Consumer Confidence & AMD/Sherwin Williams Earnings

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Consumer confidence comes in at 100.9, which is a miss on expectations and about 1% lower than the prior month.

The board noted, “Consumers’ assessment of current conditions improved while expectations declined, driven primarily by a softening in the short-term outlook for jobs. There is little to suggest that consumers foresee the economy gaining momentum in the final months of 2020, especially with COVID-19 cases on the rise and unemployment still high.”

Given the uncertainty in the near term, this should come as no surprise. I think we should expect a softening in the data at least for the next few months.

This week is a chaotic one for earnings. Time permitting I will try to post updates on all the stocks that I currently own. The schedule for this week is:

  • Tuesday – AMD, Dexcom, Microsoft, Sherwin Williams
  • Wednesday – ETSY, Mastercard, Service Now, Teladoc, Visa
  • Thursday – Google, Amazon, Apple, Church & Dwight, Facebook, Shopify

AMD easily beat Wall Street estimates on both revenues and earnings, reporting 56% growth in revenues, and 125% growth in earnings for the quarter. It’s the 4th straight quarter of +25% revenue growth for the company, and they also raised their forward guidance. Gross, Operating, and profit margins all showed year over year improvements as well. The company raised its forward guidance and also announced they were buying XILINX for $35 billion.

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AMD is just crushing it on all levels while Intel struggles. Intel’s manufacturing issues bled into their data center business in the most recent quarter. I’m not willing to write them off just yet, but I’m not going to wait on them either. Hope isn’t an investment strategy. I’m long Nvidia (NVDA) and AMD with no plans to sell.

The above chart shows the stock performance for the last 100 trading days. AMD (blue line) has almost tripled off the March lows and is up 54% in the last 100 days, Nvidia (red line) is up 47% in that same time span, while Intel (green line) is down 27%. The market got it right. Intel (INTC) has now failed to outperform the S&P on the 3, 5, 10, 15 year time horizon.

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