On Monday disappointing quarterly results from Caterpillar as well as Nvidia, fueled fears of a global slowdown, particularly with China. The Dow Industrials fell 208 points and the Nasdaq Composite declined 1.1%.
On Tuesday the Case-Shiller home price index for November rose .3% and consumer confidence for January had a sharp drop of 8.1 points to 120, blamed in part on the government shutdown. The U.S. Department of Justice filed criminal charges against a high-level executive of the Chinese tech firm Huawei, stoking fears that this will make upcoming trade negotiations more difficult with China. Markets ended the day mixed.
On Wednesday the ADP employment report for January came in higher than expected at 213,000 and the EIA petroleum status report for the week ending January 25th saw crude oil inventory rise 900,000 barrels. The Federal Reserve ended their meeting and kept interest rates the same. They still plan on continuing to periodically roll bonds off their balance sheet, however, their announcement was a bit more dovish, lowering inflationary pressures to muted and describing economic activity as solid. The Fed also dropped language that more rate hikes would be needed. Markets soared on the news with the Dow Industrials finishing up 435 points and the Nasdaq Composite gaining 2.2%.
On Thursday jobless claims for the week ending January 26th rose 53,000 to 253,000, partly due to furloughed Federal employees. The employment cost index for last year’s fourth quarter saw total employee compensation costs rise .7% and new home sales for November jumped 16.9% to an annualized 657,000 units. President Trump also told reporters that trade negotiations with China were going well and he hoped to have a deal before the March deadline. The Dow Industrials closed flat, however, the Nasdaq Composite rose almost 1.4%.
On Friday nonfarm payrolls for January surged 304,000, much higher than expectations, and the unemployment rate ticked up .1% to 4%. Average hourly earnings rose .1%. The Dow Industrials opened higher on the news, but other indexes didn’t move as much. Now let’s take a look at some stocks.
Nvidia Corporation (NASDAQ: NVDA) shares plummeted by 17% on Monday after the chipmaker slashed its fourth-quarter guidance. For the upcoming quarter, Nvidia expects revenue of $2.2 billion compared to its previous guidance of $2.7 billion. The Company noted various factors contributing to the decline such as weakness in certain business segments, excess inventory, and declining macroeconomic conditions specifically in China.
Advanced Micro Devices, Inc. (NASDAQ: AMD) reported its fourth quarter financial results on Tuesday, delivering mixed results. The chipmaker reported earnings of 8 cents per share on revenue of $1.4 billion. AMD’s earnings fell in line with expectations, but revenue fell short of estimates.
Apple Inc. (NASDAQ: AAPL) reported its first quarter financial results after market close on Tuesday. The smartphone maker topped both earnings and revenue estimates but missed iPhone revenue expectations due to a steep decline in China. For the quarter, Apple reported earnings of $4.18 per share on revenue of $84.3 billion. iPhone sales decreased by 15% year-over-year to almost $52 billion.
Facebook Inc. (NASDAQ: FB) reported its fourth quarter financial results after market close on Wednesday with earnings of $2.38 per share on revenue of $16.9 billion, crushing estimates. The company reported daily active users of 1.52 billion and monthly active users of 2.32 billion, both increasing 9% year-over-year and matching analysts’ expectations. Average revenue per user increased by 19% to $7.37. The tech giant saw its shares surge over 10% during extended trading hours on Wednesday.
Amazon.com, Inc. (NASDAQ: AMZN) reported its fourth quarter financial results after market close on Thursday with earnings of $6.04 per share on revenue of $72.4 billion. Despite beating estimates for both earnings and revenue, Amazon shares fell by 2% during extended trading hours after providing weaker guidance for next quarter.