Today is Friday, October 29, 2021.
Amazon’s “Short-Term” Issues
Shares of Amazon (Nasdaq: AMZN) dropped 3.94% in after-hours trading on Thursday after the company posted disappointing results for the quarter due to what CEO Andy Jassy described as "short term" issues.
Numbers: Amazon reported earnings per share of $6.12 and revenue of $110 billion; both numbers were below expectations.
Bigger Picture: As more consumers go back to physical retail stores, e-commerce stores are losing steam. Amazon expects up to $140 billion in sales in the upcoming quarter, which is lower than what analysts had hoped for.
Quote: "In the fourth quarter, we expect to incur several billion dollars of additional costs in our Consumer business as we manage through labor supply shortages, increased wage costs, global supply chain issues, and increased freight and shipping costs—all while doing whatever it takes to minimize the impact on customers and selling partners this holiday season. It’ll be expensive for us in the short term, but it’s the right prioritization for our customers and partners." - Amazon CEO Andy Jassy.
Half Glass Full: Amazon’s services business continued to shine, with Amazon Web Services (its cloud business) increasing by 39% in the quarter.
Final Thoughts: How will Amazon deal with ongoing union drives, such as the one currently happening in Staten Island?
Notable Earnings Today: ExxonMobile (NYSE: XOM), Abbvie (NYSE: ABBV), Chevron (NYSE: CVX), Royal Caribbean (NYSE: RCL), Phillips 66 (NYSE: PSX).
Notable IPOs Today: HireRight Holdings Corp (NYSE: HRT), Airsculpt Technologies, Inc. (Nasdaq: AIRS), Udemy, Inc. (Nasdaq: UDMY), Sonendo (NYSE: SONX), Biofrontera Inc. Common Stock (Nasdaq: BFRI), Aura Biosciences, Inc. Common Stock (Nasdaq: AURA), LianBio American Depositary Shares (Nasdaq: LIAN), NextNav Inc. Common Stock (Nasdaq: NN).
Notable Equity Crowdfunding Campaigns Ending Today: GOffee (StartEngine), Monkey Wrench Brewing (Honeycomb), Les Gourmands Bakery (MainVest), Rock City ZA (MainVest), LiveWell Assisted Living (truCrowd), Retro Meadrey (MainVest), Joanna’s Premium Tonic Syrups (MainVest), Dragon Den & Dungeon Hall (MainVest), Island Brands (StartEngine).
Notable Economic Events Today: Employment cost index (8:30 a.m. ET), Personal income and personal spending (8:30 a.m. ET), Chicago PMI (9:45 a.m ET), Michigan consumer sentiment (10:00 a.m. ET).
Apple Hit With Chip Shortages
Apple (Nasdaq: AAPL) became the latest tech company to have its earnings challenged by the global semiconductor shortage. Shares of the company tumbled 3.53% in after-hours trading on Thursday.
Numbers: Apple reported earnings of $1.24 per share, which was exactly what analysts predicted. Revenue came in at $83 billion, which was below expectations.
The Bad: Apple’s iPhone revenue was weaker than expected. CEO Tim Cook told CNBC that there were supply constraints and chip shortages. He also said the shortages could potentially linger on.
The Good: Revenue for Apple’s services business was stronger than expected.
Final Thoughts: Apple’s supply problems seem to be temporary. Can Apple post stronger iPhone sales in 2022?
Stocks That Are Defying Supply Chain Woes
While it is true that many stocks have been impacted by recent supply chain issues, some categories of stocks are avoiding most of the direct challenges and might offer protection for investors.
Travel: While the pandemic crushed the travel sector, these companies are not directly impacted by most of the supply chain problems. Plus, many travel stocks are still down due to the pandemic, which means you can buy the dip.
Going International: While it is true that companies with a presence in Asia Pacific are getting hammered by the current supply chain slowdown, that’s not true everywhere. In fact, European-based stocks are fine. The continent seems to be having fewer problems than other places.
Certain Retailers: Yes, many retailers are struggling down due to the supply chain lockdown. But, large retailers such as Walmart (NYSE: WMT) and Home Depot (NYSE: HD) are going strong due to diversification and size. These companies are even charting their own transportation methods to avoid the ports.
Final Thoughts: As last week’s Snap (NYSE: SNAP) earnings showed, any company can get hit by supply chain challenges. But, keep an eye out for the few that are able to thrive.
Trends to Watch
What’s a Meta With This Name: Facebook Changes Corporate Name to Meta (New York Times)
Red Light, Green Light: There’s a ‘Squid Game’ cryptocurrency – and it’s up nearly 2,400% in the last 24 hours (CNBC)
Bad Coffee: Starbucks Q4 revenue, sales miss estimates but loyalty program use soars (Yahoo! Finance)
Deep Dive: 3 reasons why Curve (CRV) price is trending toward a new 1-year high (Cointelegraph)
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