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- 💰 Earnings (Procter & Gamble, Puma, and EA)
💰 Earnings (Procter & Gamble, Puma, and EA)
and govt auctions 20-year Treasury bonds
Good morning investors! Wall Street rose Wednesday, with the S&P 500 hitting a record high midday, as Netflix's strong report (and new targets) followed Trump's AI infrastructure plan.
Don’t forget to check Future Download for more on AI, including Trumps’s newest plans.
Today we cover:
About Treasury bonds
Procter & Gamble beats
Signs it’s time to sell a stock
📊 Economy and News
Government’s auctions 20-year Treasury bonds
The U.S. government’s auction of 20-year Treasury bonds on Wednesday concluded with a yield lower than anticipated, as robust domestic buying offset weaker overall demand. The final yield for the notes stood at 4.900%, slightly below the expected when-issued rate of 4.911%, though it remained significantly higher than the 4.686% yield recorded in the previous auction.
Market dynamics indicated an increase in interest, with the bid-to-cover ratio—a key indicator of demand—rising to 2.75 compared to 2.50 in the prior auction. This improvement underscores growing confidence among domestic investors, who played a pivotal role in the auction's outcome.
The breakdown of participation revealed that dealers accounted for 51.3% of the bids, followed by indirect bidders—such as foreign investors—who secured 35.1%. Direct bidders, which include domestic institutions, represented 13.6% of the auction. These figures highlight the varied sources of demand and the critical role of domestic buyers in mitigating the impact of softer demand from other sectors.
Global hits:
Following Elon Musk, YouTube star MrBeast joins bid to buy TikTok in US. Also, billionaire Frank McCourt is open to a 50% share of TikTok after Trump comments
China's economy grew 5% last year, matching the government's target, but in a lopsided fashion, with many people complaining of worsening living standards.
UBS predicts US 10-year bond yield to hit 4.25% by end-2025
Exciting: DP World says sea freight prices could fall 20% if Red Sea attacks curbed.
Reminder: The Federal Reserve's upcoming policy meeting is expected to be uneventful, with BofA predicting no changes to interest rates.
Would you like more rate cuts? |
About credit cards: The share of credit card holders making minimum payments hit a record 10.75% in Q3 2024, while delinquencies over 30 days rose to 3.52% from 3.21%. Despite the increase, the rate remains far below the 6.8% peak seen during the 2008-09 crisis.
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📈 Stocks
S&P 500 6,086.37 (+0.61%)
DJIA 44,156.73 (+0.30%)
NASDAQ 20,009.34 (+1.28%)
BRENT CRUDE 79.03 (-0.33%)
* Prices as of June 23rd, 12:20 AM UTC
Procter & Gamble Beats Earnings Expectations Amid Strong Demand for Household Staples
Procter & Gamble (P&G) reported quarterly earnings and revenue that surpassed analysts’ expectations, driven by strong demand for household essentials like toilet paper and laundry products. The company’s shares rose 3% in premarket trading following the announcement.
For the quarter ended December 31, P&G reported earnings per share of $1.88, exceeding the $1.86 forecast, with revenue reaching $21.88 billion, above the expected $21.54 billion. Net income climbed to $4.63 billion, up from $3.47 billion a year earlier, while net sales rose 2%, and organic revenue increased by 3%.
Volume growth across segments varied, with baby, feminine, and family care leading at a 4% increase, supported by Charmin, Puffs, and Tampax. However, baby care sales, including Pampers, slightly declined. Grooming products like Gillette razors grew by 2%, driven by innovation, while fabric and home care rose 1%. Healthcare products remained flat, and beauty saw a 1% decline, particularly in Greater China.
The company reaffirmed its fiscal 2025 forecast, projecting core earnings per share of $6.91 to $7.05 and revenue growth of 2% to 4%.
Must check: Puma announced a cost-cutting programme after reporting 2024 net profit below the prior year's level, missing its expectation. Elsewhere, Electronic Arts slashed its full-year guidance for bookings on Wednesday, blaming the shortfall on underperforming games, in particular its soccer franchise..
Good to know: GM recalls over 2,000 Chevrolet Equinox electric vehicles. Also, Stellantis plans on creating 1,500 jobs and reopening a plant in Illinois to build a new midsize pickup truck in 2027.
💵 Personal Finance
Signs it’s time to sell a stock - Part II
Let’s resume yesterday’s topic:
Insider selling
Though not always a sign of something being wrong, insider selling can indicate potential problems and cause a stock to fall.
It shows that the management is not confident about the future of their business. However, inside selling is very common and might be due to other reasons as well.
Here’s an interesting video on the topic:
Legal issues
Legal issues are common but some might indicate long term issues. J&J, for example, was in hot water recently due to the powder related cases. Such issues can cause a stock to sink, hence legal troubles are considered a sell sign.
In addition, you should be careful when the SEC opens an investigation into a company. It implies that the investor has overlooked risks that are existing or emerging. We saw something like this happen to Boeing recently, so be careful.
Failed product launches or clinical trials
Almost all companies have had poor launches, including Microsoft and Apple. A launch event, when received poorly, could indicate trouble in the future and is considered a sell signal.
Similarly, when a company rolls out a clinical trial and that trial fails, that could indicate a serious problem for the company’s investors. This applies to bio-tech companies and should be paid special attention to.
Debt and cash issues
Learn to analyze companies and look at factors such as cash flow and P/E. A balance sheet with negative or little cash flow is a red flag.
A company that has no way to generate cash is a ‘bad’ company. Also, pay attention to debt levels, service charges, and equity. If these factors are low then it’s best to dump the stock.
💰 Be a Better Investor
Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give.”
Resources:
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👩🏽⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.
Disclosures
1 Mode Mobile recently received their ticker reservation with Nasdaq ($MODE), indicating an intent to IPO in the next 24 months. An intent to IPO is no guarantee that an actual IPO will occur.
2 The rankings are based on submitted applications and public company database research, with winners selected based on their fiscal-year revenue growth percentage over a three-year period.
3 A minimum investment of $1,950 is required to receive bonus shares. 100% bonus shares are offered on investments of $9,950+.