Business and Finance News - 6.3.24

Good Morning, Students!

Welcome to your first day of school! I know it’s the beginning of summer and most schools are finishing up, but not this one. Today marks the start of the new Skool Projekt, a financial education company dedicated to empowering you with the knowledge to build wealth.

Understanding business and finance is crucial for building wealth, and building wealth is key to closing the wealth gap. You cannot build wealth unless you understand what it is and how to create it. Empowering individuals with financial education is the most effective strategy to achieve this.

As a former economics teacher with over ten years of experience, I have seen firsthand how non-existent financial education can be. Through Skool Projekt, my goal is to equip you with the knowledge and tools needed to make informed financial decisions and achieve financial independence.

Between the daily Skool Projekt newsletter, which offers business and finance news stories, market updates, and occasional personal finance tips, and the premium Skool Projekt+, where we will provide in-depth financial think pieces three times a week, you will gain a better understanding of your finances^*, the global economy, and how to build wealth.

Thanks for reading, and welcome to the new Skool Projekt!

-Mr. W

* A lack of knowledge about personal finance cost the average American $1,506 in 2023 (National Financial Education Council).

Dell Shares Plunge 18% on Q1 Gross Margin Decline, Despite 6.3% Sales Growth and Profits Beating Estimates

• Dell (DELL) shares dropped 18% following Q1 earnings report.

• Q1 gross margins fell by 2.5%.

• AI server demand has slowed, impacting margins.

• Sales increased by 6.3% to $22.2 billion.

• Profits excluding items were $1.27 per share, beating projections.

• Operating income declined by 14%.

• Shares remain up over 120% year-to-date.

* Dell Technologies is a company that provides a wide range of technology products and services; like computers, servers, storage solutions, and networking.

SEC Approval of Ethereum ETFs Marks Historic Shift, Boosts Regulatory Clarity and Market Sentiment

• SEC approved a rule change for Ethereum exchange-traded funds* (ETFs).

• VanEck applied first for SEC permission to list an Ethereum ETF.

• SEC approval seen as historic for crypto investing, per VanEck CEO.

• VanEck can now proceed to bring the Ethereum ETF to market.

• Ethereum ETF approval signals potential for clearer crypto regulations.

• FIT21 Act passing in the House is another step toward regulatory clarity.

• Ether spiked on May 23 after SEC approval of Ethereum ETF applications.

* An Ethereum exchange-traded fund (ETF) is a financial product that lets you invest in Ethereum, a popular cryptocurrency, without actually having to buy or manage the cryptocurrency itself.

Inflation: Core PCE Rises 0.2% in April, 2.8% Yearly; Personal Spending Lags, Market Reacts Positively

• Core Personal Consumption Expenditures* (PCE) price index rose 0.2% in April, up 2.8% year-over-year.

• Headline PCE increased 0.3% in April and 2.7% annually.

• Personal income rose 0.3% in April, matching estimates.

• Personal spending increased 0.2%, below the 0.4% estimate.

• Energy prices rose 1.2%, while food prices declined 0.2%.

• Fed officials prefer PCE over Consumer Price Index (CPI) for its broader scope and consumer behavior adjustments.

• Market reaction saw stock futures rise and Treasury yields fall after the release.

* Personal Consumption Expenditures (PCE) refer to the measure of the total value of goods and services consumed by households.

Marvell's Data Center Revenue Soars 87%, Q1 Revenue Slightly Beats Estimates Amid Wider Losses and Stock Drop

• Marvell's* (MRVL) data center revenue jumped 87% year-over-year.

• Total Q1 revenue was $1.16 billion, slightly above estimates.

• Marvell reported a wider-than-expected loss of $215.6 million, or 25 cents per share.

• Declines in other divisions ranged from 13% to 75% year-over-year.

• Marvell expects an 8% sequential revenue increase in Q2.

• Analysts raised Marvell's stock price target to $90 from $85.

• Marvell shares fell 6.7% to $71.74 on Friday morning.

* Marvell Technology is a company that designs and manufactures semiconductors and related technology products.

MongoDB Lowers Fiscal 2025 Forecast Amid Slower Growth, Stock Drops 26% After Light Guidance

• MongoDB* (MDB) lowered its fiscal 2025 forecast due to slower-than-expected consumption growth.

• Year-over-year revenue growth slowed for the third consecutive quarter.

• New guidance predicts 12% growth for the fiscal year, compared to 57% two years ago.

• MongoDB stock sank up to 26% in extended trading after issuing light guidance.

• Q1 earnings per share were 51 cents adjusted, beating the 40 cents expected.

• Q1 revenue was $450.6 million, exceeding the $439.7 million estimate.

• Atlas, MongoDB's cloud service, accounts for 70% of total revenue.

* MongoDB is a technology company that provides database software designed to help organizations manage, store, and analyze large amounts of data.

A Few Companies Expected to Report Earnings This Week…

• CrowdStrike¹ (CRWD) and Hewlett Packard² (HPE) are expected to report on Tuesday.

• Lululemon³ (LULU) and Dollar Tree⁴ (DLTR) are expected to report on Wednesday.

• Autodesk⁵ (ADSK) is expected to report on Thursday.

¹ CrowdStrike is a cybersecurity company that provides various services and products to protect businesses and organizations from digital threats.

² Hewlett Packard (HP) is a technology company that provides a wide range of products and services; personal computers, printers and imaging, enterprise solutions, etc.

³ Lululemon is a company that designs and sells athletic apparel and accessories.

⁴ Dollar Tree is a retail store that sells a wide variety of products, most of which cost one dollar or less.

⁵ Autodesk is a software company that creates applications for design, engineering, and entertainment, such as AutoCAD for drafting and 3D modeling.

Here’s how the markets closed on Friday:

• Dow Jones: 38,686.32 +574.84 (+1.51%)

• S&P 500: 5,277.51 +42.03 (+0.80%)

• Nasdaq: 16,735.01 -2.06 (-0.01%)

• Bitcoin (BTC): $67,793.49 (2:30PM PST on 6/2/24)

• Ethereum (ETH): $3,785.27 (2:30PM PST on 6/2/24)

Here’s how the MAGNIFICENT SEVEN STOCKS did on Friday:

• Microsoft (3.085T): 415.13 +0.46 (+0.11%)

• Apple (2.948T): 192.25 +0.96 (+0.50%)

• Nvidia (2.697T): 1,096.33 -8.67 (-0.78%)

• Alphabet (2.15T): 173.96 +0.40 (+0.23%)

• Amazon (1.836T): 176.44 -2.88 (-1.61%)

• Meta Platforms (1.184T): 466.83 -0.22 (-0.05%)

• Tesla (568B): 178.08 -0.71 (-0.40%)