In short
WSJ Your Money Briefing - Episode Summary
Episode Title: What’s News in Markets: Nvidia Milestone, Mag 7, Chipotle Suffers Date: November 1, 2023 Host: Francesca Fontana Podcast Description: Personal finance and career checklist focused on news affecting money management.
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Key Highlights
- Market Overview
- General Performance:
- All three major indexes reported gains for the week.
- October saw:
- Dow: +2.5%
- S&P 500: +2.3%
- NASDAQ: +4.7%
- The Dow and S&P 500 have risen for six consecutive months, while NASDAQ has increased for seven months.
- Nvidia's Milestone Achievement
- Became the first $5 trillion company.
- Contextual Growth:
- Reached its first trillion-dollar market value in June 2023.
- Achieved $2 trillion and $3 trillion within the same year.
- It took only 78 days for Nvidia to move from $4 trillion to $5 trillion.
- Comparison with Other Companies:
- Nvidia’s market cap exceeds the combined value of:
- Qualcomm
- AMD
- Arm Holdings
- ASML
- Broadcom
- Intel
- LAM Research
- Micron Technology
- Taiwan Semiconductor
- Earnings Reports from Magnificent Seven
- Companies Discussed:
- Meta
- Alphabet (Google)
- Microsoft
- Amazon
- Earnings Highlights:
- Meta:
- Announced increased AI spending leading to an 11% stock drop on Thursday.
- Alphabet:
- Positive AI spending plans and revenue growth in advertising/cloud computing resulted in a 2.4% stock rise.
- Microsoft:
- Surpassed $4 trillion valuation with better-than-expected sales but incurred a 3.1 billion charge from its OpenAI investment, leading to a 2.9% stock drop.
- Amazon:
- Reported a 13% revenue increase, largely driven by AI, resulting in nearly a 10% stock rise on Friday.
- Weekly Stock Movements:
- Losers:
- Meta: -12%
- Microsoft: -1%
- Winners:
- Alphabet: +8.2%
- Amazon: +8.9%
- Chipotle's Decline
- Demand Issues:
- Chipotle reported lower demand from younger and low-income consumers, which significantly affects sales.
- Customers with incomes below $100,000 make up about 40% of sales.
- Factors Contributing to Decline:
- Inflation
- Unemployment
- Slower wage growth
- Stock Impact:
- Shares dropped 18% on Thursday and were down 23% for the week.
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Conclusion This episode provides critical insights into the recent performance of major tech stocks, particularly highlighting Nvidia's unprecedented growth and contrasting it with the struggles faced by companies like Chipotle. The discussions around earnings reports reflect broader economic trends that influence consumer behavior and market dynamics.
For more detailed analysis of stock movements, listeners are encouraged to check out Francesca Fontana's column, "The Score," in the Wall Street Journal's Exchange section.
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Additional Information
- Subscribe: Sign up for the WSJ's free Markets A.M. newsletter for daily updates.
- Production Credits: Produced by Zoe Colkin, Deputy Editor Chris Sinsley.
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End of Summary Have a great weekend, and more insights will be available next Saturday!
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Transcript
Automatic transcript. May contain errors.0:00Hey, listeners. Your money briefing is on a break, but we'll be back with more personal finance information for you in the future. Until then, here's the news moving markets this week.
0:13Hey, listeners. It's Saturday, November 1st. I'm Francesca Fontana for The Wall Street Journal, and this is What's News in Markets, our look at the biggest stock moves of the week and the news that drove them. Let's get to it. Happy day after Halloween to you all, if that's your thing. Halloween is in fact my thing. I love it. And I'm currently speaking to you dressed as Special Agent Dale Cooper of Twin Peaks fame. This isn't a video podcast, so I figured I should let you know. In any case, markets were on a run this week as investors digested more earnings reports and as some big companies notched big new milestones.
0:55The biggest? NVIDIA. The AI chip leader became a$5 trillion company. But more on that in a second. Yes, looking back at the month, October was of all the one for the stock market. But it ended on a high note. For the week, all three indexes notched gains. And for the month of October, the Dow gained 2.5 percent, the S &P 500 added 2.3 percent, and the NASDAQ jumped 4.7 percent. That means the Dow and the S &P are both up for six straight months, and the Nasdaq is up for seven.
1:36So back to NVIDIA. Just how big has NVIDIA gotten? Yes, we know it's now worth$5 trillion as of Wednesday, but I wanted to give some context and perspective on the scale of its meteoric rise in the AI boom. First of all, let's not forget that it hit its first trillion market value in June of 2023, so not that long ago. It notched the 2 trillion and 3 trillion milestones last year, and it was just in July of this year that it hit$4 trillion. I checked with Dow Jones market data, and would you believe it took NVIDIA just 78 days of trading to go from$4 trillion to$5 trillion. And just how large is a$5 trillion chipmaker compared to the rest of the industry?
2:25Well, buckle up, because this list is a mouthful. As of Wednesday, NVIDIA was larger than the following combined. Qualcomm, AMD, Arm Holdings, ASML, Broadcom, Intel, LAM Research, Micron Technology, and Taiwan Semiconductor. So how did NVIDIA close out this week, and this month for that matter? Well, after gaining 3 % on Wednesday, the stock notched a weekly gain of 8.7%. And it was up 8.5 % for October.
3:07Now we're sticking with tech for a little longer because this week we got five of the magnificent seven tech companies posting earnings. We're going to be talking about four of them. Meta, Alphabet, Microsoft, and Amazon. All right, quick hits. Meta, maker of Facebook, said it would aggressively raise AI spending, sending the stock down 11 % on Thursday. Meanwhile, investors cheered Google parent Alphabet's AI spending plans, which accompanied a jump in advertising and cloud computing revenue, and Alphabet's shares added 2.4%. Microsoft, which not for nothing hit a$4 trillion valuation this week, posted better-than-expected sales, boosted its, say it with me, AI spending, and took a$3.1 billion charge from its investment in OpenAI.
3:57Its shares fell 2.9%. Finally, Amazon posted a 13 % revenue jump and strong cloud sales driven by AI. Amazon shares jumped nearly 10 % on Friday. On the week, Meta was the biggest loser, notching a 12 % decline, while Microsoft fell roughly 1%. Of the weekly winners, Alphabet gained 8.2%, and Amazon rose 8.9%. Let's switch focus now to burritos. Apparently, fast casual diners are losing their appetite for Chipotle. The restaurant chain on Wednesday warned of lower demand from younger and low-income consumers, which are key demographics for spots like Chipotle. Customers with household incomes below$100 ,000 make up some 40 % of its sales.
4:52Why is demand from these groups down? According to CEO Scott Boatwright, their spending is getting weighed down by inflation, unemployment, and slower wage growth. Chipotle shares sank 18 % on Thursday, and were down a whopping 23 % for the week. And now you know what's news in markets this week. You can read about more stocks that moved on the week's news in The Score, my column in the Wall Street Journal's Exchange section. Today's show was produced by Zoe Colkin with Deputy Editor Chris Sinsley. I'm Francesca Fontana. Have a great weekend, and I'll see you next Saturday. Thank you.
From the publisher
How did Nvidia close out the week after becoming the first $5 trillion company? And how did increased AI spending affect the members of the Magnificent Seven that reported earnings this week? Plus, what’s causing lower demand for fast-casual dining spots like Chipotle? Host Francesca Fontana discusses the biggest stock moves of the week and the news that drove them.
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