Fast Money Blog- 2/3/23
This week on Wall Street was quite a busy one, as several major companies released their earnings reports and the Federal Reserve had their first meeting of 2023.
On Wednesday, February 1st, the Federal Reserve raised interest rates by a quarter percentage point.
The Fed has said that inflation has eased somewhat but is still high. I have to admit that the Fed’s rate hikes have had a positive impact on the cost of consumer prices.
I expect the Federal Reserve to cease raising interest rates in March and the result will be the return of a bull market.
Now here’s some good news… We did receive positive earnings releases from a number of Wealthy Investor stocks.
On Tuesday, January 31st, Advanced Micro Devices, Inc. (AMD) reported outstanding Q4 2022 earnings, with quarterly revenue of $5.6 billion, up 16% year-over-year.
Major categories broke down like this:
The Data Center Segment, which includes the cloud, had revenue of $1.7 billion, up 42% year-over-year.
The Embedded Segment, which includes AMD’s Ryzen and Xilinx embedded microprocessors, had revenue of $1.4 billion, up $1,868% year-over-year.
These embedded microprocessors can be found in the infotainment systems of automobiles, including the newly updated Tesla Model S and Model X electric cars. In addition, Japan’s major automotive supply company Aisin Corp has chosen AMD's micro processor to power a new system that can help cars park themselves.
Great long-term date, high risk in the short-term.
On Thursday, February 2nd, Apple, Inc. (AAPL), Starbucks Corporation (SBUX) and Amazon.com (AMZN) all released their most recent earnings results.
In Q1 Starbucks reported top-line revenue of $8.7 billion, up 8% year-over-year.
Global comparable store sales for the quarter increased 5%.
In North America and U.S, comparable store sales for the quarter increased 10% year-over-year.
And finally, in the U.S. Starbucks Rewards members rose to a total of 30.4 million, up 15% compared to a year ago.
All of this makes Starbucks a great date or investment.
Now this is interesting… Apple posted Q1 2023 earnings results with top-line revenue of $117.2 billion, down 5% year over year.
Quarterly sales for the iPhone, were $65.7 billion, down 8% from the previous year.
The company said that Covid disruptions significantly impacted the supply of the iPhone 14 Pro and iPhone 14 Pro Max, bringing down iPhone sales.
The good news is that two of its operating segments, iPad and Services, came in with outstanding revenue.
Sales from services, which includes revenue from the App Store and Apple TV+, was $20.8 billion, an all-time revenue record. This was a 6.4% gain in revenue year-over-year.
iPad sales for the quarter came in at $9.4 billion, up 30% year-over-year.
Apple has proven itself to be a great short-term date to trade, as well as a good long-term investment hold.
Now let’s get to Amazon.
The company posted Q4 2022 revenue of $149.2 billion, an increase of 9% year-over-year.
Their North American sales increased 13% year-over-year to $93.4 billion, while Amazon Web Services contributed $21.4 billion, rising 20% from last year.
However, Amazon did lose $2.7 billion during fiscal year 2022. It was Amazon’s 20% investment in the electric automaker Rivian, whose value plummeted 82%, that negatively impacted their bottom line.
That said, while Amazon clearly fits our Wealthy Investor criteria, in this environment it is definitely a higher-risk stock.
So far we have seen great earnings from Wall Street and almost all Wealthy Investor stocks. This is a time to be both conservative and smart as you place your trades going forward.
Again, I expect the market to respond favorably the moment that the Federal Reserve decides to pause interest rate hikes.
Stay Open! Stay Positive!
Tyrone Jackson
The Wealthy Investor