Morning Reads
- ASML, Europe’s Most Valuable Tech Firm, Is at the Heart of the US-China Chip War
- U.S. Consulting Firm Is the Latest Target of a Chinese Crackdown
- McCarthy Debt Plan Passes House, Escalating Standoff With Biden
- Powell Faces Pushback Inside Fed Over Need to Cool Wage Gains
- Still Going Fast, Inflation Changes Drivers
- Deutsche Bank Plans More Job Cuts After Traders Trail Peers
- At Charles Schwab, Being a Big Bank Has Become a Big Problem
- JPMorgan Creates AI Model to Analyze 25 Years of Fed Speeches
- Profit Margins Are Sliding for Americans Who Sell Their Homes
- When Megamergers Fall Apart
- As Regulators Block Tech Deals, They Increasingly Look to the Future
- Kaiser Permanente to Acquire Geisinger
- Elon Musk Ramps Up A.I. Efforts, Even as He Warns of Dangers
- Facebook Parent Meta Platforms Sees First Sales Increase in Nearly a Year
- Disney Sues Ron DeSantis After Oversight Board Voids Theme-Park Agreements
- Freddie Mercury Estate Sale to Auction Original Lyrics to “We Are the Champions” and More
Todays Open Interest Change
PREMIUM
Prepper
Meta (META) earnings call: Never mind the ad beat, here's the AI future (and present). Disney (DIS) sues Florida Gov. DeSantis after district clampdown. Biogen (BIIB) gains as Medicare to cover new Alzheimer’s drug with full FDA approval. Learn more about these stocks with Seeking Alpha Premium.
This is an abridged transcript of the podcast.
- Meta Platforms is trending higher following its earnings report Wednesday. The company beat on top and bottom lines.
- Today is crypto Thursday. We’re hearing from our weekly contributor Mike Fay. He’s the Investing Group leader of BlockChain Reaction on Seeking Alpha. *audio from Mike Fay* He’s also talking about the number 2 coin, Ethereum.
- Biogen closed the day Wednesday up 2 percent. This after Medicare agreed to cover a new Alzheimer’s drug.
OUR TOP STORY
Meta Platforms stock (NASDAQ:META) is up 11% premarket following first-quarter earnings where it easily beat expectations on top and bottom lines, thanks to a better-than-expected ad recovery at its flagship Facebook platform.
Meta Platforms Q1 GAAP EPS of $2.20 beats by $0.23. Revenue of $28.65B (+2.7% Y/Y) beats by $990M.
Facebook daily active users rose 4% to a better-than-expected 2.04B, and monthly active users were 2.99B, roughly in line with expectations. For the wider "family of apps" (including Instagram and WhatsApp), daily active people rose 5% year-over-year and monthly active people rose 5% both beating consensus.
As with other big tech earnings conference calls, CEO Mark Zuckerberg also focused on AI.
He said "Now more than 20% of content in your Facebook and Instagram feeds are recommended by AI from people, groups, or accounts that you don't follow. Across all of Instagram, that's about 40% of the content that you see."
AI work is also improving monetization, he said: Reels monetization efficiency is up over 30% on Instagram and over 40% on Facebook, quarter-over-quarter.
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Walt Disney (NYSE:DIS) has filed suit against Florida Gov. Ron DeSantis, accusing him of a political effort to hurt the company's business.
The company alleges violations of the Contracts Clause, Takings Clause, Due Process Clause and the First Amendment.
It's asking the court to declare Florida's new Legislative Declaration "unlawful and unenforceable" and that its contracts remain in effect.
Disney says it's "forced to defend itself against a state weaponizing its power to inflict political punishment."
The move quickly followed a vote at a board appointed by DeSantis to nullify agreements made by the company to maintain significant control over expansion at Walt Disney World.
Within minutes, Disney sued DeSantis, the five-member board, and other state officials, accusing them of a "targeted campaign of government retaliation," The New York Times noted.
DeSantis has been at war with Disney in a conflict that ramped up as the company took a position against the state's Parental Rights in Education Act, the so-called "Don't Say Gay" law, under previous CEO Bob Chapek.
That led to a broad effort by DeSantis to end a decades-long agreement between the state and Disney.
He wasn't aware at the time that Disney had reached a deal with the district's outgoing board returning power to the company. DeSantis promised to nullify that action, calling the deal "defective."
NOW MORE ON THE MARKET
The S&P 500 and Dow finished Wednesday's trading in the red, the Nasdaq, posted a modest gain.
The Nasdaq (COMP.IND) closed +0.5%, the S&P 500 (SP500) finished -0.4% and the Dow (DJI) ended -0.7%.
Ten of the 11 S&P sectors posted losses. The only exception was Info Tech, which climbed 1.7%. Meanwhile, Utilities led the decliners, dropping by 2.4%. Materials, Industrials, Health Care and Energy all fell by more than 1%.
MSFT jumped 7% after the software giant beat expectations with its quarterly results, bolstered by strength in its AI and Azure cloud businesses. Elsewhere among the megacaps, Alphabet (GOOG)(GOOGL) also announced its quarterly update, although the Google parent largely treaded water despite Street-beating earnings.
Meanwhile, First Republic Bank (FRC) continued its recent decline, dropping another 30% amid ongoing concern about its balance sheet.
Calling it a "rather peculiar day" for Wall Street, market expert Daniel Jones told Seeking Alpha that insolvency risk at FRC undercut the strong tech earnings as "the issues weighing on the market more broadly seem to be centered around the financial sector." Jones added that worries about a renewal of banking instability has "rattled" markets.
Jones says "Investors who are worried about this can play this a couple of different ways.” He explains that "You can take the contrarian path and go bargain hunting by looking at the companies most negatively affected but that don't deserve to be affected. Or you can choose a flight-to-safety path by moving more toward cash or companies that are less likely to be subjected to the vagaries of the market."
Turning to the bond market, yields edged higher following a sharp drop the previous day. The 10-year yield (US10Y) climbed 5 basis points at 3.45%, while the 2-year yield (US2Y) rose 5 basis points to 3.94%.
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Today is crypto Thursday
We’re joined by our weekly contributor Mike Fay. He’s the Investing Groups leader of BlockChain Reaction on Seeking Alpha.
Today’s topic…wild bitcoin (BTC-USD) swings and an ETH staking update.
*audio from Mike Fay*
I’ll leave a link to Mike Fay’s author page in show notes.
MORE OF OUR TOP STORIES
Tyson Foods (NYSE:TSN) plans to reduce its corporate headcount by 10% of corporate jobs and senior leadership ranks by 15%.
According to a memo seen by Reuters from CEO Donnie King, affected employees will be notified by the end of the week.
As of the close of the company’s most recent fiscal year, the company boasts about 118,000 employees in the US, 6,000 of which are corporate staff.
The Reuters report added that vice presidents and senior vice presidents are the senior positions on the chopping block.
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Biogen (NASDAQ:BIIB) shares bounced back Wednesday after a top Medicare official said that the agency would cover the new Alzheimer's treatment Leqembi (lecanemab) in the event of full US FDA approval.
Biogen shares closed up 2% Wednesday.
Testifying before the House Subcommittee on Health, the Centers for Medicare and Medicaid Services (CMS) Administrator announced the decision on Wednesday.
In January, the FDA granted accelerated approval for Leqembi (lecanemab). The agency is expected to decide on its full approval by July 6.
Early this year, Lilly (LLY) failed to secure the agency's accelerated approval for its Alzheimer's drug.