Will US Market Google To Moon @5.25% Interest?
US market was still rocking as per my yesterday’s post "A" for Alphabet, "B" for Berkshire, "C" for Coca Cola...
True to form, the “tri-factor” mentioned in above post, kept the US market engine reviving.
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By the time market called it a day:
DJIA: +0.08% (+26.83 TO 35,438.07). Rose for the 12th time. Wow!
S&P 500: +0.28% (+12.82 to 4,567.46). Fresh 15th month high. Wow too!
Nasdaq: +0.61% (+85.69 to 14,144.56). Working its way back to last Wed high of 14,358.02.
I am gloating (a little) now because I was “spot on” to focus only on $Alphabet(GOOG)$ in my yesterday’s post instead of other Mega cap stocks reporting their quarterly earnings too:
How Did Google Perform?
For starters, quarterly earnings exceeded Wall Street expectations. Yay!
As shared in yesterday’s post, results were helped by (a) steady demand for its cloud services and (b) a rebound in digital advertising.
Google not only deliver fantastic earnings that (i) exceeded expectations, (ii) squashed investors’ doubts on its ability to keep up with other tech giants on the AI frenzy.
Google achieved them by a “considerable” margin,
Zooming in on the details
Google’s Q2 2023 Earnings: (expected by Refinitiv)
Net Income: $18.37 Billion vs $16 Billion (Q2 2022); that’s a +14.81% gain YoY.
Earnings: $1.44 per share vs. $1.34 per share, adjusted.
Revenue: $74.6 Billion vs. $72.82 Billion expected (see below).
Google - Revenue by Quarter (from 2019 until present..)
Further details: (according to Street Account)
Traffic acquisition costs: $12.54 Billion vs. $12.37 Billion.
YouTube ads: $7.67 Billion vs. $7.43 Billion.
Google Cloud: $8.03 Billion vs. $7.87 Billion. Q2 Operating income came in at $395 Million vs -$590 Million (YoY). As of Q1 2023, Google is still one of Top 3 cloud providers (see below).
Top Cloud providers - Worldwide (Q1 2023)
Future Money Spinners (in the making?)
Divisions - (1) Waymo self-driving car business and (2) Verily life sciences unit, reported a +48% increase in revenue to $285 Million.
However, the division still lost -$813 Million in the period.
Factors Affecting US Market Today?
(1) Mega Cap companies quarterly reports out today:
Coca-Cola (am).
Boeing (am).
AT&T (am).
Lam Research Corporation (pm).
Meta Platforms (pm).
Companies releasing earnings results in the morning will join Google, Microsoft, Visa & Texas Instruments in influencing US market direction.
(2) Fed FOMC meeting & 2:30pm Press Conference.
Believed the market is more interested in what the Fed has to say at the 2:30pm press conference chaired by Mr Powell.
The 0.25% interest hike is almost a “done” deal.
With this, it will be the 11th interest hike since March 2022, taking the benchmark borrowing rate to its highest level since early 2001.
The question on everyone’s mind will be “whether Federal Open Market Committee officials feel they’ve gone far enough”.
Hoping that the reply from Mr Powell will not be “cryptic” nor “ambiguous”; as that would not sit well with the US market.
My Personal View:
Individual stock will rise, or fall based on its “own” quarterly results.
US market sentiments for today hinges on what the Fed has to say post FOMC meeting at the press conference.
Official data out so far will not generate the kind of impact; not unless its Friday, PCE data.
Do you think US market will continue to rally today?
Do you think the Fed will throw hints at halting interest hike? If so, this might drive market to the next level.
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Rating is very important (to me).
Will u consider "Follow me" to get first hand read of my Daily new posts? Thanks!