The AP on the Street 31st week of 2023

Last week was quite terrible and interesting, with Fitch’s surprise credit rate blow to the US Government causing the stock market to tank. Oil went up, but other commodities followed the stock market as well.

This week we have the CPI and real CPI, the PPI and real PPI. So, let’s take a look at what happened last week

• Reserve Bank of Australia paused the tightening cycle, thus still having the rate at 4.10%; expectations were for a 25 basis point.
• Pfizer beat its earnings and revenue estimates.
• Caterpillar beat its earnings and revenue estimates.
• US10YR went above 4.20% again.
• US ISM Manufacturing came out as 46.4 points —0.4 points lower than expected.
• US JOLTs came out as 9.582M, worse than expected.
• Gold declined and fell below 2000$.
• Starbucks beat its earning estimates and did not beat its revenue estimates.
• Fitch downgraded the US Government’s credit score.
• Treasury Secretary Janet Yellen says she strongly disagrees with Fitch’s downgrade of the US Government’s credit score. She called it outdated and arbitrary.
• VIX jumped after the market sell-off related to the credit note downgrade.
• Qualcomm beat its earnings and revenue estimates.
• Department of Justice officials are considering fraud charges against Binance.
• JP10YR is now yielding 0.638% —the highest level since April 2014.
• Bank of England raised the interest rates by 25 basis points, as expected —making it 5.25%.
• Bill Ackman said he is shorting 30-year treasuries.
• US ISM Non-Manufacturing PMI came out as 52.7 —0.3 points less than expected.
• Apple beat its earnings and revenue estimates. However, shares fell down due to sales miss.
• Oil prices rose after Saudi Arabia extended output cuts.
• US Unemployment Rate came out as 3.5% —10 basis points lower than expected.
• JP Morgan says they no longer expect a recession in the US.
• DuPont De Nemours beat its earnings and revenue estimates.
• CVS beat its earnings and revenue estimates.
• Booking.com beat its earnings and revenue estimates.

Overall Market Indexes & Commodities Moves (Weekly) (By taking the opening price on Monday and closing price on Friday, using MSN Money)

DOW = -1.1% 

S&P 500 = 2.2% 

NASDAQ = -2.8%

RUSSELL 2000 = -1.9%

Gold = -0.6%

Silver = -2.6%

Oil = 3.08%

The weekly performance of S&P 500 Stocks

Earnings Section:

Next week and this week, from our long top 20 stocks, we will have earnings for the following tickers:

1. DIS (August 8th)
2. DUK (August 8th)
3. ORCL (September 11th)

DIS: The Walt Disney Company is an American multinational mass media and entertainment conglomerate. It operates through two segments: Disney Media and Entertainment Distribution and Disney Parks, Experiences, and Products. The company engages in the production and distribution of film and episodic television content, operates television networks, and offers direct-to-consumer streaming services.

It currently stands at 13th place in our top 20 long stocks due to its good amount of points from the PTBV indicator. It compares the company’s market capitalization to all of its tangible assets.

Last quarter it managed to meet its EPS estimates of 0.93. This quarter analysts increased the estimation for the EPS by estimating a 0.88 EPS (a 5% decrease compared to the last actual figure).

We will see how it will affect our decomposed score after the earnings announcement.

DUK: Duke Energy Corporation is an American energy company that operates through three segments: Electric Utilities and Infrastructure, Gas Utilities and Infrastructure, and Commercial Renewables. The company generates, transmits, distributes, and sells electricity in the Carolinas, Florida, and the Midwest, using various sources such as coal, hydroelectric, natural gas, oil, renewable generation, and nuclear fuel. It also distributes natural gas to residential, commercial, industrial, and power generation customers and invests in pipeline transmission and natural gas storage facilities.

It currently stands in 6th place in our top 20 long stocks due to its good amount of points from the PTBV indicator. It compares the company’s market capitalization to all of its tangible assets.

Last quarter it missed its EPS estimates of 1.26 estimated and 1.20 actual. This quarter analysts increased the estimation for the EPS by estimating a 0.98 EPS (an 18% hike compared to the last actual figure).

We will see how it will affect our decomposed score after the earnings announcement.

Important data/ decisions that will be published next week:
The FOMC Interest Rate decision, Q2 GDP, Services PMI, and the PCE and Core PCE prices

Important data/ decisions that will be published next week:
The CPI and real CPI, the PPI and real PPI

TIL: What is Diluted EPS?

Diluted Earnings Per Share (EPS) is a profitability calculation that measures the amount of income each share will receive if all of the dilutive securities are realized1. Dilutive securities are securities that can be converted to common stock, such as convertible bonds, convertible preferred stock, employee stock options, and warrants. Diluted EPS takes into account all convertible securities, whereas basic EPS only takes into account a company’s common shares. Diluted EPS is considered a more conservative metric because it indicates a worst-case scenario in terms of EPS.

We will see how the investors will behave after all of the data and decisions. Stay tuned.

DISCLAIMER: THIS TEXT CONTAINS NO INVESTMENT ADVICE.