The Market News Reel for this week! Get the most important market news & updates for the week ahead! Major headlines, excerpts from news sources and a link to the full article are shown below. "Breaking Thoughts" section is purely our opinion. We hope everyone had a Merry Christmas, a Happy New Years' and a great Holiday Season with friends and family!
Apple Market Cap Hits US$3 Trillion in First Trading Day of 2022
"It looks like those mega-cap companies, kicking off the new year on the right foot-- namely Apple, which is now a $3 trillion company.
The biggest company in the solar system. That's what I'm going to say. I don't know about the galaxy." - read more on Yahoo Finance here
Breaking Thoughts: Apple continues to grow at over 30% in 2021. Drivers of this growth are services, M1 chips and of course the iPhone refresh cycle. Expanding more aggressively into fitness is also opening up interesting opportunities, as Peloton ($PTON) stock tumbles, its connected workout apps & hardware (bikes), are starting to look like they would be a nice fit in Apple's ecosystem. Acquiring Peloton with near $5B revenue could be a great way for Apple to accelerate market share in the space.
Future growth prospects have also improved over the last year as the battle with Facebook -Meta- begins to heat up. The market for wearables (which Apple already dominates), AR glasses and VR headsets are expected to be the next big computing platform. Apple along with Meta, Sony, Snap, Roblox, Activision, Microsoft, and Tencent will all be investing billions into the space on both the hardware and software side. The winners, like those that won the smartphone wars, can expect stellar outperformance relative to their peers. It seems the market is starting to price in continued Apple dominance.
Tesla has Record Q4, 0.94M Deliveries in 2021, Stock Up 13.5%
"Tesla is up after they reported their fourth quarter vehicle deliveries. 308,600 is how many vehicles they delivered in the fourth quarter. That means the total for the year, 936,000, which is an 87% gain year over year.
I mean, you look at the quarterly run rate, annualize it, it's 1.2 million. That's a lot of cars for Tesla. I still remember the days of reporting when Musk was on the line there. And he was calling it production hell. So Tesla has come a long way. A lot of that volume, a lot of the increase in that coming from Shanghai." - read more on Yahoo Finance here
Breaking Thoughts: Its another staggering beat by Tesla, with most analysts estimating around 850k cars for 2021. What's more impressive is that the new giga factories in Berlin and Austin are still only in testing, and have yet to come online. When they do, the current run rate of 1.2M vehicles could expand to nearly 2.4M.
Further, the global chip shortage hit volumes hard for most major automakers down 10%-40%. Tesla, with its agile approach to manufacturing, was able to redesign the electronic control architectures of their vehicles to take advantage of the chips they could get their hands on and keep production running at full clip. It demonstrates part of Tesla's technological advantage over legacy auto, and markets have responded positively with Tesla up over 13% on the first trading day of the year.
Major Earnings This Week
Wednesday January 5:
UniFirst (UNF): Expected Q1 earnings of $1.95 per share
Thursday January 6:
Bed Bath & Beyond (BBBY): Expected Q3 earnings of $0.002 per share
Constellation Brands (STZ): Expected Q2 earnings of $0.68 per share
PriceSmart (PSMT): Expected Q1 earnings of $0.93 per share
Walgreens Boots Alliance (WBA): Expected Q1 earnings of $1.33 per share
WD-40 (WDFC): Expected Q1 earnings of $1.25 per share
Major IPOs Expected This Week
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See you next week!
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