AMD) is a company that benefited from that trend and entered the spotlight for market participants.
Last month Advanced Micro Devices launched a new AI-focused chip aimed at challenging the early market dominance of Nvidia. A graphics-processing unit called, MI300X, designed to support generative AI-technologies. This product is expected to produce around $2B in sales over the coming year as the company leverages its new launch against Nvidia's ability to meet the global surge in demand. This comes at a time when Nvidia already has a massive order backlog, which in turn could give $AMD an advantage in early sales.
However, shares of $AMD fell by roughly 5% the following morning after a weaker than expected earnings report for Q4, and unimpressive guidance from company leadership.
United Parcel Service ($UPS):
United Parcel Service ($UPS) was another massive company that produced less-than-stellar earnings report figures for Q4. Shares of $UPS gapped-down by more than 8% as seen in the chart above, after the company fell short of Wall Street revenue estimates. The company reported drops in shipping volume, both internationally and domestically. The company also announced 12,000 layoffs as part of an effort to re-align resources in 2024. The layoffs are expected to save $UPS approximately $1B.
Boeing Company ($BA):
Shares of Boeing ($BA) rose by more than 6% during the morning session on Wednesday, after the release of the company's Q4 earnings report, in which Boeing topped analysts' expectations. However, the company did suspend guidance for the rest of 2024 as it continues to deal with the fallout from an accident involving an Alaska Airlines 737 Max 9, in which a plane suffered a door plug blowout while mid-flight in early January of this year.
Apple Inc. ($AAPL):
Shares of Apple ($AAPL) traded higher by roughly 1% Thursday morning as market participants awaited the release of the company's Q4 earnings report in the post-market. A particular area of focus for investors was how the company was doing in iPhone sales, particularly in China. Investment firms such as Barclays, Piper Sandler, and Redburn Atlantic downgraded the company's stock earlier this month on fears that the iPhone 15 is underperforming in China. This comes as $AAPL stock is down roughly 3.5% over the last month.
Unlike other tech giants Amazon and Meta, which we'll discuss next, Apple shares dropped in after-hours trading, after the release of their Q4 earnings report. The company missed Wall Street analyst revenue expectations and continued to show struggles to gain ground in the Chinese marketplace.
Amazon Inc. ($AMZN):
Shares of Amazon ($AMZN) traded higher by roughly 2% during the morning session on Thursday as market participants awaited the release of the company's Q4 earnings report. Amazon was projected to post record quarterly revenue coupled with significant gains in EPS (earnings per share) and net income. Amazon ended 2023 with strong AWS retail services and advertising sales. The primary growth of Amazon has been fueled by the continued growth and success of its AWS cloud computing segment, which has roughly doubled its net sales in three years.
Amazon exceeded Wall Street analyst expectations for earnings in Q4 and delivered strong guidance for Q1. Their shares gapped-up by more than 7% the following morning as seen in the chart above.
Meta Platforms Inc. ($META):
In one of the most notorious moves of the week, Meta ($META) absolutely crushed their Q4 earnings report and the share price rise reflected it.
Shares of Meta traded higher by roughly 2.5% during the morning session on Thursday as market participants awaited the release of the company's Q4 earnings report. Analysts projected the company to post strong improvement in both EPS (earnings per share) and revenue, as advertising remains strong and the company continues to integrate AI into its operations. This also comes after the company laid off roughly 11,000 workers, equal to roughly 13% of its workforce in an effort to re-align resources aimed at growth and reducing overhead costs.
As seen in the chart above, shares of $META soared more than 20% the following morning after the release of their impressive Q4 earnings report in which the company tripled profits and announced their first ever cash dividend of $0.50 per share.
Ferrari N.V. ($RACE):
Ferrari ($RACE) also released their Q4 earnings report this week as well. Their Q4 report was released Thursday morning. However, their was also major news that broke that helped fuel the rise of this stock.
News broke that F1 (Formula One) superstar, Lewis Hamilton, would be leaving Mercedes to join Ferrari for the 2025 season. The stock rose by more than 10% during the morning session on Thursday as seen in the chart above.
Remark Holdings Inc. ($MARK) (Small-Cap):
Let's get into some small-cap stocks that made noise this week. We'll start with Remark Holdings Inc. ($MARK) as seen in the chart above.
Shares of $MARK fell by more than 40% during the morning session on Wednesday. However, this came after the stock rose by more than 260% the previous day. The volatile rise in price came after news was released that the company had struck a deal with tech giant, Microsoft, on a five-year partnership that included cloud services and marketing. This deal will see the Remark AI business unit consume approximately $80M of Microsoft Azure cloud services. Microsoft will also help drive new customers to Remark AI through its cloud services and co-marketing efforts. The deal will also provide Remark with $2M in Azure cloud service credits and $700,000 in consulting and migration credits.
The stock fell Friday morning back below $0.60 per share.
Rail Vision Ltd. ($RVSN) (Small-Cap):
The second small-cap stock we'll cover this week in our Traders' Recap is Rail Vision Ltd. ($RVSN).
Shares of $RVSN jumped by more than 50% in the morning session after the company said its next generation AI-based computer will be incorporated into its Main Line and Switch Yard systems. The tech company said this advanced system represents a major evolution from its existing AI-based solutions, featuring real-time deep learning capabilities and compliance with stringent railway standards.
Shares of $RVSN fell to below $12 during the morning session on Friday.
Minim Inc. ($MINM) (Small-Cap):
In our last small-cap recap of the week, we will discuss Minim Inc. ($MINM).
After shares of $MINM rose two consecutive trading days in a row, and traded higher by more than 45% during the morning session on Thursday, Minim Inc. released a rare statement on the unusual trading activity of their common stock. In the statement the company said they are "...not aware of any material, undisclosed information related to the company that would account for the recent increase in the market price and increase in the level of trading volume of its shares.".
Even after this statement, shares of $MINM have remained above $6 through the morning session on Friday.
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Resources:
$UPS: https://www.cnbc.com/2024/01/30/ups-reports-drop-in-package-volume-stock-tumbles.html
$GOOG: https://www.cnbc.com/2024/01/30/alphabet-googl-q4-earnings-report-2023.html
$MARK: https://investorplace.com/2024/01/why-is-remark-mark-stock-down-45-today/
https://finance.yahoo.com/tech/apple-quarterly-profit-revenue-top-213025543.html
$AMZN: https://www.investopedia.com/what-you-need-to-know-ahead-of-amazon-earnings-report-8551634
https://www.cnbc.com/2024/02/01/amazon-amzn-q4-earnings-report-2023.html
$RACE: https://theathletic.com/5243409/2024/02/01/lewis-hamilton-ferrari-mercedes/
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