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Markets Close Higher Following Powell Presser; META, QCOM, ETSY Report
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Wednesday, July 31st, 2024
Markets closed higher today, in the wake of the latest Fed meeting. The Federal Open Market Committee (FOMC), followed by Fed Chair Jerome Powell’s press conference this afternoon, gave no surprises to the market. What it did was allow speculation to continue that rate cuts are indeed on the horizon. The Dow closed +99 points, +0.24%, while the Nasdaq zoomed up +451 points, +2.64%. The S&P 500 and small-cap Russell 2000 were +1.58% and +0.51%, respectively.
The Fed’s press release following the meeting generated no significant waves. In fact, it read fairly boiler-plate, much along the lines of press releases throughout the year explaining that the Fed is keeping interest rates at 5.25-5.50% — where they’ve now been for exactly one year. “The economy is expanding at a solid pace… nominal wage growth has eased…” said Powell. The Fed remains committed to its 2% inflation goal — not 2.5% or 2.6%, apparently, as we saw in last week’s Personal Consumption Expenditures (PCE) data.
Clearly the Fed feels they can afford seven more weeks of dwindling labor market and inflation data. PCE results are still half a point above the optimal inflation rate, but today’s private-sector payrolls from Automatic Data Processing (ADP) showed only 122K jobs filled this month — basically the amount of replacement hires needed to cover all the monthly retirees. Powell did get a bit of pushback from reporters about the severity of the current labor situation, but he said, “I feel good about where we are,” and “the totality of data” will determine rate levels.
On the issue of a September cut, Powell was noncommittal. After taking a break in August, the next FOMC meeting is scheduled for September 17-18 — seven weeks from now. Powell put to rest any political considerations, considering this next meeting will be itself seven weeks prior to the General Election. “It’s coming to be time to adjust (interest rates),” Powell said. On whether we may see a 50-basis-point (bps) cut instead of 25 bps, he said the Fed was not thinking 50, but not ruling it out either.
Meanwhile, Meta Platforms (META - Free Report) posted a strong Q2 beat this afternoon. The parent of Facebook, Instagram and What’sApp generated earnings of $5.16 per share on quarterly revenues of $39.04 billion, outpacing expectations of $4.70 per share and $38.24 billion, respectively. Operating margins came in at +38%. Daily Active People (formerly Daily Active Users) grew to 3.27 billion, Average Price per Ad gained +10% year over year, and the company has Cash and Equivalents of a whopping $58.08 billion. Revenue guidance was upped to $38.5-41 billion, even with a forex headwind of +2%.
Qualcomm (QCOM - Free Report) recorded beats in its fiscal Q3 report after the close. Earnings of $2.33 per share surpassed estimates of $2.25 (and well ahead of the $1.87 per share from the year-ago quarter), with revenues of $9.4 billion outpacing the $9.23 billion expected. Guidance of $2.45-2.65 earnings per share and $9.5-10.3 billion in sales were ratcheted up from the $2.44 per share and $9.70 billion from the Zacks consensus. It also posted a fourth-straight record high in auto chip sales. QCOM shares are up +5% in the after-market.
Etsy (ETSY - Free Report) posted a mixed Q2 late Wednesday. That said, revenues and Gross Merchandise Sales (GMS) are more important for Etsy’s business than straight earnings, which missed estimates by 5 cents to 41 cents per share. Revenues grew admirably to $647.8 million from $633.5 million projected, though GMS reached $2.9 billion, -2.1% year over year. Gifting GMS grew +4.1% from a year ago. Shares had been trading down -19% year to date,
Image: Shutterstock
Markets Close Higher Following Powell Presser; META, QCOM, ETSY Report
Wednesday, July 31st, 2024
Markets closed higher today, in the wake of the latest Fed meeting. The Federal Open Market Committee (FOMC), followed by Fed Chair Jerome Powell’s press conference this afternoon, gave no surprises to the market. What it did was allow speculation to continue that rate cuts are indeed on the horizon. The Dow closed +99 points, +0.24%, while the Nasdaq zoomed up +451 points, +2.64%. The S&P 500 and small-cap Russell 2000 were +1.58% and +0.51%, respectively.
The Fed’s press release following the meeting generated no significant waves. In fact, it read fairly boiler-plate, much along the lines of press releases throughout the year explaining that the Fed is keeping interest rates at 5.25-5.50% — where they’ve now been for exactly one year. “The economy is expanding at a solid pace… nominal wage growth has eased…” said Powell. The Fed remains committed to its 2% inflation goal — not 2.5% or 2.6%, apparently, as we saw in last week’s Personal Consumption Expenditures (PCE) data.
Clearly the Fed feels they can afford seven more weeks of dwindling labor market and inflation data. PCE results are still half a point above the optimal inflation rate, but today’s private-sector payrolls from Automatic Data Processing (ADP) showed only 122K jobs filled this month — basically the amount of replacement hires needed to cover all the monthly retirees. Powell did get a bit of pushback from reporters about the severity of the current labor situation, but he said, “I feel good about where we are,” and “the totality of data” will determine rate levels.
On the issue of a September cut, Powell was noncommittal. After taking a break in August, the next FOMC meeting is scheduled for September 17-18 — seven weeks from now. Powell put to rest any political considerations, considering this next meeting will be itself seven weeks prior to the General Election. “It’s coming to be time to adjust (interest rates),” Powell said. On whether we may see a 50-basis-point (bps) cut instead of 25 bps, he said the Fed was not thinking 50, but not ruling it out either.
Meanwhile, Meta Platforms (META - Free Report) posted a strong Q2 beat this afternoon. The parent of Facebook, Instagram and What’sApp generated earnings of $5.16 per share on quarterly revenues of $39.04 billion, outpacing expectations of $4.70 per share and $38.24 billion, respectively. Operating margins came in at +38%. Daily Active People (formerly Daily Active Users) grew to 3.27 billion, Average Price per Ad gained +10% year over year, and the company has Cash and Equivalents of a whopping $58.08 billion. Revenue guidance was upped to $38.5-41 billion, even with a forex headwind of +2%.
Qualcomm (QCOM - Free Report) recorded beats in its fiscal Q3 report after the close. Earnings of $2.33 per share surpassed estimates of $2.25 (and well ahead of the $1.87 per share from the year-ago quarter), with revenues of $9.4 billion outpacing the $9.23 billion expected. Guidance of $2.45-2.65 earnings per share and $9.5-10.3 billion in sales were ratcheted up from the $2.44 per share and $9.70 billion from the Zacks consensus. It also posted a fourth-straight record high in auto chip sales. QCOM shares are up +5% in the after-market.
Etsy (ETSY - Free Report) posted a mixed Q2 late Wednesday. That said, revenues and Gross Merchandise Sales (GMS) are more important for Etsy’s business than straight earnings, which missed estimates by 5 cents to 41 cents per share. Revenues grew admirably to $647.8 million from $633.5 million projected, though GMS reached $2.9 billion, -2.1% year over year. Gifting GMS grew +4.1% from a year ago. Shares had been trading down -19% year to date,
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