Week in Review: Tech Giants, Fed Moves, and Economic Forecasts

Wall Street’s bull run stumbled past week as tech giants’ quarterly earnings triggered a downturn, leading the S&P 500 to fall over 1% and record its first two-week losing streak since August. The mixed results from Alphabet, Microsoft, Meta, Apple, and Amazon created uncertainty, compounded by economic data hinting at continued inflation and a softening labor market. Here’s a breakdown of the major earnings, news events, and market reactions.

Before we dive in, we have a special offer! For a limited time, you can get 70% off Stock Target Advisor’s premium features. Claim your discount here!

Major Earnings Reports

Below are the major earnings reports of past week.

1. Amazon (AMZN):

Amazon’s Q3 report showcased a significant upswing, with revenue reaching $158.9 billion (+11% YoY) and profits up 56% at $15.3 billion. The company’s free cash flow more than doubled, underscoring the strength of Amazon’s diversified business model. Amazon’s strong guidance and cash flow growth fueled investor optimism. The stock surged as analysts praised Amazon’s emphasis on cash flow, viewing it as an indicator of long-term stability.

Learn More: 24 Analysts Update on Amazon!

2. Uber (UBER)

Uber posted $11.2 billion in revenue (+20% YoY) and reached a milestone of $1.1 billion in GAAP operating income. However, slower growth in its Mobility segment concerned investors. Uber’s stock dipped 7% following the earnings release. The market reaction showed investor concerns over the sustainability of Mobility segment growth, though analysts remained cautiously optimistic.

Learn More: Is Uber Technologies Stock a Good Buy for Investors?

3. Robinhood (HOOD):

Robinhood reported $637 million in revenue (+36% YoY), marking a profitable quarter. However, transaction and crypto revenue fell short of expectations. Investor sentiment was mixed due to lower-than-expected transaction revenue. Analysts acknowledged Robinhood’s operational improvements but were wary of its unpredictable revenue streams, especially in the volatile crypto market.

Notable News and Events:

Below are the notable news and events happened last week.

1. Federal Reserve and Economic Indicators:

The Federal Reserve is expected to cut interest rates as inflation pressures ease, following mixed economic indicators. The Q3 GDP estimate showed a 2.8% growth rate, but the labor market is softening, with only 12,000 jobs added in October due to weather disruptions and strikes.

The economic data signals gradual cooling, which supports a potential rate cut from the Fed. However, economists warn that the underlying economic stability may remain fragile, impacted by rising fiscal deficits and the upcoming election.

MicroStrategy’s Massive Fundraising Target:

MicroStrategy announced a $42 billion fundraising goal, aiming to finance further Bitcoin acquisitions. The move follows the company’s recent $3.5 billion raised and aligns with its ambition to position itself as a Bitcoin investment proxy.

MicroStrategy’s plans to raise capital through share sales sparked interest in its stock, which has outperformed Bitcoin. Analysts, however, caution against the high volatility associated with Bitcoin investments.

Warren Buffett’s Cash Reserve Growth:

Berkshire Hathaway’s cash reserves surged to a record $325.2 billion, largely due to Buffett’s strategy of selling shares in companies like Apple and Bank of America while halting share buybacks.

Analysts view Buffett’s strategy as a reflection of economic caution, with concerns about fiscal deficits and potential future tax increases. This approach suggests a “risk-off” sentiment that may signal economic uncertainty in the broader market.

Ready to take your investments to the next level? For a limited time, get 70% off on Stock Target Advisor. Get started here!

Conclusion:

Past week underscored the volatility and mixed sentiment in the markets, with Wall Street reacting sharply to tech earnings and economic indicators. As the Fed considers rate adjustments, and companies like Amazon and Uber navigate growth and profitability pressures, investors are left weighing the economic outlook for Q4.