Amazon Will NEVER Stop Spending Money

Tale of the Tape

Good evening folks. Stocks gave some of it back today, the S&P 500 fell just under 1% and even the Nasdaq gave up a fraction even with strong tech earnings last night.

Today was all about earnings as companies like Microsoft and Facebook held their gains after last night’s earnings. Tesla ran out of juice. It opened up 8% and closed down 2%. Wild.

Semiconductors got chipped falling almost 4%. Financials, Energy, and small caps were all terrible which feels more on trend.

Today was the final trading day in April so we got freshly minted monthly candlestick charts for the S&P 500 and Nasdaq below.

March saw the biggest monthly decline ever for the S&P 500 while April was up 12.7%, the best month since January 1987. That said, April was an inside month and so, big pic, this is consolidation at a lower level until proven otherwise.

The Nasdaq was up 15.4% for April. This is only 2.8% from the January 2020 close which was the highest monthly close ever. Extraordinary.

Oil giants, Exxon and Chevron report earnings tomorrow before the open. Imagine being those CEOs right now trying to make sense of lunatic oil markets… good luck y’all.

S&P 5002,912-0.92%
Nasdaq8,889-0.28%
Russell 20001,310-3.68%
Dow Jones24,345-1.17%

Amazon Earnings

Amazon reported earnings after the closing bell and it beat on the top line and a miss on the bottom line. Here’s a quick look:

EPS: $5.01 vs $6.25 est.
Revenue: $75.45B vs $73.61B est.

The stock was off 5% after hours on the news.

Here’s a link to $AMZN’s press release and this is the money quote right here:

If you’re a shareowner in Amazon, you may want to take a seat, because we’re not thinking small. Under normal circumstances, in this coming Q2, we’d expect to make some $4 billion or more in operating profit. But these aren’t normal circumstances. Instead, we expect to spend the entirety of that $4 billion, and perhaps a bit more, on COVID-related expenses getting products to customers and keeping employees safe.

Bold and great stuff Mr. Bezos.

Apple Earnings

Apple also posted earnings after the bell. The numbers were strong and the company increased its dividend by 6%. Cash freaking cow. 🐮

EPS: $2.55 vs $2.26 est.
Revenue: $58.3B vs $51.5B est.

iPhone sales ($28.96B) accounted for nearly half of the company’s revenue. 

Here’s what Apple CEO Tim Cook had to say:

We are confident in our future and continue to make significant investments in all areas of our business to enrich our customers’ lives … including our five-year commitment to contribute $350 billion to the United States Economy.

In case you forgot, Apple has $192B in cash. These guys could just buy an island and start colonizing. People would move. You know they would. 😉

Apple was down 1.8% after-hours.

Social Media Wars

Here’s a chart comparing Facebook, Twitter, and Snapchat since $TWTR’s IPO on November 7, 2013. (All three have reported.)

It doesn’t take a CMT to look and see that $FB has absolutely dominated the space. Both $TWTR and $SNAP are below its IPOs while $FB is up over 300%.

Say what you want about him, Zuck prints money and he is just evil enough to kill you. As we speak, he’s probably working out his plan to steal everything from Tik Tok and feed it to the boomers.

How To Spend $2T

Here’s some highlights of the $2T stimulus plan. Note that our House Of Representatives are throwing themselves and an extra $25M just for being such great folks. Such thoughtful Bastards. Also note the $9M to our humble Senate for Miscellaneous Expenses – Which sounds like a euphemism for champagne and caviar.  

Tireless our public servants…

h/t alphatrends

Early Earnings

McDonald’s reported an earnings miss and signaled further weakness, $MCD closed -0.14%.

Twitter posted its highest monetizable daily active user growth since it began reporting the metric back in 2016. Still, the stock fell 7.75%. 

Today on Stocktwits…

This chart was shared by Ian McMillan highlighting the outperformance of semiconductors relative to the S&P 500. Talk about a breakout.

Go Big or Big Home

Barry Ritholtz penned an important piece in Bloomberg Businessweek today about the need to have a really big plan to rescue this nation – something bold and with scale. He writes:

The current rescues only treat the symptoms of economic distress; they do nothing to address structural issues that have been a drag on middle-class household income since the 1980s. If we want to restart the engine that made this nation a superpower, we need to do something big. I mean really, really big: defeat-the-Nazis, land-a-man-on-the-moon, invent-the-internet big.

Check out the full read here. It’s a solid read.

Earnings Tomorrow…

Be sure to know when your stocks report earnings. Here’s the full earnings calendar. 

Links That Don’t Suck

Jaguar Envisions Car Design for a Post-Pandemic World

Ricky Williams and Marijuana Policy in Sports

Millennial Money with Doug Boneparth

Never Catch a Falling Knife

Abstract: The Art of Design – Footwear Design

WeWork Troubles Take Deeper Bite Out of SoftBank

OpenAI introduces Jukebox, a new AI model that generates genre-specific music with lyrics

Animal Spirits: Capitalism As We Know It

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