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Good morning investors! Major names announced earnings yesterday and while most beat, the future isn’t looking too great.

Today we cover:

• US GDP comes out lower than expected

• Microsoft, Snap, Alphabet, and more announce earnings

• Don’t make this financial mistake.

📊 Economy and News 

US GDP grows slower than expected

U.S. economic growth was weaker than anticipated at the beginning of the year, accompanied by a faster rise in prices.

During the January-to-March period, gross domestic product (GDP), expanded at an annualized rate of 1.6% when adjusted for seasonality and inflation.

This figure fell short of economists' expectations of a 2.4% increase, following a 3.4% rise in the fourth quarter of 2023 and 4.9% in the prior period.

Consumer spending grew by 2.5% during the period, a decrease from the 3.3% growth seen in the fourth quarter.

The personal consumption expenditures price index, an important inflation gauge for the Federal Reserve, increased by 3.4% in the quarter, marking its largest gain in a year.

This has investors worried as it puts rate cuts in danger.

Global hits:

• US pending home sales jumped in March, beating expectations by a mile.

• Middle East escalation could trigger oil price shock that fuels inflation, World Bank warns.

• FTC is sued by business groups over its ban on noncompete agreements, which may delay enforcement.

📈 Stocks

S&P 500 5,048.42 (-0.46%)
DJIA 38,085.80 (-0.98%)
NASDAQ 17,430.50 (-0.55%)
BRENT CRUDE 89.35 (+0.73%)
* Prices as of Apr 26th, 12:20 AM UTC

More earnings are here

Some major companies reported earnings today, here’s all you need to know:

• Alphabet beat on earnings and revenue in its first-quarter results. Revenue saw a jump of 15% from a year earlier, the fastest rate of growth since early 2022. Moreover, the company is now ready to pay dividends. Also, it announced a $70 billion buyback. The stock went up 12% after the bell to hit a new 52-week high of $176.

• Microsoft’s fiscal third-quarter results exceeded estimates on the top and bottom lines, but revenue guidance was weaker than expected. The company expects $64 billion in revenue for the fiscal fourth quarter, lower than the $64.5 billion consensus. The company been increasing its capital expenditures to secure Nvidia graphics processing units for training and running AI models. The stock went up 4.5% after the bell to hit $417.

• Intel reported first-quarter earnings that beat expectations for earnings per share, but came up light in sales. The company’s forecast for the quarter is low, sending stock down -8% after the bell.

• Snap reported first-quarter results that beat estimates. Revenue for Snap’s first quarter jumped 21% to $1.19 billion primarily driven by improvements in the company’s advertising platform. The stock went up 25% after the bell to reach $14.

• Comcast posted quarterly earnings and revenue that beat expectations. The company lost more broadband subscribers, but revenue increased due to rate increases. Losses stemming from Peacock weighed on the segment and offset higher revenue.

• Southwest Airlines posted a wider loss for the first quarter than the same period last year blaming Boeing for the problem. Also, it plans to shut down operations at some airports, including in Syracuse, New York; Bellingham International Airport in Washington; Cozumel International Airport; and Houston’s George Bush Intercontinental.

• American Airlines swung to a loss in the first quarter. Its forecast for the current period surpassed analysts’ estimates. Also, it reiterated its full-year earnings forecast.

• Merck reported first-quarter revenue and adjusted earnings that topped expectations mainly due to its blockbuster cancer drug Keytruda and vaccine products. The pharmaceutical giant also raised and narrowed its full-year revenue and adjusted earnings outlooks.

• Deutsche Bank reported 1.275 billion euros ($1.365 billion) in net profit attributable to shareholders in the first quarter, marking a 10% annual increase. Analysts had forecast a net profit result of 1.23 billion euros for the period. Revenue rose 1% year-on-year to 7.8 billion euros, which the bank attributed to growth in commissions and fee income, along with strength in fixed income and currencies.

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💵 Personal Finance

Most middle-income Americans are making this mistake

About 62% of Americans are still living paycheck to paycheck. There are several reasons why this is happening, including some poor financial choices.

One mistake: Most middle-income Americans still earn less than 3% on saving. Furthermore, about 22% of consumers still don't know how much they are earning on savings.

Why is this a mistake? Because there are better options, including higher paying saving accounts out there. In fact, the top 1% average of high-yield savings accounts offer over 5% in the US. If you go abroad, you will find accounts that offer over 10%.

Most middle-income Americans still aren't leveraging higher interest rates for savings.

But why? There are a variety of reasons such as a lack of information and no savings.

What to do then? It is time to rethink how you invest or save money.

Some people do not consider saving accounts or other such options because they do not have enough money saved.

We suggest these tips:

• Put your money. in a savings account but ensure it pays higher than the rate of inflation, which is currently at 3.7%. This means that people earning 3% are actually losing money.

• Compare different savings accounts and pick one that is the most beneficial. Don’t blindly go for the one with the highest interest rate because it might have some drawback. For example, it might have a high minimum or additional charges such as high withdrawal fees.

• You can go for international savings accounts but, for your ease, remember these tips:

  • Pick an account that can be opened and managed online.

  • Choose a USD account so that you do not lose value due to currency fluctuations, or choose a currency that doesn’t fluctuate a lot. For example, the Saudi Riyal and Emirati Dirham.

  • Choose a reliable bank and ensure you enjoy some kind of safety such as a guarantee.

Tip: You might be able to get a higher rate if you deposit money for a long time. We suggest this option because interest rate, at least in the US, is expected to go down in the future. The rate you get today will not be available tomorrow unless you lock it for a few years. However, there are also some drawbacks of this option, i.e.: the inability to withdraw funds as needed. You may have to pay penalties if you withdraw funds before the expiry of your deposit.

Check this video for more on choosing a bank:

💰 Be a Better Investor

👩🏽‍⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.

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