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- The Decision Is In
Good Morning!
Happy Thursday! One more day until Friday:
👉The Fed’s decision is here
👉Meta earnings are in
👉Ackman’s IPO is done
FED: Decision Is In
Federal Reserve officials decided to keep short-term interest rates steady on Wednesday but hinted that inflation is nearing its target, which might lead to future rate cuts. However, there were no clear signals of an imminent reduction. Central bankers remain concerned about economic conditions but acknowledged some progress.
Source: CNN
Chair Jerome Powell suggested that a rate cut could happen as early as September if inflation continues to ease, though no decision has been made yet. Markets are anticipating potential cuts in September, November, and December. Stocks rallied after Powell's comments. The Fed's statement showed an upgrade from June, indicating more progress in reducing inflation. The benchmark overnight borrowing rate remains at 5.25%-5.5%, the highest in 23 years, after 11 increases.
🎯GRIT TAKE: We expect a rate cut in… upgrade to VIP now to read the full GRIT Take!
EARNINGS: Meta
Meta shares surged 7% after hours on Wednesday following a strong earnings report. The company surpassed Wall Street's revenue and profit estimates and gave an optimistic forecast for Q3, predicting $38.5-$41 billion in revenue, beating the expected $39.1 billion.
Source: Bloomberg
Q2 revenue grew 22% to $32 billion, marking four consecutive quarters of 20%+ growth. Net income soared 73% to $13.47 billion. Meta's ad revenue, mainly from Facebook and Instagram, increased 22%, outpacing rival Alphabet's 11% Google ad sales growth. Expenses were $24.2 billion, including a $1.4 billion facial recognition lawsuit settlement. Meta reported 3.27 billion daily active users, which aligns with estimates. Since 2022, including 21,000 job cuts, cost-cutting initiatives have boosted operating income by 58% to $14.9 billion, with margins expanding to 38%.
ACKMAN: IPO Over
Bill Ackman’s Pershing Square withdrew its IPO plans due to lower-than-expected investor interest. However, Ackman plans to return with a revised offering for his fund, aiming to model it after Berkshire Hathaway.
Source: NBC
The withdrawal follows Pershing Square's announcement to raise $2 billion, much less than the previously mentioned $25 billion. As of June, Pershing Square managed $18.7 billion in assets, mainly through its European-listed closed-end fund.
Chart of the Day
📊 Amazon Is A Bank
Source: GS Investing
GRIT Meme of the Day 😂
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Source: @wallstreetbets
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