On Monday, 28 October 2019, the S&P 500 index reached its highest level in the last 6 months and closed at 3039.42 points. However, on 29 October 2019, the index closed slightly lower than its previous day close at 3036.89 points. The index since the beginning of 2019 till 29 October 2019 has soared up by ~ 21%. The index was boosted as a result of strong performance by the technology and the bank stocks during October 2019. The significant contributor to the S&P 500 index was Apple, whose securities in the last one month grew by ~ 9%. The next two were UHG and JPMorgan Chase. Also, on 31 October 2019, S&P 500 index closed the market session at 3,037.57 points, down by 0.30 percent from its last close.
There were ten major stocks which helped S&P 500 index to make a new record on 28 October 2019. These include of Apple, United Health Group (UHG), JPMorgan Chase, Facebook, Intel, Bank of America, NVIDIA, Alphabet Class C, Alphabet Class A and Microsoft.
Other factors which contributed to the record high of the index was the recent bounce back in bond yields, after the US President Donald Trump decided to meet Chinese vice premier as mentioned in his tweet on 10 October 2019. The partial deal between the nations provided some hope to ease trade between the US and China. The treasury bond prices also witnessed an improvement. Many technology stocks also heaved a sigh of relief as major players like Apple and Nvidia have felt an impact of the US-China trade war on their businesses.
In this article, we would look at some of the major players in the index under discussion and cover their biggest announcements in October 2019.
Microsoft Corporation (NASDAQ: MSFT)
Microsoft Corporation (NASDAQ: MSFT) remains the showstopper during October 2019 because of the winning of recent Pentagon cloud computing US$10 billion defence contract. Microsoft defeated the oldest player in the cloud computing market, Amazon and won this contract which boosted its share price during the period.
Other big announcements in October 2019.
- Q1 FY2020 Earnings Release:
On 23 October 2019, the company released its Q1 FY2019 results for the quarter ended 30 September 2019.
- Revenue of the company increased by 14% to US$33.1 billion.
- Operating income went up by 27% to US$12.7 billion.
- Net income improved by 21% to US$10.7 billion.
- Diluted EPS increased by 21% to US$1.38.
- The company returned $7.9 billion to its shareholders in the form of dividend and share purchases.
- Revenue generated through the cloud was US$11.6 billion representing a growth of 36% YoY.
- Revenue generated through the productivity and business processes increased by 15% on a constant currency basis.
- Revenue in intelligent cloud increased by 27% to US$10.8 billion and in More Personal Computing by 4% to $11.1 billion.
- On 28 October 2019, Microsoft announced the new capabilities that would provide a seamless, smart and secured IoT solutions to the consumers. Through this, the consumers would be able to embrace IoT, as a core strategy to propel better business results, enhance security and address social issues by forecasting and at the same time averting any failure in the equipment, make the best use of smart buildings for space usage and energy management, enhancing patient results and worker security, keeping a track of assets throughout the supply chain, and many more.
- Microsoft entered into a partnership with Humana to develop predictive and customised health care solutions that would assist the members to control health problems through Microsoft Azure, voice technologies as well as Azure artificial intelligence.
- Microsoft also partnered with SAP during the period, where both partners would contribute to accelerating as well as modernising client shifts to SAP S/4HANA and SAP Cloud Platform on Microsoft Azure.
Microsoft Corporation stock last traded on NASDAQ at USD 143.37, down by 0.86 percent from its last close (as on 31 October 2019).
Alphabet Inc. (NASDAQ: GOOG, GOOGL)
Acquisition of Fitbit:
As per a report released by Reuters, Google- the owner of Alphabet Inc has made an offer to acquire Fitbit Inc, which is a US-based wearable device maker. However, the report states that there is no certainty that the negotiation between the parties involved would lead to any deal between them.
Fitbit’s devices are used for tracking the daily steps, distance travelled, heart rate, calories burned, floor climbed, the sleep duration along with the quality of sleep.
Q3 2019 Results:
On 28 October 2019 Alphabet Inc. (NASDAQ: GOOG, GOOGL) released its Q3 results for the period ended 30 September 2019.
- Revenue in Q3 2019 increased by 20% to US$40,499 million as compared to the previous corresponding period.
- Operating income went up from US$8,625 million in Q3 2018 to US$9,177 million in Q3 2019.
- Net income declined from US$9,192 million in Q3 2018 to US$7,068 in Q3 2019.
Alphabet Inc Class A stock last traded on NASDAQ at USD 1,258.80, down by 0.15 percent from its last close (as on 31 October 2019).
Alphabet Inc Class C stock last traded on NASDAQ at USD 1,260.11, declining by 0.094 percent from its prior close (as on 31 October 2019).
Spotify Technology SA (NYSE: SPOT)
Spotify provides services related to music with millions of tracks for its users. Spotify enables users to find the right music or podcast for any moment.
Q3 2019 Results:
On 28 October 2019, Spotify Technology SA (NYSE: SPOT) released its Q3 results. It declared that the company exceeded its expectation in Q3 2019 results with 30% growth in the total monthly active users (MAU) YoY and 7% on QoQ.
The total revenue increased by 28% on pcp and 4% on QoQ.
By region, 35% of the total MAUs were from Europe, 27% from North America, 22% from Latin America and 16% from the rest of the world.
The number of premium customers grew by 31% to 113 million YoY from around the world. During the period, the company’s net cash flow from operating activities stood at €71 mn. Free cash flow during the quarter period stood at €48 million.
In Q4 2019, the company expects total MAU to be in between 255-270 million, Total Premium Subscribers in between 120-125 million, total revenue to be in the range of €1.74-€1.94 billion.
Spotify Technology SA last traded on NYSE at USD 144.30, up by 2.74 percent from its previous close.
Atlassian Corporation Plc (NASDAQ: TEAM)
Atlassian Corporation Plc (NASDAQ: TEAM), a top provider of team collaboration as well as productivity software on 17 October 2019 released its Q1 FY2020 results for the quarter ended 30 September 2019.
- Revenue grew by 36% to US$363.4 million.
- Operating loss for the period was US$4.6 million.
- Net income for the first quarter was US$69.3 million, and net income per diluted share was US$0.28, which was a net loss of US$1.03 in the previous corresponding period.
- Cash and cash equivalent along with short-term investments by the quarter end was US$1.8 billion.
Q2 FY2020 and Fiscal Year 2020 Outlook:
- Total revenue would lie in between US$386 million to US$390 million.
- Gross margin would be around 83% on an IFRS basis and ~ 86% on a non-IFRS basis.
- Net loss per diluted share is anticipated to be ~ US$0.03 on an IFRS basis.
- Total revenue would lie in between US$1,560 million to US$1,574 million.
- During FY2020 period, the gross margin is projected between 82 percent – 83 percent (IFRS) and 85 percent - 86 percent (non-IFRS).
- Net income per diluted share is likely to be roughly US$0.01 on an IFRS basis and ~ $1.00 on a non-IFRS basis.
On 31 October 2019, Atlassian Corporation stock last traded on NASDAQ at USD 120.79, down by 3.23 percent from its previous close.
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