Weekly Digest - May 5th
Markets extended last week’s bullish momentum, with the S&P 500 rising by approximately 2.20% this week. After a volatile start during President Trump’s first 100 days, markets are showing signs of calming, but still appear shaky. Goldman Sachs CEO David Solomon believes the volatility will settle as a new normal takes shape.
Meanwhile, the trade war between the United States and China remains deadlocked, with neither side willing to back down. Hedge fund titan Bill Ackman noted that China and the United States are highly incentivized to bring tariffs down to more reasonable levels, such as 10%-20%, but fear appearing weak. Ackman suggested implementing a 180-day pause to allow for constructive negotiations.
In a major development, Warren Buffett, the legendary “Oracle of Omaha,” announced his decision to step down as CEO of Berkshire Hathaway during the firm’s latest shareholder meeting. On the topic of trade, Buffett echoed the sentiments of many affected by tariffs. He stated, “Trade should not be a weapon,” emphasizing that the U.S. has already won and should focus on doing what it does best while engaging in fair global trade.
Weekly Earnings Roundup: Surprises & Misses
Last week was a huge week for investors, with earnings announcements from major companies including Apple (NASDAQ: APPL), Microsoft (NASDAQ: MSFT), Meta (NASDAQ: META), Coca-Cola (NASDAQ: KO), Visa (NYSE: V), Berkshire Hathaway (NASDAQ: BRK-A), McDonald’s (NYSE: MCD), and MasterCard (NYSE: MA).
Meta delivered a strong performance, reporting a 16% YoY revenue increase and a 35% rise in net income. The stock rose around 7% during the week. Apple also posted growth, with quarterly revenue up 5% year-over-year. However, CEO Tim Cook’s warning that anticipated tariffs could cost the company around 900 million dollars this quarter, combined with a reduction in share buybacks, weighed on investor sentiment and led to a 5% drop in share price. Coca-Cola posted mixed results, with a slight decline in sales but an increase in net income and earnings per share.
Top Gainers
Seagate (NASDAQ: STX) was among the top gainers this week, with shares climbing around 14% following better-than-expected earnings. Analysts have maintained a Buy rating on the stock, with target prices ranging from 110 to 120 dollars.
Microsoft shares (NASDAQ: MSFT) surged by around 11% after their quarterly earnings beat Wall Street Estimates. The most interesting part that excited investors was a 35% growth in their Azure business, Microsoft's cloud computing and AI platform. Analysts remain bullish on the stock, with BMO, Mizuho, and Bank of America Securities raising their price target based on improved earnings and a positive business outlook.
Top Losers
Atlassian (NASDAQ: TEAM) shares tumbled by around 10% after the company missed third-quarter expectations. Slowing revenue growth and widening net losses prompted analysts to lower their price targets.
Eli Lilly (NYSE: LLY) also dropped its share price by around 10% despite beating earnings estimates. The drop was driven by a downward revision in profit forecasts for the upcoming year and increased competition from Novo Nordisk (NYSE: NVO).
Hertz (NASDAQ: HTZ), the car rental company, saw its share price decline by approximately 16% over the past week. The drop came after the company announced its plans to tap the debt market to raise around 500 million dollars, which raised concerns among investors given Hertz’s already substantial debt load of 6 billion dollars.
Upcoming Earnings: Key Stocks to Monitor
Markets are back in action this week with key companies such as AMD (NASDAQ: AMD), Novo Nordisk A/S (NYSE: NVO), Uber (NYSE: Uber), MercadoLibre (NASDAQ: MELI), Walt Disney (NYSE: DIS), and Shopify (NASDAQ: SHOP) set to report earnings this week.
AppLovin Corporation (NASDAQ: APP) is another company set to announce earnings this week that is worth watching. Investors can use Streamlined Finance to cut through the noise and uncover hidden gems through data-driven insights on momentum, business quality, and more using the Find Stocks Page. AppLovin ranks among the top companies, making it a name worth watching.
