🙅‍♂️Apple is buying it back

and labor and job reports

Good morning investors! The market closed higher yesterday as sentiment is again turning positive.

Today we cover:

  • The job report is coming.

  • Apple has big plans.

  • More earnings.

Also, don’t forget you can still catch the replay of the “How to Retire” webinar for the next two days, after which it will only be accessible to Pro members.

Watch the trailer to see what it’s about and get the replay here.

Some of the comments from last night:

Thank you very much! This was a great information session. 😃 “

Thank you for this informative presentation! This is useful - hope they were teaching this to our kids.

📊 Economy and News 

Prepare for today’s job report

Nonfarm payrolls are expected to show a gain of 240,000 for the month, according to the Dow Jones consensus that also sees the unemployment rate holding steady at 3.8%.

The labor market has been full of surprises this year, topping Wall Street estimates at a time when many economists expected hiring to have slowed down.

Markets also will be closely watching the wage numbers.

Consensus estimates put average hourly earnings growth at 0.3% on the month, near the March move, and the yearly increase at 4%, or just below the 4.1% the month before. However, we think the wage numbers could be distorted by immigration patterns as well as California's minimum wage increase this year to $16 an hour.

Global hits:

Labor market: Latest reports showed a 2.90% year-over-year increase in labor productivity for the first quarter, the strongest annual gain in three years. However, unit labor costs climbed at a 4.70% annualized rate.

These trends, alongside historically low initial and continuing jobless claims, suggest a strong but gradually weakening labor market.

📈 Stocks

S&P 500 5,064.20 (+0.91%)
DJIA 38,225.66 (+0.85%)
NASDAQ 17,541.54 (+1.29%)
BRENT CRUDE 83.96 (-0.01%)
* Prices as of May 3rd, 12:20 AM UTC

Apple announces earnings and large buyback

Apple's fiscal second-quarter earnings were slightly higher than Wall Street expectations, but showed overall revenue down 4%, mainly due to iPhone sales falling 10%. 

The iPhone maker announced that its board had authorized $110 billion in share repurchases, the largest in company history.

Apple CEO Tim Cook said that quarterly sales suffered from a difficult comparison to the year-earlier period.

iPhone sales dropped by 10% year-over-year, driven by an 8% decline in Greater China to $16.37 billion, surpassing analyst expectations.

Japan and the rest of the Asia Pacific market also experienced year-over-year sales declines, while the Americas saw a marginal decrease and Europe a slight increase.

Although the company did not issue formal guidance, CEO Tim Cook stated that overall sales would grow in the "low single digits" in the next quarter, potentially exceeding analyst estimates.

Also, Apple will make big announcements at its iPad product event next week and its Worldwide Developers Conference in June.

More earnings:

  • Block reported first-quarter earnings after the bell that beat analysts' estimates. The company reported $5.96 billion in revenue, vs. $5.82 billion expected. Block, formerly known as Square, ended the year with 57 million monthly transacting actives for Cash App in March, up 6% year over year.

  • Coinbase reported better-than-expected revenue in its first-quarter results after the bell on Thursday. The cryptocurrency exchange, the largest platform in the U.S. for buying and selling tokens, reported $1.64 billion in revenue vs. $1.34 billion expected. The shares are up roughly 30% this year after soaring almost fivefold in 2023 alongside a steep rally in the price of bitcoin.

  • Shares of Carvana popped more than 30% during after-hours trading Wednesday after the used car retailer reported record results and turned a profit during the first quarter. The company’s gross profit per unit, or GPU, which is closely watched by investors, was $6,432. Carvana’s adjusted EBITDA profit margin for the quarter was 7.7%. The results follow a major restructuring over the past two years to focus on profitability rather than growth after bankruptcy concerns in 2022.

  • Moderna posted a narrower-than-expected loss for the first quarter as the company’s cost-cutting efforts took hold and sales of its Covid vaccine topped estimates. The results come as Moderna inches closer to having another product on the market, which it badly needs as demand for its Covid shots plunges worldwide. The company reiterated its full-year 2024 sales guidance of roughly $4 billion, which includes revenue from the expected launch of its RSV vaccine.

  • Wayfair’s sales fell in the first quarter, but the furniture retailer narrowed its losses by more than $100 million after cutting 13% of its staff. The home goods company beat Wall Street’s expectations on the top and bottom lines and also saw active customers grow nearly 3% compared with the year-ago period. Like some of its other digitally native peers, Wayfair has implemented a series of layoffs after it saw sales boom during the pandemic and then shrink. 

  • Zillow dropped -5% after its second-quarter revenue guidance fell below analyst expectations. The stock, along with its peers, was weighed down by consistently high mortgage rates, low existing inventory, and concerns over the impact of the recent National Association of Realtors' settlement.

Also check: Paramount Global surged +13% following a letter from Sony and Apollo expressing interest in acquiring the company for $26 billion, as its exclusivity period with Skydance Media approaches its conclusion..

💵 Personal Finance

Most expensive US cities

Creditnews Research published a list of top 10 most unaffordable cities in the US.

Here's the list:

  1. Los Angeles

  2. St. Louis

  3. Boston

  4. San Jose

  5. San Diego

  6. San Francisco

  7. New York City

  8. Miami

  9. Nashville

  10. Richmond

This list is based on cities with the highest number of ‘unaffordable’ neighbourhoods with LA topping the charts.

The median household income in Los Angeles was $83,411 in 2022. This is about $150,000 less than the household income ( $237,281) needed to afford an average monthly mortgage of $5,932 in LA.

On the other hand, St. Louis has a diverse economy. The city is home to major companies and research universities, yet 100% of the Mound City was unaffordable for the average family in 2024.

The average home in the city costs $174,341, up 6.1% over the past year.

Boston, Massachusetts came in at no. 3 on the list with 100% of the city's neighborhoods out of reach for the average married couple.

"What we're seeing is people holding on to their homes, making the supply of available homes very low, and that affects affordability," said the report.

But, there’s some good news too. For example, cities in the Midwest, Rust Belt, and parts of the South still have plenty of affordability.

Cleveland, Ohio, and Memphis, Tennessee, had 0% of unaffordable neighborhoods for the average married couple.

Also, some reports say that living in an expensive city could make you rich. However, if you’re struggling then it’s usually best to look elsewhere.

💰 Be a Better Investor

“If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.”

Peter Lynch

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