In this week’s Closing Bull, we cover disappointing big tech results, the continuing worry of inflation, America’s economic growth, and more.
Key News This Week:
Disappointing results with big tech
Amazon profits plunge
Inflation continues to worry
President Biden pitches social spending plan
US economy growth below expectations
Proposal for a new tax on billionaires
Fun Halloween fact
Read the Transcript
Welcome to my financial markets’ re-cap for the week.
Before we get to the news, a quick update on the system. We are in a new trade from the forecast and it’s doing great so far.
We still have time left in this trade, and we remain bullish. However, I do expect there to be some sideways action next week, as nothing goes straight up.
Currently, we are at new equity peaks for the year, so that’s great. Let’s hope it makes even more before we exit.
So that was the system update, what was the news this week?
Big tech reported this week with disappointing results from Facebook, Apple, and Amazon.
Earlier in the week, Facebook missed quarterly sales expectations, but have since re-branded themselves as Meta.
Apple saw double-digit sales growth across nearly all product categories last quarter but missed expectations on supply-chain snags. Tim Cook said that chip supply shortages could have cost the company $6B.
For Amazon, profits plunged by nearly half, to $3.2B, down from $6.3B in the same quarter last year — way worse than expected. Bit of a stinker really.
So even Amazon is having trouble dealing with supply and labor headaches, however, holiday spending is expected to smash records this year.
Although Amazon expects to face billions in extra costs this quarter to manage higher shipping prices and rising wages.
Now, while some of the big tech firms were disappointed, the Food giants McDonald’s, Coca-Cola, and Kraft Heinz reported better-than-expected sales this week, despite raising prices of fan favorites like Big Macs, Heinz ketchup, and Coke Zero.
Inflation worries continue as Global food prices hit a 10-year high this month.
In government news, President Biden pitched an updated $1.75T social spending plan, which includes renewable energy and child tax credits. But House Dems aren’t biting yet and negotiations to get everyone onboard are ongoing.
I doubt this will go another week or two though before some sort of agreement is made.
It has been reported that the US economy grew at only 2% last quarter, much less than expectations. Labour shortage, supply constraints, and inflation are being blamed for what is now being called a longer and shallower recovery from the pandemic.
A proposal for a new tax on billionaires lasted just a few days. The tax would have been levied on unrealized gains as well as realized before questions were raised on whether it was even constitutional.
However, despite it being kicked out, Janet Yellen said she still expects individuals earning higher incomes to pay more in tax.
Well, they’ll have to raise 1.75 Trillion to pay for all their proposals!
Lastly, it’s Halloween, and unlike last year the kids are going trick or treating again, a welcome piece of normality even if some protocols still have to be in place.
And here is a funny Halloween fact, did you know that Michael Myers’ mask is actually a William Shatner mask?
Michael Myers’s mask from the first Halloween movie is iconic, but it has a hilarious back story. The film was shot in just 21 days and was actually on such a tight budget that the crew used the cheapest mask they could find: a $2 Star Trek William Shatner mask. They spray painted it white, shaved off the eyebrows, and enlarged the eye sockets. Apparently, William Shatner was a little disturbed to find this out, wouldn’t you be? Ha!
That’s it from me, have a SPOOKY weekend, thanks for watching and bye for now.