Feb 20: Monday Market Report

A Quick Look at the Economic Pulse

Note: This is the first Market Report we are putting out at Elf. We aim to deliver this weekly every Monday going forward.

Defying expectations, consumers continue to buy with retail sales jumping, despite inflation and interest rate hikes. More insights on consumer spending will be clear when Walmart $WMT and Home Depot $HD post results on Tuesday.

Retail investors pour into equities, while institutional investors remain bearish and dump $19B (over the year so far) into corporate bonds, according to the Financial Times.

Eyes are focused on the Federal Reserve’s Personal Consumption Expenditures (PCE) price index, which shows how closely how quickly prices are rising across the economy. This report comes out Friday morning. The Core PCE is expected to go up 0.4%, just a bit from from December at 0.3%. Prices in January most likely went up 0.5%, according to data compiled by Bloomberg.

Other metrics of interest include the Consumer Price Index (CPI) out last week that showed inflation picked up in January, while cooling only slightly over the year to 6.4%.

On Friday, the Dow Jones and S&P 500 were both down, while the Nasdaq was up. The road has been bumpy in terms of price stability, but strong economic data from jobs to consumer spending have kept a recession at bay.

Both Goldman Sachs and Bank of America analysts expect another rate increase, potentially in March to offset inflation by the Federal Reserve.

The stock and bond market at home will be closed today (Monday) for President's Day. Brick and mortar banks, all government agencies, public libraries and the post office are closed. Most big box retailers and grocery stores will be open.

Upcoming earnings reports this week led by Walmart, also include: Home Depot, Alibaba Keurig, Dr Pepper, Live Nation, Moderna, PG&E, and Warner Bros. Discovery.

Data for this report has been compiled from Yahoo! Finance, WSJ, FactSet, Bloomberg, and the Financial Times.

Apple's Bolstering the Economy With Slew of New Products Along with Other S&P Tech Stocks

In a Year of Tumultuous Change due to the Outbreak of COVID-19 worldwide, Apple Along with High-Performing S&P Tech Stocks, Bolsters the Economy

“Apple capped off a fiscal year defined by innovation in the face of adversity with a September quarter record, led by all-time records for Mac and Services. Despite the ongoing impacts of COVID-19, Apple is in the midst of our most prolific product introduction period ever, and the early response to all our new products, led by our first 5G-enabled iPhone lineup, has been tremendously positive. From remote learning to the home office, Apple products have been a window to the world for users as the pandemic continues, and our teams have met the needs of this moment with creativity, passion, and the kinds of big ideas that only Apple can deliver.”

— Tim Cook, Apple’s CEO

Data via Refinitiv; Graph by Julia Horowitz, CNN

On Thursday, Apple announced financial results for its fiscal 2020 fourth quarter ended September 26, 2020 with a record September quarter revenue of $64.7 billion and quarterly earnings per diluted share of $0.73. Live streaming of Apple’s Q4 2020 financial results conference call is now available at apple.com/investor/earnings-call/ for two weeks. Consolidated financial reports can be viewed here.

Other notable S&P tech stocks keeping the economy going strong include Alphabet’s Google, Amazon, Netflix, Facebook and Microsoft.

Data via FactSet, Image via Financial Times, Mamta Badkar

Over the course of the last three months starting in September, Apple has been releasing a slew of new products with one event per month.

September’s Event brought a new Apple Watch SE, an eighth generation iPad, iPad Air and iOS 14.

October’s Event brought a brand new iPhone 12 with Pro and Max versions and a new HomePod Mini.

This month on November 10th, Apple is expected to release new products such as updated MacBook Pros and the debut of Apple Silicon Macs.

COVID-19 has brought on many challenges, but it has also brought opportunities from increased product delivery at home for Amazon, which has seen its revenue skyrocket to $96 billion in the past quarter - a new record - to an increased demand for Apple’s products as more people work from home.

Apple Hits Trillion Mark Again by Market Cap

For a second time, matching last year’s performance, Apple became a trillion dollar company by market cap, which consists of the total outstanding shares multiplied by stock price.

Hitting a stock price above $221.28 in intraday trading today, Apple reached a market cap just above $1 trillion based on its 4,519,180,000 outstanding shares as of July 19, 2019, which the company shared in its most recent SEC quarterly 10-Q filing. The company also continues to buy back shares. Apple’s stock AAPl went up by 3 percent after Apple hosted its popular annual iPhone and Apple Watch event at the Steve Jobs event yesterday.

Microsoft at $1.03 trillion, is the only other American company to achieve the trillion dollar market cap in recent times, but Amazon has achieved this in the past and Alphabet, Google’s parent company, has come very close.