General Body Meeting 10/23: Bloomberg Info Session, Market Update, Q3 Earnings, and Google Antitrust Lawsuit

Neloy Kundu ’23 updated the club on the markets’ performance this week. The S&P 500, the Dow, and the Nasdaq all finished in the red this week. At the time of the meeting the indices were at S&P = 3,457.52, Dow = 28,410.13, and Nasdaq = 11,513.32. Some of the big market movers included Ever Glory, Snap Inc., General Electric, American Airlines, and Apple. Ever Glory stock jumped 126% on the week, while Snap Inc. exploded following a major earnings beat. Apple on the other hand lost roughly 4% as their earnings release approaches on the 29th.

 

Henry Nicosia ’24 provided an update on the ongoing stimulus stalemate in Washington. Despite several road bumps, negotiations are still on between the White House and Speaker Pelosi. Nancy Pelosi said on Thursday that the two sides are getting closer to making a deal but have to get it done by election day on November 3rd. Henry also looked at how the stock market can be used as a way to predict the outcome of Presidential Elections. There are typically two methods that experts look to; one method is predicting a Biden win while the other is predicting a Trump win.  The result of the election will have a significant short-term impact on the market, as many investors are bracing for volatility.

 

Tim Larsen ’22 analyzed the winners and losers of Q3 earnings season. Winners included; Snap, Tesla, Chipotle, Procter & Gamble, Thermo-Fisher, UBS. The losers were; IBM, Intel, Netflix, and Verizon. Meanwhile, Southwest Airlines and AT&T remained neutral. IBM was a major loser after reporting its lowest quarterly revenue since 1997. The beaten-down stock dropped roughly 5% on Tuesday and a total of 8.5% on the week. However, it may not be as bad as it seems, as IBM is in the midst of a restructuring and developing their cloud and AI divisions. Netflix stock also experienced a pullback after they reported a subscription slowdown in Q3. This “slowdown” comes after the massive subscription runup at the beginning of the coronavirus outbreak. The stock had a volatile week, with a high of $550 and a low of $485. Tesla was one of the winners of the week in terms of earnings, as their earnings beat analyst’s estimates. Tesla reported a Q3 revenue of 8.77 Billion, greater than the expected 8.26 Billion. They have been able to cut vehicle prices as competition in the EV market heats up. The stock was still down 5% on the week despite the beat.

 

Marketing Director Jack Evans ’22 broke down the Department of Justice’s antitrust lawsuit against Google. It comes just two weeks after the House committee’s report on big tech’s monopolistic behavior. The lawsuit claims that google prevents its rivals from creating competing search products, with Google controlling about 80% of searches in the United States, and 94% of mobile searches in the U.S. Google also pays billions to Apple to keep them as the default search engine on the iPhone, which accounts for roughly 15% to 20% of Apple’s profits. If any regulations were to eventually come down on Google, Apple would be significantly impacted. This lawsuit is being compared to the Microsoft lawsuit from the 1990s in which Microsoft violated antitrust laws by bundling internet explorer with windows. Google fought back against the lawsuit by saying that people use Google because they want to, not because Google is forcing them to use it. Their argument comes down to the fact that Google is a superior product, and this is why they have such a large market share. Google Shares were up 5% on the week after the news, investors believe that the recent reports are more of a public display and actual enforcement would take years. An anonymous expert from Jefferies called it “more noise than substance.”  and that any sort of action will take years to play out.

 

Co-President Alec Cwienkala ’21 presented Mikias Stewart’s slide on the Boeing 737 Max. “The 737 MAX family is designed to offer the greatest flexibility, reliability, and efficiency in the single-aisle market”. American Airlines is planning to reintroduce Boeing 737 Max jets to service in late December, depending on whether the FAA clears it for safety. The planes were grounded in 2019 after an Ethiopian Airlines crash killed 157 people.

 

Bloomberg Financial Product Analytics & Sales Intern and Campus Ambassador Sasha Thaler ’21 gave the club an insightful info session on her experience as an intern at Bloomberg and upcoming opportunities for Lafayette students. These opportunities are available on Bloomberg’s career page. Thank you for taking the time out of your busy schedule to speak to the club!    

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