—— Apple May Post Two Straight Revenue Declines; Banks Advise “Take Profits”; Ford Misses by $2B, Shares Drop; U.S. Job Gains Surprise to the Upside; Google Invests $300M in AI Startup; FTC Prepares Antitrust Case Against Amazon; Kitty Litter Becomes Surprise Clorox Star
1. Apple May Post Two Straight Revenue Declines
According to Apple’s latest earnings report released Thursday, revenue fell 5.5% to $117.2 billion in the quarter ending December, missing Wall Street’s forecast of $121 billion. It marked the company’s first revenue decline since 2019.
Apple shares were down about 3% in premarket trading.
In the past quarter, iPhones and Mac computers were among Apple’s weaker performers due to declining demand. In addition, production disruptions in China caused order fulfillment delays. New Mac and HomePod products were launched only recently, missing the critical holiday sales window.
Apple CEO Tim Cook said on a conference call that the world is still facing unprecedented challenges—such as the Russia–Ukraine war, lingering pandemic effects, and severe inflation—but the company will continue to operate consistently no matter the obstacles.
Apple expects another 5% revenue decline in the current quarter, though iPhone and services revenue may grow.
As a long-time market bellwether, Apple’s stock movement often leads broader market trends.
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2. Banks Advise “Take Profits”
Bank of America strategist Michael Hartnett wrote that the recent rally in U.S. equities may be overdone, warning that the economy could still fall into recession in the second half of the year, and inflation may resurge.
According to EPFR Global data, $44.7 billion flowed into global equities over the past month. Falling inflation, China’s reopening, and a slower pace of Fed rate hikes have made investors overly complacent.
Hartnett recommends reducing risk once the S&P 500 reaches 4,200 points.
Michael Wilson of Morgan Stanley and Marko Kolanovic of JPMorgan expressed similar views and advised against chasing the rally.
Strategists believe the market’s surge runs counter to Fed policy, and urge investors to “take profits.”
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3. Ford Misses by $2B, Shares Drop
On Thursday, Ford Motor Company reported earnings per share of $0.51, missing analyst expectations of $0.62. EBIT came in at $2.6 billion, falling short of the $3.45 billion consensus.
Ford’s stock dropped as much as 8.4% in premarket trading, though it remains up 23% year to date.
CEO Jim Farley said the company could have earned an additional $2 billion last year, calling the performance “frustrating.” He vowed to improve execution and management in 2023.
Ford remains heavily reliant on its F-series pickups and Bronco SUVs to drive sales and fund its transition to electric vehicles.
This year, CFO John Lawler said Ford will focus on cutting costs and aims to restructure by 2025 to save over $3 billion annually.
CEO Farley previously announced a $5 billion investment to accelerate Ford’s EV transition.
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4. U.S. Job Gains Surprise to the Upside
According to the U.S. Bureau of Labor Statistics, nonfarm payrolls rose by 517,000 in January—nearly double the December figure and far exceeding economists’ forecast of 185,000.
The unemployment rate fell to a historic low of 3.4%, while average hourly earnings rose 0.3% month-over-month.
Eric Winograd, Chief U.S. Economist at AllianceBernstein, said the job market hasn’t slowed at all—in fact, it’s expanding. To justify rate cuts, both inflation and labor market strength must be “tamed.”
The surprising job figures could prolong the Fed’s rate-hiking cycle beyond market expectations.
With employment and wages still rising, the likelihood of near-term Fed rate cuts continues to fade.
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5. Google Invests $300M in AI Startup
Sources say Google has invested $300 million in artificial intelligence startup Anthropic in exchange for roughly a 10% stake. The deal requires Anthropic to use Google Cloud’s computing infrastructure.
This investment highlights how seriously tech giants are treating AI. Building AI models requires robust cloud infrastructure—which Google is well-positioned to provide.
Three years ago, Microsoft invested $1 billion in OpenAI under a similar arrangement requiring use of Microsoft’s cloud services.
Both OpenAI and Anthropic are developing generative AI—complex software that can write text and create images autonomously.
Google and Microsoft both require AI startups to use their cloud platforms in exchange for investment.
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6. FTC Prepares Antitrust Case Against Amazon
Sources revealed that the U.S. Federal Trade Commission (FTC) is preparing to file an antitrust lawsuit against e-commerce giant Amazon.
Since 2019, the FTC has been investigating Amazon’s market behavior—including its $8.45 billion acquisition of MGM Studios and Prime member perks like free returns.
Two other Amazon deals are also under review: the acquisition of One Medical parent 1Life Healthcare and vacuum maker iRobot Corp.
Both the FTC and Amazon declined to comment.
Amazon’s membership program, logistics capabilities, and pricing have undeniably reshaped the retail landscape.
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7. Kitty Litter Becomes Surprise Clorox Star
Today, Clorox and Church & Dwight Co.—best known for bleach and baking soda—released their latest earnings reports.
Surprisingly, cat litter emerged as the top-performing product category. Demand and sales surged as more people adopted pets during the pandemic.
Clorox’s Fresh Step cat litter posted double-digit revenue growth last quarter, providing strong support while other categories declined.
Clorox CFO Kevin Jacobsen told analysts that cat litter has become a “star performer,” with impressive growth in that segment.
At Church & Dwight, the Arm & Hammer brand also gained record market share in 2022, prompting the company to invest more in growing the brand.
The pet adoption boom during the pandemic has turned cat litter into a surprise profit driver for both companies.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.