WALGREENS: Earnings Are In

Walgreens unveiled its first-quarter financials on Thursday, surprising the market with better-than-expected earnings and revenue. However, the company also announced a significant cut in its quarterly dividend, slashing it nearly by half. This was the first time in nearly 50 years that Walgreens has reduced its dividend. This adjustment brings Walgreens' dividend yield to 3.9%, based on the stock's closing price on Wednesday, a sharp decline from the over 7% yield it previously offered, which made it the most generous dividend payer in the Dow Jones Industrial Average. Walgreens is doing this to free up cash for the company in the long term. However, some long-term shareholders will not be pleased with the announcement. Walgreens is turning its focus from a drugstore chain to a health-care company, which will take tons of extra capital.

Despite these hurdles, Thursday's report of exceeding earnings estimates marks a significant turnaround. This is especially noteworthy considering that just last October, Walgreens had failed to meet earnings expectations for two consecutive quarters, something it hadn't experienced in almost a decade.

Earnings:

• Earnings per share: 66 cents per share adjusted vs. 61 cents expected

• Revenue: $36.71 billion vs. $34.86 billion expected

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GENERAL MOTORS: Dominates 2023

In 2023, General Motors saw its U.S. vehicle sales jump by 14.1%, marking its most successful year since the pre-pandemic era of 2019 and overcoming prolonged supply chain issues. The company announced on Wednesday that it sold  2.6 million vehicles last year, including 625,176 in the fourth quarter alone, a figure that mirrors the sales from the same period the previous year. The increase in GM's annual sales was primarily driven by a significant 61% surge in its Buick brand, complemented by a 13.1% rise in its Chevrolet division. The GMC and Cadillac brands also experienced growth, with sales increasing by approximately 9% each in 2023.

Comparatively, GM sold around 2.3 million vehicles in 2022 and 2.9 million in 2019. These figures align with the expectations for the overall car industry sales. GM predicts that the total U.S. industry sales will reach 16 million in 2024, potentially the highest since the over 17 million units sold in 2019 and at the upper end of what industry analysts have forecasted.

FED: Releases Minutes

The recently released minutes from the Federal Reserve's meeting in December indicate that interest rates are likely to stay high for a while to ensure a consistent decrease in inflation. However, Federal Reserve members believe that the peak in rates has likely been reached and anticipate cuts starting in 2024. Committee members expressed their anticipation of three rate reductions, each by a quarter of a percentage point, by the end of the year.

The minutes also showed a growing positive outlook on inflation trends, with officials noting significant improvements. Traders have adjusted their expectations for the initial rate decreases to occur in May instead of March.

Headlines You Need To Know: 🎙

• Private payrolls added 164,000 in December

• Peleton partners with TikTok to offer short-form fitness classes

• Online holiday spending jumps nearly 5%

• Apple hit with second downgrade this week

• Google is killing cookies. Advertisers are still not ready.

• Jeff Bezos makes big bet on Google competitor

• Eli Lilly launches website to help patients get weight loss drugs

The Rise of Weather Insurance

This guy used his love for gambling to launch a multi-billion dollar company. In college, David Friedberg would spend the majority of his time playing poker instead of studying. Eventually, he joined Google as one of the first 1,000 employees, but his love for risk management led him to his billion-dollar idea. Friedberg noticed that a rental-bike store would close down every time it rained. He came up with the idea that companies needed weather insurance to protect their bottom line. He was essentially combining his love for poker (risk management) and science.

This led him to create Weatherbill in 2006, which used Algorithms based on tons of weather data to create custom insurance plans based on historical weather patterns. However, the company turned out to be a massive failure because it was focused on too many industries. With a few months to spare, Friedberg changed the focus to only agriculture. United States Soybean and Corn farmers supply 33% of the world’s production, but their number one reason for losses is weather. Weatherbill ended up being a massive hit and being sold for $1.1 billion in 2013.

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