As part of the MarketWatch 50 series, Eleanor Lys discusses with Dr. Daniel Skowronski, Chief Scientist and Medical Officer at Eli Lilly & Co. LLY. The company’s stocks have risen by 63% this year due to the excitement surrounding its Monjaro therapy for type 2 diabetes. Monjaro is a GLP-1 drug, competing with Vegovy and Ozempic, manufactured by Novo Nordisk A/S NVO. This category of medication leads to weight loss so substantial that it can have an impact on various other sectors.
Thank you for reading this post, don't forget to subscribe!During the conversation, Skowronski discussed an alternative approach to more cost-effective weight reduction treatments. He also expressed “extreme optimism” about Lilly’s experimental remedy for Alzheimer’s disease, currently in clinical trials.
More about MarketWatch 50:
The challenging nature of earnings season
Every quarterly earnings season generates numerous headlines about companies that outperform analysts’ consensus projections for sales and earnings. Approximately 70% of companies beat expectations every quarter. Over time, a pattern of surpassing expectations and raising projections can support upward stock movements.
Nevertheless, there are always exceptions. A company may fail to meet analysts’ predictions even after lowering targets in earlier guidance. A firm might also need to revise its outlook due to operational challenges or evolving market conditions. Here are some recent instances:
Shares of Warner Bros. Discovery Inc. WBD plummeted by 19% on Wednesday following the company’s warning that it might not be able to fulfill its debt obligations if the TV advertising market fails to recover. Another cause for concern among investors was a 700,000 drop in direct-to-consumer subscriptions.
Warner Bros. Discovery CEO David Zaslav attributed the subscriptions decline to “one of our lightest original-content schedules in years”, partially due to the Hollywood actors’ strike that concluded on Thursday.
As of September 30, the company’s total debt stood at $44.8 billion, down from $52.6 billion at the close of 2022. Zaslav emphasized during the call, “Paying down debt and eliminating debt will remain a top priority for us, we’re also now in a position to allocate more capital to growth opportunities.”
WBD’s current iteration came into existence on April 8, 2022, when AT&T Inc. divested WarnerMedia, which was merged with Discovery Inc.
Further examples of challenging earnings reports this week:
Earnings season and investor remorse over IPOs
For a significant period, low interest rates contributed to the success of many initial public offerings, often resulting in share price increases on the first day of trading. This trend has reversed due to the sluggish pace of companies going public and the stock market’s slow response. Earnings season has highlighted regret among investors who were early investors in several IPOs such as ARM Holdings Plc ARM, Clavio Inc., KVYO, and Instacart.
Vehicle.
A different perspective on earnings season from Disney
Investor sentiment improved following Walt Disney Co. DIS releasing its third-quarter results, including a substantial surge in Disney+ streaming subscriptions. The company’s stock soared by 7% on Thursday, marking its best performance in nearly three years, as analysts reacted positively to Disney CEO Bob Iger’s cost-cutting measures, improved profitability, and price hikes.
Even with dividends reinvested, Disney’s stock remained 48% below its position two years ago, as reported by FactSet.
Therese Poletti: Disney CEO Bob Iger is getting his hands dirty by addressing the studio’s issues – will it be sufficient?
Favorable responses to other companies’ earnings updates:
New tax regulations and guidance for tax planning
Andrew Kesher elucidates the changes in tax brackets and rules for 2024:
Beth Pinsker provides insights on leveraging the latest information from the IRS to reduce your 2024 tax liability.
Equity selections
When witnessing the impact of hurricanes or floods on people, it raises the question of why individuals would choose to reside in affected regions. Michael Brush explains how people’s location preferences can yield long-term benefits.
More insights on stocks:
- Three value-stock selections from seasoned managers with strong performance histories
- Following Exxon Mobil and Chevron transactions, five potential acquisition targets in the oil industry
Retirement strategy
Alessandra Malito authors the Help Me Retire column. This week, she offers guidance to a woman whose 60-year-old brother has applied for Social Security disability benefits but still intends to contribute to a retirement account.
Additional details on retirement and related planning:
- My husband delegates retirement-investment plans to me. How should I engage the right consultant?
- Medicare’s Meena Seshamani addresses your queries on open enrollment
Stock market ups and downs
You may be aware that the tech-focused “Magnificent Seven” stocks – Apple Inc. AAPL, Microsoft Corp. MSFT, Alphabet Inc. GOOGL, AMAZON.COM INC. AMZN, Nvidia Corp. NVDA, Meta Platform Inc. META, and Tesla Inc. TSLA – SPX contribute to 15% of the S&P 500’s gains this year. This stems from the index’s weighting by market capitalization.
The three-year chart for the S&P 500 information-technology sector above illustrates a pattern of boom and bust, with recent volatility.
However, signs indicate that the surge in technology stocks may subside by the end of 2023, according to Joseph Adinolfi’s report. Additionally, he highlighted another bullish indicator on Friday.
Yet, warnings about financial markets continue to abound. Here is a sample:
Becoming a mortgage lender: a viable option for you too
In the Big Move column, Aarti Swaminathan addresses queries from a homeowner who has rented out a property for an extended period and now wishes to sell, while the tenants are interested in purchasing the property. Given the high interest rates, should one consider becoming a mortgage lender?
Extended Housing Coverage:
Substantial stock market surge, and identification of 13 potential recovery candidates in 2024
Mark Hulbert explains that Salesforce Inc. CRM – the poorest performer among the 30 components of the Dow Jones Industrial Average DJIA last year – has emerged as this year’s best-performing stock in the esteemed index.
Among the S&P 500’s worst-performing stocks this year, Hulbert lists 13 potential recovery candidates for 2024.
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