The Rundown - Fed Holds Steady, Big Tech Earnings Kick Off

Episode Date: January 31, 2024

Stock market update for January 31, 2024. The content of the podcast is for general and informational purposes only. All views presented in this show reflect the opinions of the guest and the host. You should not take a mention of any asset, be it cryptocurrency or a publicly traded security as a recommendation to buy, sell or hold that cryptocurrency or security. Guests and hosts are not affiliated with or endorsed by Public Holdings or its subsidiaries. You should make your own financial and investment decisions or consult respective professionals. Full disclosures are in the channel description. Learn more at Public.com/disclosures. Past performance is not a guarantee of future results. There is a possibility of loss with any investment. Historical or hypothetical performance results, if mentioned, are presented for illustrative purposes only. Do not infer or assume that any securities, sectors or markets described in the videos were or will be profitable. Any statements of future expectations and other forward-looking statements are strictly based on the current views, opinion, or assumptions of the person presenting them, and should not be taken as an indicator of performance nor should be relied upon as an investment advice.

Welcome to the rundown, your daily market update in under five minutes. My name is Zad Admani, and today is Wednesday, January 31st. We have an action-packed episode today. We're recapping the earnings from Microsoft and Google. Their numbers were pretty good, but I guess not good enough for Wall Street. We also talk about other stocks making moves today and end the show with a fun fact that kind of blew my mind. All right, let's just get into it. A quick recap on the stock market yesterday.

After hitting all-time highs on Monday, stocks were pretty mixed on Tuesday. The Dow was up, but the S&P finished nearly flat and the NASDAQ took a dip. And I got a feeling today is going to be a bit wild because the Fed meeting is today and we're going to find out what the Federal Reserve will do with interest rates. Now, we're not expecting any surprises today. According to the CME Fed Watch tool, there's a 97% chance of interest rates not changing at this meeting. But more importantly, we're going to hear Jerome Powell's thoughts on the economy and I'm sure investors are going to be hanging on everywhere to find any hints of future rate cuts from his comments.

And on the days that Jerome Powell talks, stocks can get pretty wild. So get ready. And tune into tomorrow's show because we're going to recap the meeting. As for today, markets are having a tough day. The Dow is flat, but the S&P and NASDAQ are both down at the time of this recording, around 1 p.m. Eastern, probably in reaction to some of the big tech earnings that we got yesterday. So let's talk about those big tech earnings. The two big ones we're going to focus on today is Microsoft and Google. Both reported earnings after the bell yesterday and both of their stocks dropped after the earnings came out. Let's start with Microsoft. Microsoft's Q4 earnings, B, expectations on revenues and profit. Let me hit you with some numbers. Microsoft's revenue in Q4 was up 18% to $62 billion. Their profit was up a whopping 33% to $21.9 billion. Man, that's insane. But despite the earnings beat, Microsoft stock dropped more than 2.5% right after the earnings came out. Now the stock did recover a bit. Now it's only trading down around 1.5% at the time of this recording, around 1 p.m. Eastern. See, even though Microsoft beat Wall Street estimates across the board, I think investors were maybe looking for a little bit more juice because there's been a lot of hype around Microsoft thanks in part to AI. They seem to be the leader in the space. They have investments in chat GPT.

And because of that, their stock jumped more than 60% in the past year, hitting all time highs. In fact, their market cap crossed $3 trillion at one point. So the expectations were very high. The analogy that comes to mind is like when someone really hipes up a restaurant saying that it's like the best meal they've ever had. And then you try it yourself and, you know, it's good. But you still kind of feel disappointed because it just didn't live up to the hype. And I think that's what's happening with Microsoft earnings. So Microsoft essentially is like in an out burger, if that helps. Man, I'm probably going to get some upset DMs about that. All right, let's talk about Google's earnings because the story was pretty similar for Google.

They generally beat Wall Street estimates across the board. The revenues were up 13% to $86.3 billion. The revenues for Google Cloud were up 26% to $9.2 billion. YouTube ads brought in $9.2 billion in revenue up 16%. But there was one area where Google missed on earnings, just slightly. That would be Google's search business, which brought in $48.02 billion, and Wall Street was expecting $48.1. So a slight miss, but I guess that was enough to drop the stock. Stock dropped more than 5% after earnings came out, and it's currently down more than 6% at the time of this recording, around 1 p.m. Eastern, making it one of the worst performing stocks in the S&P 500 today. Similar to Microsoft, there was a lot of hype around Google because of AI. Google's been showing off all their AI tools, and because of that, their stock has been up more than 50% over the last. their stocks also hit all-time highs last week and the market cap was about to cross two trillion dollars for the first time ever. But it didn't and now the stock is receding a bit. So they're going to have to wait a little while longer to hit that $2 trillion number. If Microsoft is in and out

burger, Google might be, I don't know, like five guys or something. You know what? That's enough for food analogies today. Let's talk about other stocks making moves. A big winner today is Paramount global. The struggling entertainment company stock is up more than 7% today off the backs of news that billionaire Byron Allen is submitting a takeover offer to buy Paramount at a $30 billion valuation. You know, I feel like I've been hearing about rumors of Paramount being acquired for months now. I guess the sale is finally happening and investors are pretty happy to hear it. Investors of New York Community Bank are probably not happy today because the stock is down more than 35% after reporting pretty shocking earnings.

The regional banks reported Q4 losses of $252 million, which surprised investors. They also cut their dividends. Remember, around March of last year, there was a crisis for regional banks. We had Silicon Valley Bank fail. There was fears that other regional banks might fail. One of those regional banks that did fail was Signature Bank. And in fact, New York Community Bank took over Signature Bank when it failed. So it is a bit concerning to see New York Community Bank reports of staggering losses.

And that's why their stock is down more than 30%. All right, guys, let's wrap up the show with a fun fact. And today's fun fact truly shock me, okay? According to Tickpicks, the average ticket for the Super Bowl, that's happening in Vegas between the Kansas City Chiefs and the 49ers is $9,815. Almost $10,000. That's more than 70% what the average price was last year. And frankly, I don't get it, okay?

Like, I could buy two Applevision pros, which come out on Friday and watch the game in VR with somebody else and still have money left over for snacks, some really good snacks. So, yeah, that's your shocking fun fact for the day. All right, guys, that's all I got for you guys today. I'm about to go watch Jerome Powell's press conference, which I will be covering in tomorrow's show. So make sure you tune in tomorrow to get a recap on that. All right. Thank you guys so much for listening.

See you back here tomorrow. This is Public Live, your real-time resource for news events and trends in the markets. All views presented in this show reflect the opinions of the guests. You should not take any mention of a publicly traded security as recommendation to buy, sell, or hold that security. Public Live hosts are not financial advisors and are not affiliated with public holdings or its subsidiary. You should make your own financial and investment decisions or consult. Respective professionals. Learn more at public.com slash disclosures.

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