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Good Morning Everyone!
Remember, the bigger the drawdown the better bigger the bounce.
Big Tech down on cautious guidance
Validates much of the macro concern in the broader market
U.S. 30 year mortgage hits 7%, highest since 2000
Crude 86 +1%
Higher this morning on a slightly lower U.S. dollar
10:30 a.m. Department of Energy oil inventory report
Wuhan locked down one of its central districts following new Covid cases
900,000 residents told to stay home
15% EBIT miss
Margins below expectations with high headcount addition of +12,700 (+24% y/y)
Google said headcount growth would be half of what Q3 was but it’s not enough to offset decelerating revenues
Continued tough comps in Search and YouTube
Search proved resilient +4% but YouTube missed, down 2% y/y (FX was a factor)
Google Cloud beat at +38% y/y
Repurchased $15 billion
Consensus estimates coming down in the next few days
Posted its weakest quarterly sales growth in 5 years (FX was a big factor).
Azure down two consecutive quarters, growth +42% vs. guide at 43%
Azure guide below expectations, cautious on new deal among SMB (small and medium businesses)
Expected headwinds on FX, weak PC/Windows and weak Advertising spend
Commercial booking slowed to +16%
Office 365 grew 17%, inline
Server Products up 4%
Windows fell 15% y/y on weak PC demand
CEO: Weak economy impacting PCs, Ad spend and LinkedIn
Guide: Auto is strong but personal electronics and industrial weaker into Q4
Guided down 12% q/q at the midpoint, $4.6 billion vs. street at $4.9 billion (management is usually conservative on its guide)
Question on the call: will auto market roll over? Yes, we’re just not sure when”
Free cash flow $1.98 billion, paid $1 billion in dividends and $$1 billion in buybacks
Q4/2022 EPS $1.93 vs. street $1.86
Beat driven by higher revenues offsetting higher incentives
Total U.S. payment volume remained flat so far in October vs. September
Cross-border volumes in October to date reached nearly 120% of 2019 levels
Guide for high single digit growth in fiscal 2023
In the quarter, repurchased 10.8 million shares for $2.1 billion
The Board authorized a new $12 billion buyback
No 2023 guidance but street at 10% net revenue growth
CEO spoke to a 'high risk' of global recession.
“The reality is we do know that there are some changes in consumer behavior going on but they're still spending the same amount of money and they are still paying in the same way, which are critical to us.'
Spotify -5%, gross margins missed
Automatic Data Processing
Meta 5 p.m. call, 14% implied move
ServiceNow 5 p.m. call, 8% implied move
Check Point 8:30 a.m. call, 5% implied move
Shopify 8:30 a.m. call, 9% implied move
Mastercard & BitOasis
Mastercard marches deeper into crypto
Partnering to launch crypto-linked payment cards in Middle East and North Africa (MENA)
Expected launch early 2023
Mastercard already has several similar partnerships
Nexo, Bitkub, Coinjar, Amber Group
Bitcoin price approaching production cost
Production cost ~$16,900
Price has hit production cost 3 other times in past 5 years
Rallied each time
MEME OF THE DAY
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