Groundhog Day, Earnings Season, Crazy Stock Valuations and Layoffs

Vonetta Logan's weekly recap of the big business, news, markets, political, cultural and viral trending stories featured this week on Daily Dose

What’s up tastynation! Welcome to this week’s edition of Weekly Dose! Each week, I recap the top stories that I covered on Daily Dose. If you missed any eps of Daily Dose you can catch up on them here. 

Good news, everyone! Pull out your booty shorts and your crop tops because a rodent told us spring is arriving early.

There were cheers all around at Gobbler’s Knob (haha I am 12) as Punxsutawney Phil made his 138th appearance. Damn, that groundhog doesn’t look a day over 115. Phil didn’t see his shadow this year, thus portending an early spring. Since January felt like it was already six months long, this is welcome news. 

Let’s get to this week’s recap. 

Earnings curve 

The S&P 500 (SPY) started the week strong, fresh off back-to-back new highs in the previous two weeks. Several mega-cap companies reported earnings this week and it was a wild ride.

According to data from FactSet, Wall Street expects 2024 S&P 500 earnings growth of 12.2%, which has accelerated in recent months and is well above the 10-year average of 8.4%.

Big techs report earnings

Alphabet (GOOGL) posted strong numbers across the board, but analysts weren’t impressed.

In similar hard-to-please fashion, Advanced Micro Devices (AMD) straight up told analysts that it expected to increase its chip forecast by $1.5 billion—and Wall Street shrugged.

Microsoft (MSFT) issued light guidance even though it beat its estimates on both top and bottom lines, to which Wall St made the tech giant wear a sign and ring the bell of shame. So, this blockbuster week of earnings was off to a shaky start.

At the end of the week, Amazon (AMZN), which started the week by breaking up with iRobot (IRBT), posted better-than-expected results, sending shares higher. Y’all, Amazon made $170 billion in revenue last quarter. I gotta stop shopping online.

Apple (AAPL), while getting rave reviews for its Vision Pro headset, did disappoint on meeting analysts' expectations. A 13% decline in iPhone sales in China was no bueno for the stock. Apple CEO Tim Cook did valiantly try to turn things around on the earnings call by just screaming the phrase AI at the top of his lungs for like five minutes.

The definite belle of the ball this week was Meta (META). Meta announced it was issuing its first-ever dividend, 12 years after its IPO. And based on the stock’s surge you’d think Facebook had cured cancer. Fresh from his recent apology tour in front of Congress. Meta CEO Mark Zuckerberg cautioned investors about potential volatility ahead, but the stock ripped 20% higher on Friday. 

Oh, wow! A double upgrade! 

First, let us never forget. We started the week off with a modicum of common sense with a nice lil debate about how crazy valuations have become.

The S&P 500 is currently trading at a trailing price-to-earnings (PE) ratio of about 22, according to recent work from Citi. That lands in the 92nd percentile for the S&P's typical valuation over the last 20 years.

Then, like the Kool-Aid man, Blackrock (BLK), the world’s largest asset manager, came bursting through the wall with fireworks in each hand and a bald eagle on its shoulder. Then, it stole your girl from your table, threw some bills down, saying “always bet on black” leaving you alone and confused.

The firm, which manages $10 trillion in assets, double-upgraded U.S. stocks to "overweight" from "underweight." The market was like America … f**k yeah! And it was off to the races. Tom Sosnoff had a great rant about the Blackrock situation, which you can watch here.

The Fed made a decision on Wednesday, which tamed things a bit. Fed Chair Jerome Powell doesn’t see a rate cut happening in March. I guess he didn’t see his shadow either.

Also on Wednesday, things got a lil spicy in the regional banking sector as New York Community Bancorp (NYCB) reported a surprise loss of $252 million. Hahaha I like how that’s written “well, it was a surprise to us!” So, we could be starting off the new year with another teeny bank panic.

You can buy my children’s book Benny the Bear and the Great Banking Collapse here. The regional banking ETF, KRE (KRE) got soft this week on the bad news. 

Layoffs?! You wanna talk about layoffs? 

First, shout out to Coach Jim Mora for giving one of the best post-game press conferences of all time.

News for American workers started on a positive note this week, as Walmart (WMT) announced new stock equity tiers for the store’s managers. Some managers could pile in $525,000 in total compensation. Excuse me while I go put on a tight skirt and pretend to look lost at my local Walmart.

Then, just when you thought the corporate culling was over, there were a spate of layoff announcements this week:

• United Parcel Service (UPS) announced 12,000 job cuts. Those workers had famously negotiated for an industry-leading pay package over the summer.
• PayPal (PYPL) announced 2,500 job cuts. Also in the payment space,
• Block (SQ), run by the former big bird (Twitter founder) Jack Dorsey announced a 10% reduction of staff.
• Identity management company Okta (OKTA) also announced that it would be cutting 7%, or 400 employees, from its workforce.
• Pandemic darling Zoom (ZM) announced a reduction of 150 jobs.

No wonder Elmo was so traumatized this week. A study, released this week, says that return to office mandates are basically pointless. 

Random chicanery 

These are my favorite funny stories of the week:

• Celebrate the most expensive Super Bowl with these fancy shoes.
• Teach your kid about capitalism with a baby Stanley Cup. 
• Venture capitalists want to hold an “all drugs” olympics. 
• SNL did it first.
• Will Tom Eat It? How much meat is too much meat? 

That’s it for this week! See ya next week! 

Vonetta Logan has more than a decade of markets experience and has been a trader for five years. She is an on-air personality, creative writer and news correspondent at tastylive. Vonetta appears Monday-Friday on Daily Dose and contributes to Luckbox Magazine. @vonettalogan

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