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#Stocks – $AAPL, $AMZN, $META
#Macro – $SPX,
- RTM: Better Luck Next Time
- RTM: FOMC Preview
- RTM Options: Meta Earnings Preview
- RTM: Is The Top Finally In?
- RTM: The Window For Volatility To Rise Is Now Open
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN AAPL AND AMZN
Stocks rebounded today ahead of tomorrow’s job report, with expectations for 185,000 new jobs to have been created, down from 216,000 last month. Meanwhile, the unemployment rate is expected to tick higher to around 3.8% from 3.7% last month, while wage growth is expected to drop to 0.3% in January from 0.4% in December and stay steady at 4.1% y/y. Remember, last year, we got that shock January job report that was much better than expected.
We saw the S&P 500 rebound some today and managed to stall at 4900; it was the spot where the index opened yesterday. Given the results from Meta and its big move higher, it seems we could fill that gap tomorrow, as long as the jobs report comes in ok and has no surprises.
I remained focused on the Implied Volatility levels for the Mag7 names and the S&P 500 and see how this plays out. I’m not sure how the movement in Meta will play into this because the shares are up a lot after it announced a dividend and added on its share buyback program.
Meta released results that were much better than expected, which I would call shock-and-awe on the revenue beat and even the guidance for revenue next quarter. The new dividend was a surprise, so the stock is up 14% after hours. Some of this may have been done to overshadow the higher capex and higher-than-expected expenses. The company sees a capex of $30 to $37 billion in 2024 versus estimates of $33.4 billion. The company also sees total expenses at $94 to $99 billion versus estimates of $96.4 billion. The move up seems like a lot to me, so it will be interesting to see if all the gains hold.
Amazon is trading up 7.5% after hours, which also seems like a lot, considering AWS missed revenue estimates, coming in at $24.204 billion versus estimates of $24.221 billion, which is fractionally, but considering the size of the beat by Azure, the AWS numbers do not seem to compare as well. The company also guided first-quarter revenue of $138 to $143.5 billion versus estimates of $142 billion. It is just surprising I guess to have seen Microsoft go down after it report, and to see these Amazon AWS numbers for Amazon to go up. I get that operating income was better, but still. I own both Microsoft and Amazon.
Of course, Apple reported good numbers on the top and bottom but had horrible numbers out of China, which was a big concern of mine. The company reported China revenue of $20.8 billion versus estimates of $23.5 billion and an 11.4% miss. Services revenue for Apple also missed coming in at $23.1 billion versus estimates of $23.3. billion. Apple does give numbers for guidance, but said it expected revenue to be flat to last year for the fiscal second quarter, versus expectation for 1% growth. The stock is down about 3.5% after hours.
So overall, it was just a strange day, and I could imagine tomorrow getting stranger with the job report still out there.
Charts used with the permission of Bloomberg Finance L.P. This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.