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Tuesday January 18, 2022



Alphabet Releases Earnings Report

Alphabet Inc. (GOOG) reported fourth quarter and full-year earnings on Tuesday, February 2. The company posted increased revenue and net income for the year.

Revenue came in at $56.90 billion for the quarter, up from $46.08 billion during the same quarter last year. For the full year, Alphabet posted revenue of $182.53 billion, up from $161.86 billion during the prior year.

"Our strong results this quarter reflect the helpfulness of our products and services to people and businesses, as well as the accelerating transition to online services and the cloud," said Alphabet and Google CEO Sundar Pichai. "Google succeeds when we help our customers and partners succeed, and we see significant opportunities to forge meaningful partnerships as businesses increasingly look to a digital future."

Alphabet posted net income of $15.23 billion during the quarter, up from $10.67 billion at this time last year. The company's full-year net income was $40.27 billion, up from $34.34 billion for the prior year.

Alphabet, the parent company of Google, showed increased revenue across its many segments. Google Services, which includes products and services such as Google Search, YouTube, Google Maps, Chrome and Android, brought in revenue of $52.87 billion for the quarter, up from $43.20 billion in the previous year. The company's Google Cloud segment, which consists mainly of infrastructure and data analytics platforms, reported revenue of $3.83 billion, up from $2.61 billion during the same quarter last year.

Alphabet Inc. (GOOG) shares ended the week at $2,098.00, up 13.2% for the week.

Amazon Posts Earnings, Inc. (AMZN) reported its latest quarterly and full-year earnings on Tuesday, February 2. The online retail giant continued its strong growth trajectory.

The company's net sales reached $125.6 billion for the quarter. This was up 44% from $87.4 billion in sales last year at this time. Net sales for the full year came in at $386.1 billion, up from $280.5 billion last year.

"If you do it right, a few years after a surprising invention, the new thing has become normal. People yawn," said Amazon CEO Jeff Bezos. "That yawn is the greatest compliment an inventor can receive. When you look at our financial results, what you're actually seeing are the long-run cumulative results of invention."

The company's net income for the quarter was $7.2 billion, up from $3.3 billion at the same time last year. Amazon's net income for the year was $21.3 billion, or $41.83 per share. Last year the company reported net income of $11.6 billion, or $23.01 per share.

Along with the company's earnings release, Amazon announced that CEO Jeff Bezos would be stepping down from the role later this year. Bezos founded in 1994 and oversaw the company's growth from an online bookseller to a retail empire in less than three decades. Current Amazon Web Services CEO Andy Jassy will be taking over as Amazon's CEO while Bezos will assume the title of Executive Chair. (AMZN) shares ended the week at $3,352.15, up 3.4% for the week.

EBay Beats Earnings Expectations

EBay Inc. (EBAY) released its fourth quarter and full-year earnings report on Wednesday, February 3. The company reported an increase in revenue and income.

The company reported quarterly revenue of $2.87 billion, exceeding analysts' estimates of $2.7 billion. This was up from $2.24 billion at the same time last year. For the full year, revenue was up 18.9% to $10.27 billion.

"I am proud eBay was able to be there for our buyers, sellers and community, especially in the face of a global pandemic," said eBay's CEO, Jamie Iannone. "We finished the year with strong financial results, but what inspires me most is the support we've been able to extend to small businesses – providing them with tools, resources and access to millions of buyers globally. We will continue to invest in product and technology in order to deliver the best marketplace in the world for our customers."

The company reported quarterly net income of $0.86 per share, exceeding analysts' estimates of $0.83 per share. This was up from $0.66 per share at the same time last year. Net income for the full year was $2.45 billion, up 25% from $1.96 billion last year.

The company reported 185 million active buyers for the fourth quarter, a 7% increase compared to this time last year. The company's addition of certified refurbished products to the platform proved to be popular among holiday gift shoppers. A new authenticity guarantee service, which helps shoppers verify watch and sneaker purchases, has also driven material growth in these categories. Share values increased around 10% following the earnings release.

EBay Inc. (EBAY) shares ended the week at $62.23, up 9.5% for the week.

The Dow started the week at 30,055 and closed at 31,148 on 2/5. The S&P 500 started the week at 3,731 and closed at 3,887. The NASDAQ started the week at 13,226 and closed at 13,856.

Treasury Yields Tick Upward

Yields on U.S. Treasurys rose this week following slight improvement in the job market. The latest jobs report returned to positive territory following a loss in December.

On Friday, the U.S. Department of Labor released the latest Employment Situation Summary. According to the report, 49,000 nonfarm jobs were added in January, just shy of economists' forecast of 50,000 added jobs. This was a sharp increase from December's adjusted loss of 227,000 jobs. The unemployment rate decreased to 6.3%.

"These data points show that the labor market has softened in the past few months and the need for fiscal stimulus remains high," said Sameer Samana of Wells Fargo Investment Institute. "We continue to believe that Congress will pass another aid package, and along with the broader economic recovery and reopening should support equity markets."

Congress continues to make slow progress toward the passage of the next COVID-19 relief package. Early Friday morning the Senate approved a resolution that would allow the stimulus package to move forward as part of the budget reconciliation process. The resolution now moves to the House of Representatives for approval.

"Republicans expect to offer substantive amendments that attempt to turn what is no stimulus at all in the COVID package into something that really works," said Rep. Kevin Brady. "We are eager to work with the president and the White House on crushing this virus. We think there's a great deal of common ground there."

The 10-year Treasury note yield closed at 1.17% on 2/5, while the 30-year Treasury bond yield was 1.97%.

Mortgage Rates Hold Steady

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, February 4. The report showed interest rates remaining relatively flat for the week.

The 30-year fixed rate mortgage averaged 2.73% this week, remaining at last week's level. Last year at this time, the 30-year fixed rate mortgage averaged 3.45%.

This week, the 15-year fixed rate mortgage averaged 2.21%, up from last week's average of 2.20%. During this time last year, the 15-year fixed rate mortgage averaged 2.97%.

"Mortgage rates remained flat this week and near record lows, signifying an economy that continues to struggle," said Freddie Mac's Chief Economist Sam Khater. "This rate environment is advantageous for those who are looking to refinance in order to strengthen their financial position. While many have already refinanced, the evidence suggests that upper income homeowners have taken advantage of the opportunity more so than lower income homeowners who could stand to benefit the most by lowering their monthly mortgage payment."

Based on published national averages for the week of 2/1, the national savings rate was 0.05%. The one-year CD averaged 0.15%.

Published February 5, 2021

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