Google Joins The $2 Trillion Club (2024)

Big tech’s big profits drove the market higher today, recovering some of last week’s losses. Earnings and inflation remain the key topics of conversation, with investors trying to determine if the recent volatility is a normal pullback or the start of something bigger. Let’s see what else you missed. 👀

Today's issue covers Google reaching a new milestone, why oil giants still have a gas problem, and the latest “resources” stock to break out.📰

Here's today's heat map:

7 of 11 sectors closed green. Communications (+2.76%) led, & utilities (-1.09%) lagged. 💚

Inflation concerns continued today, as the core personal consumption expenditures prices index (CPE) rose 2.80% YoY in March, coming in slightly higher than anticipated. 🥵

Personal spending rose by 0.80%, outpacing personal income increases of 0.50%. With wage growth slowing and inflation staying sticky, concerns about consumers’ cash cushion are heating up. The personal savings rate fell to 3.20%, down 40 bps from February and 200 bps YoY. 😬

Consumer sentiment also weakened in April, with forward inflation expectations rising to their highest level since November. 👎

The Bank of Japan kept its monetary policy unchanged despite the yen’s recent plunge, causing the currency to fall even further against the U.S. Dollar and other major countries. The central bank did not comment on the yen, even as market participants view its sharp decline as a major macro risk. 🤦

AMC shares popped and dropped after the bell after the movie theater chain previewed its first-quarter results, showing a narrower loss but adjusted EBITDA remaining negative. It also warned that delays from the Hollywood strikes would continue to impact results into the second quarter. 🍿

Shares of Skechers jumped 11% to new all-time highs after its earnings and revenue beat expectations. 👟

And shares of Robinhood, Coinbase, and other crypto-related equities perked up into the weekend, despite BlackRock’s spot Bitcoin ETF seeing its streak of 71 consecutive days of inflows end yesterday. ₿

Here are the closing prices:

STOCKS
Google Bulls Take A Victory Lap

It was not that long ago that Wall Street had left Alphabet for dead, claiming that Microsoft’s AI efforts were set to disrupt search, its cloud business lagged competitors, and that its advertising business was under attack by the likes of TikTok and Meta. 😱

It turns out none of that came true and the company is instead firing on many cylinders, with plenty of cash to buy back shares and begin paying a dividend alongside its longer-term growth investments. 🤑

With the tech stock booming today, long-time believers took their chance to say, "I told you so,” as shares soared to new all-time highs and its market capitalization pushed above $2 trillion.

It’s just the fourth company ever to close at that valuation and is also the fourth most valuable company in the world, sitting just below Nvidia at #3.

With Meta falling sharply this week, Amazon is the next likely candidate. The company reports after the bell on Tuesday, and if its earnings deliver, we could be welcoming a fifth tech giant into the $2 trillion club. 🥂

EARNINGS
Oil Giants Still Have A Gas Problem

Energy stocks continue to get a lot of play, with many stocks in the sector recently breaking out alongside oil prices. But with earnings season upon us, the slower growth in their earnings and revenues could put a damper on things. 😞

Exxon Mobil reported revenues of $83.08 billion, topping expectations of $78.35 billion. However, its adjusted earnings of $2.06 per share missed the $2.20 consensus estimate.

CEO Darren Woods said the results were attributed to noncash tax and inventory adjustments but noted that the company’s cash flow from operations beat Wall Street estimates by roughly $1 billion. 💸

Still, lower refining margins and natural gas prices are pressuring its profitability, with oil and gas production profits falling 12% YoY.

Chevron faced similar issues, with its adjusted earnings beating expectations by $0.06 but revenues missing by about 4%. Like Exxon, its management said lower refinery sales margins and natural gas prices ate into profits in its international production.🔻

Natural gas prices are down 37% this year due to a supply glut, which is likely to remain a headwind for the sector in the coming quarters.

Despite the mixed results, Stocktwits community sentiment around $XOM and $CVX remains bullish. Many feel the broader uptick in inflationary concerns and bid under commodity prices will remain a tailwind for these stocks and the sector going forward. 🛢️

Time will tell if they’re right or if this recent rally is set to run out of gas. 🥁

STOCKTWITS “CHART ART”
$TECK Is The Latest Resource Stock To Break Out ⚒️

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Bullets From The Day

👴Do shrinking “working-age” populations threaten economic growth? Economic and population growth have gone hand in hand for all of modern history, but that’s changing now according to a paper from the Center for Global Development. Countries like Japan, China, Germany, and others have continued to grow even as their working-age population shrinks. More broadly, over a quarter of the world’s population now lives in a country where the working-age population is shrinking rather than growing. China reached that point in 2016, though India and the U.S. have some time, not reaching those levels until 2054 and 2049, respectively. Axios has more.

🧅G/O Media sells The Onion brand to Twilio co-founder Jeff Lawson. No it’s not a joke that the former enterprise infrastructure software company has purchased the satirical online newspaper, becoming the latest in a slew of owners from the last decade. While there’s no inherently obvious reason for him to buy the company, he said he likes it and has the means to buy it. He’ll be returning the company’s focus back to customers, removing things like cookie dialogs, paywalls, bizarre ads, clickbait content, and other things that make the internet suck. More from TechCrunch.

👗New EU regulations take aim at Shein’s counterfeiting problem. The European Union’s (EU) Digital Services Act (DSA) will be applied to Shein now given it’s been designated a “very large online platform” like Amazon and TikTok. With more than 45 million average monthly users in the EU, the recently implemented suite of laws will now apply to the company along with new requirements around illegal products listed on its site. It’ll have four months to submit a risk assessment report and will need to introduce mitigation measures against the sale of counterfeits, unsafe products, and items that infringe on intellectual property rights.. The Verge has more.

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