Market Munchđ| 27 July 2022
Google and Microsoft spring on rosy guidance, Inflation forces consumer prices up, and Shopify CEO admits that he messed up.
Good morning Munchers!
Here is your daily dose of the news that matters, from Wall Street to Dalal Street - in 4 minutes and 27 seconds.
Letâs dive in.
Whatâs hot, whatâs not?
Market Commentary
Retail stocks dragged the market down however futures are up after promising guidance from some of the biggest companies reporting.
Biggest concerns from almost everyone is that the two biggest problems are inflation and a stronger dollar.
US Fed Hike later today sets the scene! 12:15AM Dubai time.
IMPORTANT EARNINGS RELEASES TODAY -
- SHOPIFY, BOEING, SPOTIFY, T-MOBILE all before market open.
- META, FORD, QUALCOMM, ETSY all after market close.
Story Roundup
1 - Worldâs largest consumer groups drop price hikes.đ¸
Inflation is a very real problem - and itâs pressing down on the largest consumer groups in the world.
Here are their expectations for their prices by the end of the year
- Coca Cola, +3.5%-5%
- McDonalds, +12-14%
- Unilever, +11%
Walmart also warned yesterday about âfood and fuel inflation affecting the way consumers spendâ - which would end up taking a 13-14% toll on their profits.
Those grocery bills still have quite some room to swell. đ
2 - Microsoft shrugs off worries for earnings. đť
Despite the gloomy macro environment, Satya Nadellaâs ship is still sailing smoothly.
Microsoft missed analyst estimates on both income and revenue by a few percentage points - but the stock (NASDAQ:MSFT) managed to climb 5% on some upbeat guidance for the rest of the year.
Nadella said that their cloud computing was acting as âa deflationary forceâ - helping Microsoftâs top-line even as the economy weakens.
Demand for their cloud platform hasnât gone anywhere - rising 46% year-on-year.
Overall, they expect that their profits are gonna grow ~10% over the rest of the year.
Happy days. âď¸
3 - Google âdisappointsâ across all business but investors breathe a sigh of relief. đŽâđ¨
While missing estimates, Googleâs (NASDAQ:GOOG) revenue grew 13% for the June quarter.
Revenues were down on a year-on-year basis across almost all business units - but that can be explained by the surge in demand last year.
Their stock was up almost 5% in a relief rally that their results werenât as bad as they could have been.
Net profits - down $2.5bn
Google Cloud - down $267m
Waymo - down $300m
YouTube - $200m short of expectations
Theyâre shaking it up - as Pichai said that theyâre looking to go for some serious capital allocation and make the best of the bear market.
4 - Shopify CEO admits that âI got this wrongâ. đŹ
Shares in the worldâs biggest ecommerce platform fell 15% (NASDAQ:SHOP) after they announced that theyâd be firing over 1,000 employees.
They won out big in 2021 as every brick-and-mortar store signed themself up to sell their products online - but as pandemic fears go away, acceleration in ecom has slowed.
This news comes after they announced a venture into the NFT space, and a possible move to B2B.
They report earnings today - all eyes on them now.
5 - El Salvador shoos away default fears with a bond buyback. đŞ
El Salvador has a plan to buy back $1.6bn of itâs own sovereign debt to push default fears away.
Their debt has traded at a very, very deep discount since they adopted Bitcoin as legal tender.
El Salvadorâs unrealized Bitcoin losses now lie at $57m and Moodyâs also downgraded them to junk.
The IMF also wasnât happy - as they denied a $1bn loan request over El Salvadorâs heavy reliance on the cryptocurrency.
Aaaand thatâs a wrap.
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