Tech Earnings Update

Market Overview
Read time 0.8 minutes

Year To Date Performances:

1. Key Tech Earnings:

   1. Apple reported better-than-expected earnings in Q3, surpassing both revenue and profit estimates. However, the company's overall revenue declined for the third consecutive quarter due to weak demand for phones, computers, and tablets. Sales were down in most categories except for Services and Other Products, which saw modest growth. While Apple does not offer specific guidance, it hinted that Q4 sales would be similar to the previous quarter, suggesting a 1% year-over-year revenue decline. Nevertheless, the company expects iPhone sales, its primary revenue driver, to improve in the next quarter, providing optimism for the future.

   2. Last quarter, Amazon exceeded expectations by significantly increasing its profits through cost-cutting and operational improvements. Their earnings beat Wall Street's estimates by nearly doubling the projected profits. Additionally, their revenue rose 11% compared to the previous year, marking the first time they achieved double-digit growth in 6 quarters. However, their Amazon Web Services (AWS) division, which usually accounts for 70% of their operating profits, experienced slower growth with a 12% increase in sales, the slowest in its history.

2. In July, the US manufacturing sector experienced a contraction, as surveys from S&P Global and ISM indicated. The S&P Global survey remained unchanged from the previous month, while the ISM survey showed a smaller-than-expected increase but has been below the expansion threshold (50) since August 2022. Notably, new orders, employment, and prices continued to show contraction in the manufacturing industry. Additionally, four out of five regional manufacturing surveys reported declining activity and new orders in July, further supporting the overall contraction trend in the sector. These findings suggest that the US manufacturing sector is still facing challenges and has not fully recovered.

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4. Headlines

   1. Data shows that as ChatGPT gains more data points, it’s getting worse at basic functions like doing math.

   2. 40% of companies in the Russell 2000 have negative earnings.

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