DHUnplugged #651: Resilient Rockem

Markets are moving back and forth just waiting for some big news. Talk of a US default is making the rounds. Tech has a big day - helping to push markets up from their recent despair. PLUS we are now on Spotify and Amazon Music/Podcasts! Click HERE for Show Notes and Links DHUnplugged is now streaming live - with listener chat. Click on link on the right sidebar. Love the Show? Then how about a Donation? Follow John C. Dvorak on Twitter Follow Andrew Horowitz on Twitter Warm Up - All of a sudden - recession fears - US Default whispers - Republicans put forth budget with increase and expense slashing - India - taking over the population race - Resiliency everywhere ... Market Update - Banks - Still on shaky ground - Central Banks blamed for market rally - "This year’s rally in risk assets is more to do with a $1 trillion central bank liquidity injection than any improvement in the economic outlook, according to Citigroup Inc.. " - "That massive tailwind — enough to lop 50 basis points off the investment-grade risk premium — may soon become a huge drag as policymakers get back to quashing inflation, having extinguished the banking-sector fire. " - Do we believe that the Fed is done? Earnings Coca-Cola - Average price of 192 ounces of Coca-Cola's soda (12 pack of 16oz bottle) in the U.S. rose to $9.30 in 2022 from $8.03 in 2021, according to NielsenIQ's data. It stood at $10.55 so far in 2023. (31% increase in 2 years) - Adjusted earnings came in at 68 cents per share, compared with estimates of 64 cents. - The company's first-quarter revenue rose about 5% to $10.98 billion, beating estimates of $10.80 billion IBM Earnings - Bellweather anymore? - IBM Corp missed Wall Street expectations for first-quarter revenue - WHY? Hurt by shrinking corporate spending on IT services and a strong dollar. - IBM cut its full-year consulting revenue growth forecast to 6%-8% from earlier expectations of high single-digit percentage growth. - "We are seeing softness in certain components of our discretionary based offerings in consulting," Chief Financial Officer James Kavanaugh told Reuters about the U.S. market. Whirlpool - Didn't everyone think that margins would compress and higher rates will kill real estate? - Whirlpool prelim Q1 $2.66 vs $2.17 S&P Capital IQ Consensus Estimate; revs $4.65 bln vs $4.50 bln S&P Capital IQ Consensus Estimate - Whirlpool sees FY23 $16.00-18.00 vs $15.97 S&P Capital IQ Consensus Estimate; sees revs $19.4 bln vs $19.02 bln S&P Capital IQ Consensus Estimate Tech - Microsoft beats by $0.22, beats on revs; Azure +31% constant currency growth  (Shares up 6% A/H) ---- Revenue rose 7% to $52.9 billion in the quarter ended March - Windows division  reporting revenue of $13.3 billion versus analyst estimates of $12.19 billion - Alphabet beats by $0.10, beats on revs, Google Advertising revenue essentially flat yr/yr; On April 19, Board of Directors authorized repurchase up to additional $70 bln of Class A and Class C shares PLUS big 70b buyback announcement (Shares slight move A/H) ------- Ad sales saw a drop again - although not as much as last quarter Banks - The bank crisis is not totally over yet -  Earnings and news from First Republic Bank - massive loss of deposits and company looking to some drastic ways to save itself (stock don 49% today) - Pacific West bank - better than expected results, shares up 13% A/H Debt Ceiling - Limits - Republican led plan - McCarthy floated a plan last week that would pair $4.5 trillion in spending cuts with a $1.5 trillion increase in the $31.4 trillion U.S. debt limit. - All talking about this being political divided and will not pass - The HOPE is that it will get sides talking Change of US Default - debt ceiling etc - Current pricing of credit default swaps soar - BUT, only 2% implied odds of a default - Seen this movie before....... - This time different?