The earnings march continues.
As earnings season progresses, investors have more information to consider every day. Toyota, IBM
Wednesday’s earnings were highlighted by and Levi Strauss, while several others, including Comcast before the bell and Intel after the market closed, were released on Thursday. Meanwhile, U.S. stock markets are coming off of a mixed day. After losing more than 400 points earlier in the session, the Dow barely managed to gain. The Nasdaq and S&P 500 both decreased marginally.
2. Time for GDP
Additionally, the fourth quarter gross domestic product report will be closely watched by investors. GDP decreased from 3.2% in the third quarter to 2.9% on an annualized basis. The Dow Jones survey of economists reported a 2.8% increase in GDP. Economists and market observers are searching for hints as to how the economy will perform this year. Although some people think the U.S. will avoid such a downturn in 2023, talk of a recession is growing. Additionally, if a recession occurs this year, it might be brief because consumers have stayed resilient in the face of inflation and the labor market is still robust.
3. A pleasant bump for Tesla
After the market leader in electric vehicles reported quarterly results that exceeded Wall Street’s expectations, Tesla shares increased. In the meantime, margins declined to their lowest level in five quarters as a result of price reductions and cost-cutting measures. Nevertheless, the key question for Tesla was whether it could withstand a decline in demand for its automobiles, particularly as rivals release more of their own EVs on the market. In an effort to boost demand, Tesla reduced the pricing of a number of its vehicles late last year and early this month. So far, it appears to be working. “So far in January, we’ve had the strongest year-to-date orders in all of our records. Right now, orders are coming in at approximately twice the rate of production.
4. Slow smartphone shipments
According to IDC, a market research company, smartphone shipments decreased globally during the quarter that included the holiday shopping season. The number of smartphones shipped by businesses decreased by an average of 18.3% from the same quarter in 2021. 1.21 billion smartphones were shipped by businesses for the entire year, which is the fewest since 2013. “Shipments during the holiday quarter have never been fewer than in the preceding quarter. Vendors, however, dramatically reduced their shipments as a result of low demand and high inventory, according to Nabila Popal, research director for IDC. Despite seeing a dip in its own smartphone shipments, Apple remained the leading manufacturer.
5. The CEO of Toyota will resign.
The company’s CEO, Akio Toyoda, the grandson of Toyota’s founder, will leave his position on April 1. Koji Sato, the head of the company’s branding, will take over as CEO, and he will become chairman. Toyoda has spent a significant portion of his time as the head of the automotive behemoth justifying his decision to not completely embrace electric vehicles, claiming that it won’t be as simple to convert the auto market to entirely EVs as rapidly as some of Toyota’s competitors anticipate. Toyoda gave a harsh assessment of his time in his departure statement. In hindsight, he admitted, “these 13 years have been a period of battling to survive one day after the other.”