It Girl Identity: Issue 20

It Girl Identity Newsletter

Grab your banana chai latte, dive into this week’s market movers, learn why earnings reports are important, and check out our curated recommendations from It Girl Identity!

What’s Moving Markets

This week, investors will closely watch major companies’ earnings reports, such as Tesla, Amazon, Dow, Nasdaq, and S&P, and evaluate whether they met expectations. Upcoming releases of economic indicators such as initial jobless claims, home sales, and PMI will tell us more about the current effects of monetary policy and will bring us closer to the next FOMC meeting decision.

What’s Up

• Taiwan Semiconductor Manufacturing Company (TSMC): TSMC, the chip stock, rose 10% after beating Q3 earnings estimates. Their net profit increased 54% due to the high demand for AI applications, and they reported their revenue from AI is expected to triple in 2024.

• Netflix (NFLX): Netflix rose 11% after reporting a 15% rise in Q3 revenues to $9.8 billion. They also attracted 5.1 million new subscribers in the last 3 months. The drive in growth is also due to their investment in live sporting events, and overall levels the playing field for Netflix among larger streaming service platforms.

• Blackstone (BX): After releasing their earnings, Blackstone rose 6% as it beat Q3 distributable estimates and reported $41 billion in new net inflows to reach total AUM of $1.1 trillion. Financials overall were the top-performing sector this week with positive earnings for banks and IB activity, along with potential for another rate cut.

• Top S&P 500 Gainers: Netflix +11.09%, DexCom +4.07%, Southwest Airlines +2.96%.

What’s Down

• ASML Holdings (ASML): Did not meet expectations.

• CVS Pharmacy (CVS): CVS announced a change in their CEO, as Karen Lynch resigned after less than four years. Their earnings also fell short, and the company cut guidance for the 4th time this year due to problems with its Aetna segment. The company overall is experiencing pressure from its board involving a possible breakup of Caremark and Aetna, and their stock fell 19% on Thursday, and another 5% on Friday.

• Top S&P 500 Losers: CVS Health -5.23%, American Express -3.15%, Dell Technologies -2.11%, Citigroup -1.75%.

Markets & Economy

• Nuclear Power: Amazon has joined Google and Microsoft to announce investments of $500 million in atomic energy due to data center and AI demands and meet clean energy goals. Amazon also signed a deal with Dominion Energy to build a small modular nuclear reactor and will also collaborate with Energy Northwest to invest in their reactor developers. Google announced an agreement to purchase power generated from Kairos Power, while Microsoft teamed up with Constellation Energy to revive the Three Mile Island plant in Pennsylvania. This is due to how much electricity and data AI models use to generate responses, and nuclear energy creates a larger amount of power that is stable and consistently available on demand.

  • This news raises the potential for a growing nuclear sector. After Amazon’s announcement, nuclear power plant developers Oklo and NuScale increased over 40%, along with Vistra, Constellation Energy, and Dominion, and even some uranium-related companies like Centrus Energy.

• Uber Acquiring Expedia: Uber has explored the idea of an Expedia acquisition, which adds to its attempts to transform into a “super app” like other multipurpose platforms in China, such as WeChat. It already has plans to expand into train and flight booking, along with airport shuttle services in New York, due to the high level of M&A activity as it reached profitability for the first time last February. Expedia shares rose 3.8% after the report, while Uber fell 2%.

• Chinese Economy: China reported its GDP grew 4.6%, the weakest pace since Q1 2023. Their economy has experienced a weak property sector, slowing consumer demand, deflationary risks, and slowing export growth. Xi Jinping’s stimulus package disappointed investors, but the Central Bank just added an 800 billion yuan stock liquidity measure in hopes to spur investments.

Earnings Calendar

This Week's Major U.S. Economic Reports & Fed Speakers

Here is a quick breakdown of this week’s Fed Speaker events and economic indicators, what they mean, and their forecasts!

Monday, October 21

Speakers: Dallas Fed President Lorie Logan, Kansas City Fed President Jeff Schmid, San Fransisco Fed President Mary Daly

Tuesday, October 22

Speakers: Philadelphia Fed President Patrick Harker

Wednesday, October 23

Speakers: Fed Governor Michelle Bowman

• Existing Home Sales (Sep): Forecast: 3.83 million (Previous: 3.86 million).

Thursday, October 24

Speakers: Cleveland Fed President Beth Hammack

• Initial Jobless Claims (Oct 19): Forecast: 250,000 (Previous: 242,000).

  • Definition: Measures the number of new claims for unemployment benefits, indicating job market health.

• New Home Sales (Sep): Forecast: 720,000 (Previous: 716,000).

• S&P Flash U.S. Services PMI (Oct): Previous: 55.2.

  • Definition: Preliminary estimate of services purchasing manager’s index.

• S&P Flash U.S. Manufacturing PMI (Oct): Previous: 47.3.

  • Definition: Advance data on U.S. manufacturing sector.

Friday, October 25

• Consumer Sentiment (Final) (Oct): Forecast: 69.0 (Previous: 68.9).

• Durable-Goods Orders (Sep): Forecast: -1.0% (Previous: 0.0%).

• Durable-Goods minus Transportation: Previous: 0.5%.

  Sources: Nasdaq, Markets Insider, WSJ

How to Read Earnings Reports

What is an Earnings Report? A company's earnings report is a financial statement that details its performance over a specific period, typically a quarter or a year. This report provides key information about the company's revenue, expenses, profits, and losses.

What Information is Included?

• Revenue (Sales): The total amount of money the company earned from its products or services during the period.

• Cost of Goods Sold (COGS): The direct costs associated with producing the goods or services sold by the company.

• Gross Profit: Calculated as revenue minus COGS, this represents the profit made from core business operations before deducting other expenses.

• Operating Expenses: The costs of running the company that aren't directly tied to production, such as salaries, rent, utilities, and marketing expenses.

• Operating Income: Also called operating profit, it’s calculated by subtracting operating expenses from gross profit.

• Net Income: The company's total profit after subtracting all expenses, including taxes and interest. It’s often referred to as the "bottom line."

• Earnings Per Share (EPS): A metric that shows how much profit is attributable to each share of the company's stock. It’s calculated as net income divided by the number of outstanding shares.

• Forward-Looking Statements: Sometimes, earnings reports include management's expectations for future performance, guidance on revenue, or planned expenses.

Why Care About the Report? Investors and analysts use these reports to assess a company's financial health, profitability, and potential for growth. If a company’s report is disappointing, missing investors and market expectations, they might face further losses, and their stock price will decline as investors will not be as confident that the company will be profitable in the long-term.

Disclaimer: Information shared here is for educational purposes only. Consult a financial advisor for personalized advice.

It Girl Recommendations

Shop Our Other Recommendations Here: health, fashion, fitness, education, beauty, and skincare...

Summer Fridays Jet Lag Mask: One product our team has been loving is the Summer Fridays Jet Lag Mask as it soaks into your skin and leaves it feeling fresh, dewy, and elastic!

Burt’s Bees Natural Overnight Intensive Lip Treatment: Lips are left feeling soft and plump after applying the overnight intensive lip treatment. P.S. It smells amazing!

Finance Books

Hey It Girls! Dive into these must-read finance books that will elevate your money game and empower your financial journey. Whether you're just starting out or looking to refine your strategy, these books offer insights and practical wisdom to guide you.

1. Rich Dad Poor Dad, Robert T. Kiyosaki: Discover the difference between assets and liabilities, and learn how to make your money work for you with this timeless classic on financial independence.

2. The One-Page Financial Plan, Carl Richards: Simplify your approach to money with this easy-to-follow guide that helps you create a personalized financial plan tailored to your goals.

3. The Little Book That Beats the Market, Joel Greenblatt: Uncover a straightforward formula for investing in the stock market, designed to help you consistently achieve better-than-average returns.

4. The Richest Man in Babylon, George S. Clason: Travel back in time to ancient Babylon and learn the principles of wealth-building and financial wisdom through engaging parables that are still relevant today.

Source: Four Minute Books

Follow Our Other Socials

• TikTok

• Instagram

• LinkedIn

• Benable

• Amazon Storefront

See you next Monday, It Girls!

With Love,

It Girl Identity