Brazil, results from $GOOG, $MSFT, $AMZN, index declines, the AI sector and the Fed... well, we’ve had a truly eventful week in the stock markets.
It’s easy to get lost in all of this. Let’s sum it up:
Monday: A Brazilian crash unlike anything the market had seen since 1998 President Lula beat Flávio Bolsonaro in the second round, winning 51.8% to 48.2%. The market and betting sites had expected exactly the opposite.
After the first round, which Bolsonaro won, the Bovespa index jumped almost 8% in a single day. But that didn’t happen on Monday. The Bovespa index fell as much as 17%, its biggest drop since 1998, and the São Paulo stock exchange halted trading for the first time since the pandemic.
The Brazilian real weakened against the dollar by as much as 12%, shares of $NU fell 23% and $MELI dropped 13%.
Tuesday: “a quiet day”
US stock markets rose as if nothing were happening.
Wednesday: The Fed held rates steady; results from $GOOG and $MSFT.
The Fed kept rates in the 3.75% to 4% range, after raising them in September for the first time in more than 3 years. The decision was not unanimous, however, as 2 members wanted to raise rates now, and inflation remains elevated. Fed Chair Kevin Warsh admitted that higher rates are already affecting the construction of AI infrastructure. The 10-year Treasury yield, however, fell below 5%.
AI giants: the market is punishing those without cash
Microsoft $MSFT rose about 4% immediately after the market closed. Azure accelerated to 48%, and the company still has positive free cash flow.
Alphabet $GOOG fell about 10%, suffering its worst day in more than 20 years, despite Google Cloud growing by 103%. The reasons were negative cash flow, rising debt and slowing search growth.
Thursday: more results
Amazon $AMZN lost as much as 10% due to weaker advertising and free cash flow of -42 billion dollars over the past year, despite AWS recording its fastest growth in 5 years. But in Friday’s session, it subsequently recovered a significant part of that drop.
Intel $INTC fell more than 20% due to a weak Q4 outlook.
Friday: a broad sell-off Friday’s session brought the indexes to their lowest levels of October, sealing a down month.
The S&P 500 index lost 1.8%, its biggest drop since June, and the Nasdaq fell 2.9%. For the week, the S&P 500 lost 0.6% and the Dow Jones 0.9%.
Index malých firem Russell 2000, můžete sledovat přes ETF $IWM, naopak přidal 1,3 %. Peníze z velkých technologií neutíkají z trhu, ale přesouvají se jinam. Dařilo se totiž i dividendovým a stabilním akciím jako je $WM nebo třeba $MCD, který je ode dna nahoře už o 12,5 %, takže nákup se vyplatil
What’s ahead
Next week brings US congressional elections and results from Apple $AAPL (note that this time it’s on Monday; I’m not sure if that’s ever happened before), AMD $AMD and Palantir $PLTR.
So, did you use this month/week to buy?
