What's up with the Chemical Industry!

July 2024

Hi!

we are past half of the year! wow, time passes by!

let's have a look:

Stocks & Markets

The News

• MANUFACTURE - Phillips America
  • Philips ADRs surged 14% after reporting second-quarter earnings with comparable sales growth meeting revenue estimates.
  • Profit expectations were slightly missed, but a $1.1 billion settlement related to sleep apnea devices boosted investor confidence.

• FAST FOOD: McDonalds is selling less since 2020! MCD3.74%
  • People are eating less McDonald's after sales fell for the first time since the end of 2020.
  • McDonald's reported second-quarter earnings below analysts' expectations.
  • Net income dropped by 12%.
  • The recent "$5 Meal Deal" promotion is expected to impact third-quarter earnings more significantly.
• BEVERAGES - Heineken sinking HEIA.NV -9.68%
  • Heineken shares dropped after missing profit growth expectations for the first half of the year.
  • The company reported a €95 million net loss due to an €874 million writedown of its stake in China Resources Beer.

• TECH Microsoft doing great!
  • Microsoft will report fiscal fourth-quarter earnings after the closing bell today.
  • Analysts expect revenue of $64.37 billion, up 14.6% year-over-year, with net income projected at $21.88 billion.
  • Investors are keen to hear about the impact of AI developments, including partnerships with OpenAI and new Windows PCs designed for AI workloads, on future growth and profitability.

• SPORTS The Olympics impact
  • The Paris Olympics are benefiting local and global businesses, with Nike and Ralph Lauren launching athlete-focused products, Airbnb bookings surging, and Comcast achieving record ad sales.
  • The event is projected to boost Paris’s economy by $12.2 billion.

• AIRLINES - Delta Flights & Ryan Air doing not so well
  • Delta flights were canceled into Monday due to a global tech outage last week caused by a CrowdStrike update affecting Microsoft systems.
  • Ryanair's first-quarter profit fell 50% year-over-year, with fares down 15%.
  • Ryanair Airs Shares dropped over 17% and are now down almost 30% in 2024.
• MANUFACTURE - Doing better than expected: 3M
  • 3M shares surged 23% to a 52-week high following better-than-expected Q2 results.
  • The company reported adjusted earnings of $1.93 per share, exceeding the $1.68 estimate, and surpassed revenue expectations.
• AGRICULTURE - The sector is in decline
  • The agriculture sector declined in Q2, with only wheat and coffee prices rising.
  • Cocoa prices fell but remained up for the year; BCOM’s zero cocoa allocation avoided negative impact but missed out on 100% YTD returns.
  • Corn dropped 10%, and soybeans fell 5%.

• US ECONMY - U.S. Economy Grew Faster Than Expected in Q2
  • U.S. economic activity in Q2 was stronger than expected, driven by robust consumer spending, increased government spending, and a large inventory build.
  • The Commerce Department's initial estimate shows real GDP rose by 2.8% annualized, adjusted for seasonality and inflation, surpassing the forecast of 2.1% and the 1.4% rise in Q1.
• MICROCHIPS - Nvidia Stock Rebounds
  • Nvidia shares fell nearly 7% early Thursday, extending previous losses, but rebounded as investors bought the dip.
  • Despite recent declines, Nvidia is still one of the top-performing S&P 500 stocks this year, with a gain of over 130%.
• LUXORY - Hermes increasing revenue
  • Hermès outperformed other luxury brands during the demand slowdown, benefiting from its affluent clientele.
  • The company’s American depositary receipts rose following a strong second-quarter sales performance.
  • Revenue grew 13.3% at constant exchange rates, surpassing expectations.

• PHARMACEUTICALS - AbbVie share hit record high & J&J performance
  • AbbVie shares hit a record high due to strong sales of non-Humira drugs, such as Rinvoq and Skyrizi, which offset declining Humira revenue
  • Johnson & Johnson reported strong Q2 2024 financial results, driven by its pharmaceutical division, boosting many pharma stocks.
  • J&J announced a quarterly dividend of $1.24 per share, consistent with the previous dividend, with a forward yield of 3.28%.
• AEROSPACE - RTX going to the space! RTX 8.24%
  • RTX shares reached a record high following better-than-expected Q2 earnings and an increase in full-year guidance.
  • The boost was driven by strong sales from Raytheon, Pratt & Whitney, and Collins Aerospace, amid high demand and a large backlog.

• SOLAR - Sunpower attempts to recover from 72% losses
  • Last week was challenging for solar stocks, with SunPower plunging 72% in just two sessions.
  • On Monday, the stock rose 5% after halting shipments and leases.
  • Analysts downgraded SunPower due to balance sheet issues and delayed financial filings.
  • Shares remain down nearly 30% in 2024.
• AUTOS - Tesla and Ford dropping!
  • Tesla shares fell 12% after reporting weaker-than-expected Q2 earnings.
  • Tesla's Automotive revenue dropped 7% to $19.9 billion, and margins shrank.
  • Ford shares dropped 11% post-market after Q2 earnings missed estimates due to warranty issues.
  • Ford's Revenue beat expectations at $44.81 billion versus $44.02 billion expected.

• SEMICONDUCTORS - NXPI -7.58% NXP Semiconductors
  • NXP Semiconductors shares dropped before Tuesday’s opening bell due to a weaker-than-expected outlook, citing reduced automotive spending and rising geopolitical risks.
  • Watch the $248 level for potential support amid the post-earnings sell-off.

Shorts:

• Microsoft shares fell 2.72% in extended trading due to slower growth in its Azure cloud service.
• The Federal Reserve is expected to maintain its 23-year high interest rate.
• AMD, the chipmaker's stock surged over 7% after second-quarter results exceeded estimates.
• DuPont beats estimates on strong electronics recovery
• Air Liquide sales beat estimates as profits rise on margin uptick
• Dow earnings decline on lower plastics margin
• Ineos swings to profit on selling prices, volumes uptick
• LG Chem’s petchem business swings to profit on firm sales
• SK Innovation, SK E&S to merge

Final thoughts

There you have it guys, it is mid year and mid summer (at least in the northern hemisphere). There is not much to see but the slow recovery for certain industries.

I've head that we may be experiencing a lagging recession, what do you think?

See you next month!

Is there anything in especial that you liked the most?

Just reply to this e-mail and let me know!

My best wishes!

Emmanuel Ortega

a.k.a. Chemical Engineering Guy

113 Cherry St, Seattle, WA 92768
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