Apple's blockbuster quarter

The world's most valuable company just posted the highest revenue in its history. Apple's (AAPL) sales in the holiday quarter climbed 11% to $123.9B, led by strength in the iPhone, which generated $71.6B of revenue over the three-month period. Earnings also topped $30B for the first time, and shares responded by soaring 5% AH on Thursday, a notable price movement in the current volatile market environment and recent upheaval plaguing the technology sector.

Quote: "This quarter's record results were made possible by our most innovative lineup of products and services ever," CEO Tim Cook announced on a conference call, pointing to the iPhone 13, Apple Watch Series 7 and revamped Macs. "We are gratified to see the response from customers around the world at a time when staying connected has never been more important."

While supply chain problems cost the company "more than $6B" in revenue, the results showed a victory against the logjams and chip shortages that have hit many industries during the pandemic. In fact, the Wearables unit, which includes the Apple Watch and AirPods, generated $14.7B in revenue during the period, up from the $12.9B seen in the first quarter of 2021. Services revenue also rose to $19.5B in the quarter, up from $15.7B in the year-ago period, with more than 785M paid subscriptions across the segment.

Block beware: As the Cupertino-based company published earnings, Bloomberg reported that the tech giant was "planning a new service that will allow iPhones to accept payments with the tap of a credit card." That would essentially turn the devices into payment terminals and threaten Block's (SQ), formerly known as Square, presence in the space. The system would likely use the iPhone's near field communications, or NFC, chip that is currently used for Apple Pay, and wouldn't require any extra hardware.

Ice age

The EU and the U.K., with support from the U.S, are drawing up plans to sanction Russia's energy sector if the country invades Ukraine. The group would cut off new gas projects from Western financing and technology, which could hamper Moscow's ability to drive new production in the future. Russia is likely to unveil counter-sanctions, in a similar process that occurred following its annexation of the Crimean peninsula in 2014.

Would it backfire? The 27 nations of the EU buy about 40% of their natural gas from Russia, so it is looking elsewhere for a vast supply. Diplomats have even been speeding up negotiations for fallback sources with gas producers around the globe, like Azerbaijan and Qatar. The Biden administration has also held a marathon of video calls in recent days trying to convince buyers in South Korea, Japan and elsewhere - that have already paid for their imports - to let the U.S. reroute the shipments to Europe.

"Politically, we are very keen to help both the United States and Europe, but in reality we cannot just walk away from our long-term commitments to Asia even if it is just for a short period,” a senior Qatari adviser told the WSJ. "The U.S. and other players in Europe will have to do a lot of convincing here."

Go deeper: U.S. LNG exporters, which are already running near capacity, have told officials that they are sending as many shipments as they can to Europe without violating other customers' long-term supply agreements. In fact, Europe is taking 70% of America's LNG cargoes, according to S&P Global Platts. There are also some near-term bottlenecks that have to be ironed out, including a limited number of U.S. export terminals that can turn gas into a liquid so it can be shipped over long distances.

Autonomous spin

What's it like to take a spin in an autonomous vehicle? "It's just surreal," General Motors (NYSE:GM) CEO Mary Barra declared after her first trip in the company's driverless cars without a safety driver. In a clip uploaded to YouTube, she is seen riding in a retrofitted Chevrolet Bolt EV with Kyle Vogt, founder and interim CEO of Cruise, GM's majority-owned autonomous vehicle subsidiary. "That was incredible," she adds. "This is going to change the way people move in such a positive way... I'm over the moon."

Backdrop: In March 2016, General Motors acquired Cruise for an undisclosed amount, although reports have placed the number between $500M to north of $1B. Just nine months earlier, Cruise had received a permit to test self-driving vehicle technology from the California Department of Motor Vehicles, and it soon formed the core of GM's self-driving efforts. Fast forward to September 2021... Cruise lands a permit to provide driverless taxi rides in the state and is valued at around $30B following a series of funding rounds.

Some internal disagreements recently enveloped the subsidiary, with Dan Ammann, a former GM executive who was leading Cruise, leaving last month. Kyle Vogt has since stepped into the role, though it's still unclear what led to Ammann's abrupt departure. As recently as October he had forecast that Cruise would commercialize its robotaxi in San Francisco in 2022, followed by a ramping up of 1M such vehicles by 2030.

Outlook: "I think the apprehension that some people think they have is going to dissipate extremely quickly once they get the experience," Barra said after her ride in San Francisco. "We were in the vehicle for 5 minutes and the trust is there." GM expects the operations to potentially contribute up to $50B in annualized revenue by the end of this decade, with analysts viewing the autonomous driving industry as a potential multitrillion-dollar market.

New revenue stream

The latest results from Robinhood (NASDAQ:HOOD) failed to impress investors, with the stock plunging over 14% premarket to under $10, following a 6% fall during the regular session on Thursday. The retail brokerage posted weak revenue guidance, as well as big earnings and revenue misses in Q4, as the retail trading frenzy in meme stocks and crypto lost steam. That's prompting the industry pioneer, which brought commission-free trading to the masses (via payment-for-order-flow), to look for new revenue streams.

Quote: "We're close to delivering a feature that our customers have been asking for an even larger window of available trading hours," CEO Vlad Tenev said on an earnings call. "We call this feature hyper-extended hours and anticipate rolling it out later this quarter."

Currently, Robinhood only allows premarket/extended trading 30 minutes before the stock market opens at 9:30 a.m. and for two hours after the close at 4 p.m. Other electronic brokers offer more extended access, allowing trades as early as 4 a.m. and as late as 8 p.m. Liquidity is relatively thin at those times, which could lead to major price swings, though the increased risk is sometimes tolerated by regular traders, like during earnings season when reports are released outside of scheduled trading hours.

Why not 24/7? Crypto trades around the clock, and futures almost do as well, but when it comes to the U.S. stock market, many feel that better price discovery happens when most Americans are awake. For many market makers, exchanges, brokers, investment houses and even financial professionals, a shift to 24/7 trading would also make their lives more complicated, and in many ways, they dictate the resources in the current trading environment. However, hedge-fund billionaire Steve Cohen is trying to change that by seeking approval from the SEC for first U.S. stock exchange that would operate around the clock, including holidays and weekends. His startup, called the 24 Exchange, has the potential to shake up market dynamics and many like the New York Stock Exchange (NYSE:ICE) and Nasdaq (NASDAQ:NDAQ) are watching.

Today's Markets

In Asia, Japan +2.1%. Hong Kong -1.1%. China -1%. India +0.1%.
In Europe, at midday, London -1.2. Paris -1.7%. Frankfurt -2%.
Futures at 6:20, Dow -0.7%. S&P -0.6%. Nasdaq -0.2%. Crude +0.5% at $87.07. Gold -0.6% at $1782.90. Bitcoin -0.9% to $36450.
Ten-year Treasury Yield +3 bps to 1.84%

Today's Economic Calendar

8:30 Personal Income and Outlays
8:30 Employment Cost Index
10:00 Consumer Sentiment
1:00 PM Baker-Hughes Rig Count

Companies reporting earnings today »

What else is happening...

U.S. economy grew by 5.7% in 2021, fastest clip since 1984.

The Fed needs more than rate hikes, it may need a recession.

Will Caterpillar's (NYSE:CAT) strong backlog support Q4 earnings?

Home Depot (NYSE:HD) appoints company veteran Ted Decker as CEO.

EV stocks like Lucid (LCID) and Tesla (TSLA) lose growth premiums.

Gulf of Mexico oil and gas leases thrown out by federal judge.

Southwest Airlines (NYSE:LUV) guides for profitability after February.

Mondelez (NASDAQ:MDLZ) talks price increases and supply chain problems.

Q4 results at McDonald's (NYSE:MCD) arrive short of expectations.

Meme mania: Is the party over for GameStop (NYSE:GME) and AMC (NYSE:AMC)?