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- 👉 The Investing Week Ahead: An Amazon Dividend Too?
👉 The Investing Week Ahead: An Amazon Dividend Too?
Apple, Mastercard, and more...
Welcome to your new week.
Before we jump in… here are three podcast episodes to get that Monday rolling!
If you like any of the shows above, please hit that ‘Follow’ button. It means a lot and allows me to continue podcasting!
A crazy week has officially arrived. Let’s dive right in.
Key Earnings Announcements:
Over 20% of S&P 500 companies report earnings this week — with health care among the most represented.
Monday (4/29): Chegg, Domino’s Pizza, Franklin Templeton, Logitech, ON Semiconductor Corp, Paramount Global, Phillips, Sofi Technologies
Tuesday (4/30): 3M, AMD, Amazon, Caesars Entertainment, Coca-Cola, Eli Lilly, McDonalds, PayPal, Pinterest, Starbucks, Super Micro Computer
Wednesday (5/1): Albemarle, Barrick Gold, Carvana, CVS, Estee Lauder, Marriott, Mastercard, Norwegian Cruise Line, Paycom, Pfizer, Qualcomm
Thursday (5/2): Apple, Block, Cigna, Coinbase, ConocoPhillips, Draft Kings, Moderna, Novo Nordisk, Peloton, Penn National Gaming
Friday (5/3): Cboe Global Markets, Cheniere, FuboTV, Hershey
What We’re Watching:
Amazon (+18.2% YTD) releases Q1 2024 earnings on April 30 — with eyes on major growth areas like AWS, digital advertising, and third-party seller performance.
There’s substantial speculation around if Amazon will be announcing a dividend — following suit with Google (GOOG). We’ll also be on the lookout for updates on Amazon Prime’s relationship with the NBA.
Amazon is the second-largest company by sales in North America —expecting to pass Walmart (WMT) in 2025.
Apple (-12.1% YTD) has been the second-weakest performer (after Tesla) within the ‘Magnificent 7’ this year. Apple will disclose Q2 financial results for fiscal year 2024 on May 2 — with analysts focusing on the company's declining iPhone sales in China and its strategies around generative AI.
Despite a 20% YoY drop in iPhone sales in China — Apple saw a modest increase in Mac shipments – growing +2.5% to 5.375 million units.
Don’t forget about the Apple Vision Pro either… as rumors are flying that the demand is much lower than anticipated for the VR headsets.
Mastercard — with a $425 billion market cap — is a dominant force in the electronic payments industry, second only to Visa in market capitalization.
With partnerships spanning over 25,000 financial institutions globally and more than 3.3 billion cards in circulation, the company's growth has outpaced its competitors – achieving a +10.9% CAGR over the past five years.
Mastercard (+8.4% YTD) has strong profit margins and free cash flow generation that underscore its financial health and growth prospects. Visa (V) and American Express (AXP) both crushed their recent earnings reports — so the expectations have quickly grown for Mastercard to follow suit.
Investor Events / Global Affairs:
Japan’s wild currency devaluation, an update on the Fear vs. Greed Index, and Bitcoin’s regulatory road bump.
Japanese Yen Movement
The Japanese Yen reached its weakest level against the US dollar in over three decades — prompting concerns about potential intervention by Japan’s central bank.
Despite a recent rate hike by the Bank of Japan (its first since 2007), the yen has depreciated by -12% YTD — making it the worst-performing currency among the Group-of-10 nations.
The persistent weakness, exacerbated by rising US Treasury yields, has placed Japan’s economic policies under scrutiny – especially as officials vow to combat excessive currency fluctuations. This video is a solid overview of the situation.
We’ve been telling you for nearly two years now that Japan’s currency situation wasn’t going away… example #1, example #2, and example #3. Let’s see how this plays out.
"This reflects the dilemma of an economy burdened by excessive debt, necessitating continuous accommodative monetary policies in the face of structural inflationary pressures.”
Fear vs. Greed Index Quick Update
The Fear & Greed Index measures investor sentiment to reveal how general investor sentiment affects stock prices. Just a month ago — we moved from “Extreme Greed” to “Greed.” Now we’ve entered the “Fear” zone.
Stock price strength is one of 7 main indicators for the index. The performance of major stocks can disproportionately influence overall market returns — so it's crucial to consider broader market health.
Remember — this index is rather simple and we’re not saying that you should trade based on it. We simply love to monitor it, and it has quite a good track record of being consistent with local market lows and highs.
The DTCC Ruling on Bitcoin as Collateral
The Depository Trust and Clearing Corporation (DTCC) has announced that starting April 30, 2024, ETFs with Bitcoin or cryptocurrency investments will have ZERO collateral value for loans within its clearing and settlement services.
That was quite a boring sentence… but the point is that this decision could restrict the financial operations involving Bitcoin ETFs despite their massive popularity. With well over $50 billion of inflows YTD — it will be interesting to see if financial institutions care about the inability to use their crypto ETF holdings as collateral.
While individual brokers may still accept Bitcoin ETFs as collateral based on their own risk assessments — analysts are concerned about potential liquidity issues, foreseeing possible reductions in bank exposure and impacts on asset and corporate bond markets.
Major Economic Events:
We hear new thoughts on the Fed’s rate cut (or hike) plans, JOLTS updates, and the Home Price Index.
Monday (4/29): N/A
Tuesday (4/30): Chicago Business Barometer (PMI), Consumer confidence, Employment cost index, S&P Case-Shiller home price index (20 cities)
Wednesday (5/1): ADP employment, Auto sales, Construction spending, Fed Chair Powell press conference, FOMC interest-rate decision, ISM manufacturing, JOLTS Job openings
Thursday (5/2): Factory orders, Initial jobless claims, US productivity, US trade deficit
Friday (5/3): Consumer credit, US employment report, US hourly Wages, US unemployment report
What We’re Watching:
The Fed is expected to keep interest rates unchanged at its meeting on Wednesday — with the market focus being what Jerome Powell will say about the rest of 2024.
In February 2024, U.S. job openings increased by +8,000 to 8.756 million — slightly above expectations.
In January 2024, the S&P CoreLogic Case-Shiller 20-City Home Price Index rose by +6.6% YoY — marking the largest increase since November 2022.
If you’re starting your investing journey or are interested in buying T-bills yielding 5% or more, consider visiting Public.com.
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If you want to check out the full episode list of the Rich Habits podcast, click here.
Disclaimer: This is not financial advice or recommendation for any investment. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.
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