The Long Term Investor

The good news for home buyers that are going to finance with a 30 year mortgage......the current Ten Year Treasury Yield is in the toilet at 2.67%.

SO......where are all the reporters and others that SHOULD now be telling us how GREAT this is for BIG TECH? I guess there is no news market for this since it can NOT be used for FANTASY FEAR MONGERING.

10-year Treasury yield falls after preliminary GDP reading shows negative growth

https://www.cnbc.com/2022/07/28/us-treasury-yields-rise-after-fed-decision-.html

(BOLD is my opinion OR what I consider important content)

"U.S. government debt prices rose on Thursday after the preliminary GDP reading for the second quarter showed an economic contraction.

The yield on the benchmark

slipped by 7 basis points to 2.66%. The 2-year yield fell 9 basis points to 2.879%.


Meanwhile, the 30-year Treasury yield moved lower by 2 basis points to 2.975%. Yields move inversely to prices and one basis point is equal to 0.01%.

Second-quarter GDP slipped 0.9%, the Bureau of Economic Analysis said Thursday. This marked the second-straight negative quarter for GDP, a metric which has historically often coincided with economic downturns.

Though some on Wall Street use two-straight negative quarters of GDP as a shorthand definition for recession, U.S. recessions are officially designated by the National Bureau of Economic Research, which uses a more nuanced definition. Solid job growth during the first half of the year, and impact of high imports on GDP, have led some to speculate that the NBER will not declare a recession during the first two quarters of 2022.

Thursday’s market moves came after the Fed decided to raise interest rates by 75 basis points for a second month in a row to combat high inflation. Chairman Jerome Powell said the central bank will be making rate hike decisions on a meeting-by-meeting basis.

In addition, the Fed also said the U.S. economy is not in recession as “there are just too many areas of the economy that are performing too well.” The comments pushed U.S. stocks higher during Wednesday’s session."

MY COMMENT

BUMMER for cash holders that are looking for a place to stash cash and make some safe money on it. I cant imagine any INDIVIDUAL buying a 30 year Treasury at 2.879%.

 

I suspect that the 11:00 to 12:00 hour on the EAST COAST will set the tone for what the markets are going to do for the day.

Smokie....I did not notice that name....CLASSIC.

 

AND.....as I noted above....right on schedule ab about 11:20 East Cosat time.....the start of the Wall Street lunch hour....the markets suddenly turn green.

 

I got my Honeywell earnings this morning.....a HUGE BEAT.

Honeywell International Inc. (HON) Q2 Earnings and Revenues Surpass Estimates

https://finance.yahoo.com/news/honeywell-international-inc-hon-q2-114511241.html?fr=yhssrp_catchall

(BOLD is my opinion OR what I consider important content)

"Honeywell International Inc. (HON) came out with quarterly earnings of $2.10 per share, beating the Zacks Consensus Estimate of $2.03 per share. This compares to earnings of $2.02 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of 3.45%. A quarter ago, it was expected that this company would post earnings of $1.86 per share when it actually produced earnings of $1.91, delivering a surprise of 2.69%.

Over the last four quarters, the company has surpassed consensus EPS estimates four times.

Honeywell International Inc. , which belongs to the Zacks Diversified Operations industry, posted revenues of $8.95 billion for the quarter ended June 2022, surpassing the Zacks Consensus Estimate by 3.06%. This compares to year-ago revenues of $8.81 billion. The company has topped consensus revenue estimates two times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Honeywell International Inc. Shares have lost about 11.9% since the beginning of the year versus the S&P 500's decline of -15.6%.

What's Next for Honeywell International Inc.

While Honeywell International Inc. Has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Honeywell International Inc. Mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $2.26 on $9.1 billion in revenues for the coming quarter and $8.64 on $35.71 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Diversified Operations is currently in the bottom 35% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Griffon (GFF), another stock in the same industry, has yet to report results for the quarter ended June 2022.

This garage door and building products maker is expected to post quarterly earnings of $0.91 per share in its upcoming report, which represents a year-over-year change of +111.6%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

Griffon's revenues are expected to be $805 million, up 24.5% from the year-ago quarter."

MY COMMENT

This was a BIG BEAT by Honeywell. The stock has held up relatively well this year.....but.....I feel it is not respected by the markets as well as it should be. I like this stock as one of my non-tech anchors for my portfolio.

 

OK.....I looked. with about half the day to go.....EVERY one of my 10 stocks is green. I am not holding my breath. The momentum will either build.....or.....we will see the dreaded LATE DAY FADE. In other words.....WTF do I know.....the short term is IMPOSSIBLE to predict.

 

ANOTHER....great day in the markets today. All 10 of my stocks were green and I made some good money. I also got in a beat on the SP500 by 0.67%.

BONUS.....my year to date is now (-19.70%)......YEA.....I am now out of correction in my account......at least for a brief time.

 

HERE are the good AMAZON earnings.

Amazon jumps after second-quarter revenue tops estimates

https://www.cnbc.com/2022/07/28/amazon-amzn-q2-2022-earnings.html

(BOLD is my opinion OR what I consider important content)

"Key Points

• Amazon reported second-quarter results on Thursday that beat on the top line.
• It also gave upbeat guidance for the third quarter.

Amazon shares climbed more than 10% in extended trading on Thursday after the company reported better-than-expected second-quarter revenue and gave an optimistic outlook.

• EPS: Loss of 20 cents
• Revenue: $121.23 billion vs. $119.09 billion expected, according to Refinitiv

Here’s how other key Amazon segments did during the quarter:

• Amazon Web Services: $19.7 billion vs. $19.56 billion, according to StreetAccount
• Advertising: $8.76 billion vs. $8.65 billion, according to StreetAccount

Revenue growth of 7% in the second quarter topped estimates, bucking the trend among its tech peers, which have all reported disappointing results.

Amazon said it expects to post third-quarter revenue between $125 billion and $130 billion, representing growth of 13% to 17%. Analysts were expecting sales of $126.4 billion, according to Refinitiv."

MY COMMENT

A good report....the only negative is a LOSS of 20cents per share.

The markets liked this report especially the guidance. This could drive the markets to a GREEN finish tomorrow......unless APPLE tanks when they report.

 

HERE is another take on Amazon.

Amazon stock soars nearly 12% after revenue beats expectations

https://finance.yahoo.com/news/amazon-q2-earnings-2022-131434690.html

(BOLD is my opinion OR what I consider important content)

"Amazon (AMZN) reported its financial results after the closing bell on Thursday, beating analysts' expectations on revenue. The stock soared 12% higher in after-market trading.

Here are the most significant numbers from Amazon's earnings today, as compiled by Bloomberg:

• Revenue: $121.2 billion versus $119.53 billion expected
  
• Loss per share: $0.20
  
• Amazon Web Services (AWS) net sales: $19.74 billion actual versus$19.4 billion expected
  

The e-commerce giant also reported better than expected guidance for next quarter of $125 billion to $130 billion versus $126.5 billion. Still, Amazon also reported a net loss of $2 billion, which it ties to its investment in electric vehicle company Rivian.

What's key to Amazon's future

The future of Amazon's cloud business is key to the company's future. The cloud landscape that Amazon's competing in is in flux – Microsoft (MSFT) saw revenue for its cloud computing service, Azure, jump 40% year-over-year when it reported earnings earlier this week.

Fears of recession also could threaten AWS's growth in the medium-term. For instance, analysts at Mizuho Securities — James Lee and Wei Fang — worry that recession fears will cause corporate spending on cloud services to decline in the foreseeable future, a shift that could negatively affect AWS, according to a July 20 note.

The data on a possible recession doesn't look great – the economy contracted for the second straight quarter in Q2, data from the Commerce Department showed Thursday.

It's a dicey time for tech, and earnings season has only continued to bear that out. On Wednesday, Facebook-owner Meta Platforms (META) reported its first-ever year-over-year revenue drop and, earlier this week, both Google parent Alphabet (GOOG, GOOGL) and Microsoft (MSFT) reported earnings that didn't meet Wall Street's expectations. Although both Microsoft and Google particularly have their bright spots, this round of earnings season has been relatively brutal for the tech sector.

Amid the tech rout, Amazon's been in a moment of profound transition internally. CEO Andy Jassy took on the company's top job just last year, while long-serving consumer head Dave Clark recently stepped down to join logistics company Flexport.'

MY COMMENT

A LOSS tied to the electric car business? You know everyone in the world does not have to pretend to be an EV car company. It drives me nuts that all these companies have jumped on the EV car bandwagon when mostly NONE of them have ever manufactured a car. These are unnecessary losses....if companies would just stick to what they do well.

It continues to look like the SP500 earnings are coming in at about 70% BEATS and I would say much better than anticipated.

 

HERE is Apple.

Apple beats on revenue and profit, expects growth to accelerate despite ‘pockets of softness’

https://www.cnbc.com/2022/07/28/apple-aapl-earnings-q3-2022.html

(BOLD is my opinion OR what I consider important content)

"Key Points

• Apple reported fiscal third-quarter earnings on Thursday that beat Wall Street expectations for sales and profit but showed slowing growth for the iPhone maker.
• Apple did not provide formal guidance for the quarter.
• “In terms of an outlook in the aggregate, we expect revenue to accelerate in the September quarter despite seeing some pockets of softness,” Apple CEO Tim Cook told CNBC’s Steve Kovach.

Apple reported fiscal third-quarter earnings on Thursday that beat Wall Street expectations for sales and profit but showed slowing growth for the iPhone maker.

Apple stock rose over 3% in extended trading.

Here are the key numbers compared to what Wall Street was expecting, per Refinitiv estimates:

• EPS: $1.20 vs. $1.16 estimated, down 8% year-over-year
• Revenue: $83 billion vs. $82.81 billion estimated, up 2% year-over-year
• iPhone revenue: $40.67 billion vs. $38.33 billion estimated, up 3% year-over-year
• Services revenue: $19.60 billion vs. $19.70 billion estimated, up 12% year-over-year
• Other Products revenue: $8.08 billion vs. $8.86 billion estimated, down 8% year-over-year
• Mac revenue: $7.38 billion vs. $8.70 billion estimated, down 10% year-over-year
• iPad revenue: $7.22 billion vs. $6.94 billion estimated, down 2% year-over-year
• Gross margin: 43.26% vs. 42.61% estimated

Apple did not provide formal guidance for the quarter. Analysts expected the company to give fourth-quarter guidance of $1.31 in earnings per share and nearly $90 billion in sales.

“In terms of an outlook in the aggregate, we expect revenue to accelerate in the September quarter despite seeing some pockets of softness,” Apple CEO Tim Cook told CNBC’s Steve Kovach.

Apple’s revenue rose 2% during the quarter, compared to 36% growth during the same period last year and over 8% growth in the March quarter. Cook said the results were better than expected and CFO Luca Maestri said it was a “challenging operating environment.”

Chipmakers and other computer vendors have signaled that there is slowing demand for smartphones and PCs around the world as consumers grapple with recession fears and decades-high inflation. Apple’s soft growth may suggest that the consumer electronics industry — including leaders like Apple — is headed for a period of slow or no growth.

Cook told CNBC that the company is seeing inflation but will continue to make investments.

“We do see inflation in our cost structure,” Cook said. “We see it in things like logistics and wages and certain silicon components and we’re still hiring, but we’re doing it on a deliberate basis.”

Apple’s iPhone sales exceeded Wall Street expectations, suggesting that demand for iPhone 13 models remains strong even in the second half of the product’s annual release cycle. Apple typically releases new iPhones in September and sales fall as customers anticipate new models.

Cook said Apple had success attracting Android customers to become iPhone owners during the quarter.

“We had a record level of switchers and saw double digit growth for customers new to iPhone,” Cook said.

The Services business was the fastest growing segment for Apple during the quarter. It includes monthly subscriptions, payment fees, warranties, search licensing fees from Google, and revenue from the iPhone App Store.

Services grew over 12% during the quarter, although that is a decline from the 17% growth it posted in the second quarter, and down from the 27% growth it reported during the same time period last year.

Cook said Apple has 816 million current paid subscriptions, which includes anyone who subscribes to an app sold on the Apple App Store in addition to products such as Apple Music and iCloud.

Mac sales were short of consensus expectations and fell over 10% on a year-over-year basis. Cook said this was due to supply constraints and the strong dollar.

In April, Apple warned that parts shortages would hit revenue by between $4 billion and $8 billion, and Apple’s website showed extended shipping times for many Mac models during the quarter. Cook said the ultimate hit came in under $4 billion.

Apple also announced new MacBook Air models during June that did not start shipping to customers until July. MacBook Air is Apple’s best-selling computer.

Apple’s iPad declined 2% annually, but beat soft Wall Street forecasts, as iPad tablets were one of the product lines analysts believed that Apple might prioritize away from in the face of a chip shortage. Cook said that the iPad decline was also driven by supply constraints and a strong dollar.

Apple’s other products category, which includes headphones like AirPods, Apple Watches, and HomePod speakers declined over 8% on an annual basis and missed Wall Street expectations.

Apple’s business in Greater China, which includes Taiwan and Hong Kong, declined 1% on an annual basis to $14.6 billion. Cook said that result was despite major Covid restrictions that hurt demand.

Apple’s gross margin exceeded the company’s own forecast from April. Apple reported 43.26% in gross margin, over the 42% to 43% range the company suggested earlier this year.

Apple said it spent over $28 billion on share buybacks and dividends during the quarter.

MY COMMENT

Another good report for the tech business Giants. There is much room for improvement as China opens up over the next 3-6 months.