The US CPI data for March was unexpectedly high, which lowered investors' expectations for the Federal Reserve to cut interest rates in the short term. The March PCE price index, which is due to be released this Friday, is expected to remain high, which is expected to remain high, which reinforces the market's expectation that interest rate cuts will need to be patient. According to general market forecasts, the PCE index may rise slightly to 2.6% year on year in March due to rising energy costs.
In terms of economic growth, the market expects the annualized annualized value of the US GDP in the first quarter to increase by only 2% compared to the initial quarterly value, which is a sharp slowdown compared to 3.4% in the previous quarter. This shows that under the influence of continued high interest rates, the US economy is beginning to show signs of deceleration. Despite this, the US economy showed some resilience throughout the last year, mainly due to increased consumer spending and local government spending.
Judging from the policy outlook, Federal Reserve officials may need to re-evaluate strategies to combat inflation, because current data shows that progress in fighting inflation has stalled. This could mean that the Federal Reserve will need to keep interest rates high for longer than expected.
This week is also an important earnings week. Many corporate giants will announce their quarterly results, and the market will pay close attention to these reports to assess the health of the economy and all walks of life. These data and reports will have an important impact on market sentiment and policy expectations.
$SAP SE(SAP.US)$ $Cadence Bancorp(CADE.US)$ $Seagate Technology(STX.US)$ $Tesla(TSLA.US)$ $Spotify Technology(SPOT.US)$ $Texas Instruments(TXN.US)$ $Meta Platforms(META.US)$ $ServiceNow(NOW.US)$ $Boeing(BA.US)$ $Microsoft(MSFT.US)$ $Alphabet-A(GOOGL.US)$ $Western Digital(WDC.US)$ $Exxon Mobil(XOM.US)$
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$The Toronto-Dominion Bank(TD.CA)$
Canadian banks
What is the difference between TD and Royal Bank?
$Royal Bank of Canada(RY.CA)$ is up 17% in the last 6 months where TD is down 3%.
For d2d banking most people prefer TD over RBC. TD has more exposure in the USA.
How did TD earnings fall so hard and $RBC CANADIAN BANK YIELD INDEX ETF CAD UNITS(RBNK.CA)$ is consistent?

$Amazon(AMZN.US)$ Rising wages, labor shortages, supply chain bottlenecks leading to extra costs were the name of the game in Q3. This seems like it's a theme that will continue into, and probably beyond, the all-important Q4 holiday season for e-commerce. It will be difficult to pass costs on to consumers during this highly competitive quarter.
On a whole, the numbers were not awful, but they also were not impressive. Total revenue for the quarter was $110.8B, up 15% from Q3 2020 which came in at $96.1B. Costs were up significantly, however, and operating income for the quarter dropped to $4.9B from $6.2B a year ago. Cash from operations was also down from $12B in Q3 2020 to $7.3B in Q3 2021. Inventory, shipping, and labor costs are likely culprits. Diluted earnings per share were chopped in half to $6.12 from $12.37 a year ago.
Taken separately, the ecommerce figures were very discouraging. Product sales were up a mere 4% from Q3 2020. Yes, there is a COVID-19 effect to factor in, however, this is anemic any way one slices it. On a whole, the ecommerce segments of North America and International were net unprofitable for the quarter, losing $31M in operating income. The retail business has never been hugely profitable, however, investors have been hoping that scaling would lead to better profitability. Instead, AWS is the saving grace.
There is a great disparity between the revenue and income produced by AWS as compared to the bulky e-commerce segments.
As shown above, despite taking in only 13% of revenues, AWS was responsible for more than 50% of operating profits for the first two quarters of 2021. AWS as a segment has tremendous margins. This trend has been exacerbated in Q3.
Below I have updated the figures for Q3 2021 and the nine months then ended.
As we can see, the Q3 numbers are skewed as the e-commerce business posted an operating loss. However, this is no less telling. For the first three quarters of 2021, this trend has accelerated from over 50% to now well over 60% of operating profits being provided by AWS. With its impressive growth, the total revenue provided by AWS is also up from 13% to 15%.
It truly is a tale of two companies. However, it should be three.

$Advanced Micro Devices(AMD.US)$on Tuesday reported better-than-expected third-quarter results fueled by data center sales that doubled from the same period a year ago.
After the close of trading AMD said that for the period ending Sept. 25, it eared 73 cents a share, excluding one-time items, on revenue of $4.3 billion, compared with earnings of 41 cents a share, on $2.8 billion in sales, in the third quarter of 2020. The results topped the forecasts of Wall Street analysts, who had forecast AMD to earn 66 cents a share on revenue of $4.11 billion.
AMD Chief Executive Lisa Su said in a statement that in adding to data center sales doubling from a year ago, the company saw particular strength from shipments of the newest version of its Epyc computer processors and business in general "significantly accelerated" during the quarter.
Computing and graphics segment revenue climbed 44% from a year ago, to $2.4 billion, on higher sales of AMD's Ryzen, Radeon and AMD Instinct processor sales. Enterprise, Embedded and Semi-Custom segment revenue totaled $1.9 billion, up 69% from last year's third quarter.
In late September, Su said she sees the component shortage impacting the semiconductor market to ease by next year.

$GlobalFoundries(GFS.US)$ was spun off by $Advanced Micro Devices(AMD.US)$, it is basically a failed unit of AMD that AMD disposed more than a decade ago.
And then AMD uses $Taiwan Semiconductor(TSM.US)$ for chips tells me everything I need to now about GF.

$Coca-Cola(KO.US)$ swings higher after strong FY21 guidance follows a consensus-topping Q3 earnings report.
Organic revenue was up 14% during the quarter, including 8% growth in concentrate sales and 6% growth in price/mix. KO notes that the revenue growth was broad-based with particular strength in markets where coronavirus-related uncertainty is abating. Importantly, volume for Q3 was ahead of the pre-pandemic level seen in 2019.
Coca-Cola gained value share in total nonalcoholic ready-to-drink beverages, which included share gains in both at-home and away-from-home channels.
"While the recovery continues to be asynchronous around the world, we are investing for growth to drive long-term value for the system. Our strong system alignment and networked organization are helping us unlock enormous potential in our brands and across our markets," says CEO James Quincey.
Shares of Coca-Cola are up 2.68% to $55.93 after the earnings topper.

$Tesla(TSLA.US)$Tesla is by far not a bad company, but there could still be trouble ahead. This is due to two key factors - its valuation and its problems when it comes to delivering on growth promises.
Tesla has generated a net profit of $1.86 per share during the third quarter - the highest quarterly profit ever. If we annualize that, we get to EPS of $7.44 - shares trade at around 120x that amount today. That is an absolutely outrageous valuation for an automobile company, but even when we compare Tesla to other high-growth mega-caps such as $Amazon(AMZN.US)$, $Alphabet-C(GOOG.US)$, $Facebook(FB.US)$, $NVIDIA(NVDA.US)$or $Netflix(NFLX.US)$, its valuation is by far the highest in that group. Amazon, the second-most expensive company in that group, trades at roughly half of Tesla's valuation, while others, such as Facebook, trade at less than one-quarter of Tesla's valuation - despite delivering huge growth of around 40% this year as well.
Looking at Tesla's valuation relative to the free cash flow the company generates, the picture worsens further. Tesla has generated around $4 billion in free cash over the last year, which means that shares are valued at a free cash flow multiple of more than 200 right now - which pencils out to a measly free cash flow yield of less than 0.5%. This holds true, surprisingly, despite the fact that Tesla has continued to issue massive amounts of shares. Over the last year alone, the diluted share count has risen by 18 million - which pencils out to a $16 billion increase in the company's market capitalization, all else equal.
Stock-based compensation has totaled around $2.2 billion over the last four quarters, and yet, free cash flow stood at just around $4 billion. Adjusted for SBC, free cash flows would have totaled around $2 billion over the last year, which pencils out to a free cash flow multiple north of 400 - which is way too expensive, I believe.
Tesla bulls oftentimes ascribe a lot of value to future business units, such as Tesla's upcoming entry in the electric pick-up market (Cybertruck), or its self-driving project. Both of these future growth projects are feeling some headwinds, however. Tesla has recently taken the pricing for the Cybertruck off its website, along with some specs:
The reasoning for that has not been publicized, but it seems possible that Tesla is realizing that the truck can't be profitably sold at a price of less than $40,000. Possibly, manufacturing headwinds or commodity price increases will force Tesla to sell the truck at higher prices, which would be a reasonable explanation for why the company has taken pricing information off its website. This, in turn, would worsen the Cybertruck's attractiveness versus competitors' offers, such as   $Ford Motor(F.US)$ F-150 Lightning. The fact that mass production for the Cybertruck has been delayed to late 2023 further pressures the outlook for this model.
Likewise, Tesla has not had too much success with its robo-car approach in recent weeks. Official probes into Tesla's Autopilot, along with a less-than-stellar performance of the latest FSD Beta version threaten the thesis that this will be a huge value driver in the foreseeable future. Some analysts and commenters also believe that the newly-appointed NHTSA Senior Advisor for Safety, Missy Cummings, who is a known Tesla critic, could put more pressure on Tesla and its self-driving claims.
To me, it looks like two of the most important potential growth drivers over the coming years, Tesla's Cybertruck and its self-driving project, are running into headwinds, which could pressure shares in the future, as they are currently priced for perfection.

$Tesla(TSLA.US)$wraps up Monday surging 13%, and topping $1T in market cap, helping the $NASDAQ 100 Index(.NDX.US)$+0.9% overcome weakness in the other megacaps.
Meanwhile, cyclical sectors are the best performers in the $S&P 500 Index(.SPX.US)$+0.5%. The $Dow Jones Industrial Average(.DJI.US)$+0.2% is bringing up the rear.
Consumer Cyclicals make it to the top of the S&P sector gainers list, followed by Energy. Nine of 11 sectors finish higher.
Utilities (-0.4%) are at the bottom.
Tesla's move comes after Morgan Stanley analyst Adam Jonas boosted his price target to $1,200, with the bull case at $1,600 after the company's results.
It also landed the largest EV deal ever with Hertz.
Also among the megacaps, Facebook reports after the bell and investors will be looking to see if it faced the same issues that hit Snap: a change in Apple's iOS and supply chain issues cutting ad spending.
Inflation is still top of mind as the Fed enters its blackout period, with no speakers leading up to the decision on Nov. 3 and economists expecting an asset tapering announcement.
The 10-year Treasury yield is down 2 basis points to 1.63%. Inflation expectations are hitting multiyear highs.
"US Treasury Secretary Yellen was out stressing (again) the temporary nature of inflation," UBS chief economist Paul Donovan writes. "The fact that inflation has been transitory can be seen in a chart of the monthly core inflation change - a spike in the second quarter, followed by normalization."
"While the yearly change gets attention, most consumers cannot remember what they paid a year ago, and the normal nature of the monthly changes may account for the public’s lack of inflation concern."
Trump SPAC DWAC has turned negative, with buyers failing to generate the enthusiasm of last week.