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💡 But first, the macro wrap-up:
The ‘Magnificent 7’ lost momentum at the start of the week, with big hitters like Apple and Tesla dragging the stock market down. But, Jerome Powell (Chair of the Fed), told lawmakers that he still expects to cut interest rates this year, which propped the market back up. The S&P 500 is up 1.2% this week.
Target jumps 13% 🎯
A profitable holiday season: Despite announcing 2024 could be a weak year for sales, Target shares climbed as holiday season earnings outperformed Wall Street’s expectations.
Net income: The big stat was net income, coming in at $1.38bn. It’s a 58% improvement from this point last year and a significant jump on what Target had forecasted.
Aiming for Amazon: ‘Target Circle’ is launching next month, which is a paid membership programme offering same-day delivery for $49 a year. Can it take a chunk out of Amazon Prime's market share?
Tesla tumbles 10% 🏎️
Yearly low: Tesla shares have hit their lowest point since May 2023, as the EV giant struggles to catch a break.
Complications in China: Car sales have lagged due to the Lunar New Year holidays, and Tesla’s feeling the pinch more than most. Constant price cuts have left investors questioning its margins.
Gigafactory attacks: An activist group launched an arson attack on Tesla’s Giga Berlin factory, claiming the company isn’t as green as it makes out. Tesla could lose out on producing up to 6k vehicles. Elon’s response? The attack was “extremely dumb”.
Apple hits four-month low 📉
A $2bn fine: Apple shares dipped 5% this week, hitting their lowest point since November 2023. Why? Because it was slapped with a hefty $2bn antitrust fine.
Music to Spotify’s ears: Spotify launched a complaint back in 2019, arguing that Apple “muzzled” it from sharing discounts through its iOS app.
Apple’s appeal: Apple will appeal the decision, but it left investors sceptical of future regulatory issues, chipping into App Store revenue. Currently, the App Store is responsible for around 1/5th of Apple’s annual revenue.
What have we learnt this week? 🤓
Target’s adding a subscription based model: It’s not just Amazon that Target’s trying to compete with, but Walmart and Costco, too.
Tesla may lose up to $264m revenue: With the average price of a Tesla being $44k, the latest attack could cost the company $264m in revenue this quarter.
The App Store is under scrutiny: More attempts are being made to put limits on the App Store, which is accountable for around $77bn of Apple’s annual revenue.
Stock announcements 👀
Here are the key earnings dates to look out for next week:
Monday 11th March: Oracle
Wednesday 13th March: Dollar Tree
Thursday 14th March: Adobe
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*Figures and ratings correct as of 7th March 2024.
Past performance does not guarantee future results. Capital at risk when investing. This content is for educational purposes only. Shares does not provide investment advice. If you are unsure about anything, please seek advice from an authorised financial advisor.
