🛒 Costco's Empire Expands

1) Costco’s Empire Continues To Grow, 2) Microsoft Becomes The Most Valuable Company, 3) Goldman Sachs Earnings Rundown, and more!

Author

Carbon Finance
January 16, 2024

It’s Tuesday.

The markets were closed yesterday for Martin Luther King Jr. Day, leading to quieter news over the last few days. However, there were a handful of notable updates.

Some key data bites you should know: 

  • Apple's $AAPL iPhone sales in China fell 30% during the first week of 2024.

  • Hertz $HTZ announced they will sell around 20,000 electric vehicles, or about a third of its EV fleet, in response to slowing EV demand.

  • BlackRock $BLK is set to acquire Global Infrastructure Partners for $12.5B, marking its largest deal since 2009.

  • U.S. Congressional leaders agreed on a $1.6T spending deal for the fiscal year 2024.

  • Citi $C is planning to cut 20,000 jobs, or 10% of its workforce.

In today’s newsletter:

  • 🛒 Costco’s Empire Continues To Grow

  • 🎮 Microsoft Becomes The Most Valuable Company

  • 🏦 Goldman Sachs Earnings Rundown

Let’s dive right in!

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🛒 Costco’s Empire Continues To Grow

Costco is famous for its awesome deals and a wide variety of offerings, and now, it looks like China has caught the Costco fever too.

Their first southern China store in Shenzhen was a hit, with thousands lining up for hours on opening day.

The new location faced overwhelming demand and even required crowd control regulation to be implemented.

Since the first opening of its warehouse in 1983, Costco has grown rapidly, and has since become the top warehouse club globally.

After expanding to Europe in 1993 and Asia in 1999, they now have a whopping 870 warehouses worldwide as of late 2023.

🎮 Microsoft Becomes The Most Valuable Company

Microsoft CEO Satya Nadella had a big reason to celebrate this past weekend.

On Friday, Microsoft surpassed Apple as the world's most valuable public company, thanks to its position in riding the AI software wave.

The company is now valued at $2.89T, surpassing Apple which is currently valued at $2.87T.

Apple has struggled in recently, experiencing four consecutive quarters of year-over-year revenue declines across its product offerings.

To make matters worse, Chinese government and state firms have been increasingly banning foreign devices like iPhones.

This presents a major challenge for the company as China represents 19% of Apple’s revenue.

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🏦 Goldman Sachs Earnings Rundown

The Numbers:

  • Earnings: 🟢 $5.48 Beats $3.62 Est.

  • Revenue: 🟢 $11.32B Beats $10.80B Est.

Analyst estimates from FactSet.

The Quarter:

This morning, Goldman Sachs released its fourth-quarter 2023 earnings results.

Goldman Sachs exceeded expectations with a 51% jump in fourth-quarter earnings to $2.01B and revenue growth driven by asset and wealth management.

CEO David Solomon highlighted asset and wealth management as Goldman's new growth focus, transitioning from previous consumer banking efforts.

Despite solid equity trading results, Goldman's overall performance was mixed, with some divisions underperforming.

Goldman also yielded an 8.1% return on tangle equity, far below below their target range of 15%.

⭕️ Circle IPO. Circle, issuer of the USDC stablecoin, confidentially filed for an IPO, aiming to go public post-SEC review - R

🔐 Bitcoin ETFs Launch. The new Bitcoin ETFs attracted $655M in net inflows on their debut, led by the Bitwise and Fidelity funds - WSJ

🏎️ Musk’s Signal. Tesla's $TSLA CEO Elon Musk signaled interest in building AI and robotics outside of Tesla unless he gains 25% voting power - F

Notable Companies Reporting Earnings This Week:

  • Tuesday (1/16):

    • Morgan Stanley $MS, Goldman Sachs $GS, PNC Financial $PNC, Interactive Brokers $IBKR

  • Wednesday (1/17):

    • Prologis $PLD, Charles Schwab $SCHW, U.S. Bancorp $USB, Kinder Morgan $KMI, Discover Financial $DFS

  • Thursday (1/18):

    • Truist Financial $TFC, Fastenal $FAST, PPG Industries $PPG, M&T Bank $MTB, Birkenstock $BIRK

  • Friday (1/19):

    • Schlumberger $SLB, Travelers Companies $TRV, State Street $STT, Ally Financial $ALLY

All of the companies that are reporting earnings this week can be viewed here.

Major Trades Published Since 1/9. Trades may be those of family members. Buys and sells may be options trades. [Source: 2iQ, Quiver Quant]

Buys:

  • Rick Allen (R)

    • Company: Charles Schwab ($SCHW)

      • Amount Purchased: $50K - $100K

  • Tommy Tuberville (R)

    • Company: Chevron ($CVX)

      • Amount Purchased: $150K - $350K

    • Company: Barrick Gold ($GOLD)

      • Amount Purchased: $66K - $151K

Sells:

  • John Hickenlooper (D)

    • Company: Chipotle Mexican Grill ($CMG)

      • Amount Sold: $100K - $250K

  • Laurel Lee (R)

    • Company: Alibaba ($BABA)

      • Amount Sold: $100K - $250K

  • French Hill (R)

    • Company: Charles Schwab ($SCHW)

      • Amount Sold: $50K - $100K

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