Happy Sunday, you lovely lot! Day 11 since my Covid symptoms started, and I’m finally beginning to feel more human; the biggest thing remaining is the brain fog. Perhaps I’m just stupid now… We’ll have to wait and see.
Outside of earnings, this week has (thankfully) been relatively quiet.
Let’s see what happened.
Key Events
Global 4-Day Work Week Pilot Study Reveals What We Already Knew
This week, the results came in from a pilot whereby companies, encompassing around 3,000 employees, trialled a 4-day work week (or, as a minimum, a 5-day week totalling no more than 32 hours).
This study showed what I think most people already knew: that paying people their full wage while reducing their hours worked massively increases productivity, massively improves their mental wellbeing and reduces turnover (the number of people resigning).
Not only that, but the companies taking part in the study found that their revenues were unchanged. Essentially, to accommodate the lower number of working hours, these businesses needed to reduce unnecessary paperwork and cut meeting times significantly (one business reported that their weekly meetings were reduced from 2 hours to just 30 minutes and still achieved everything they needed to achieve).
The majority of the companies involved in the pilot are continuing to allow employees to work at these reduced hours.
Perhaps I’m simply jaded, but I thought this outcome was obvious, and it genuinely surprises me that it’s taken this “breakthrough” study for business owners to also see it. It’ll be interesting to see if and how the average workplace changes as a result, and how that may affect productivity metrics, as well as company earnings. With fewer resignations, staff will become more experienced and efficient, it could create a compounding effect over time.
The Anniversary of Russia’s Invasion of Ukraine
Friday was a largely anticipated event, as it was the one-year anniversary of the war in Ukraine. Not only were there global demonstrations and events planned, but Putin himself had previously stated that something will occur on this day that will “overshadow the supportive events”. It’s possible that he was referencing a “peace proposal” from China released on the day, but this was largely dismissed, particularly with China’s increasingly close ties to Russia.
While nothing substantial happened on the ground, there were signs that things are continuing to escalate, which could have a large impact on the stock market in the near to medium term.
Firstly, there is supposedly evidence that China are willing to supply lethal weapons to Russia, which can be used in Ukraine. Many of the world’s largest companies have factories in China (Tesla, Apple, etc), so increased tensions between the West and China could spark a sanctions war that may impact these companies significantly.
Secondly, there’s the delivery of heavy weapons to Ukraine. Several Leopard 2 tanks were delivered on the anniversary of Russia’s invasion, with many more to come. It’s yet to be seen whether Russia will make any significant retaliations to this, or whether they’ll continue with threats and little action.
Lastly, while there was no consensus in the G20 meeting to sign off on a statement condemning Russia’s invasion, only Russia and China voted against the proposal. This of course sparked even more arguments between the US and China. India, who hosted the G20 meeting, refused to state whether or not they supported or opposed the proposal.
The next few weeks and months will be crucial in determining where the markets will go; whether we’ll continue to see volatility and a return to supply issues, or whether some progress will be made in resolving the global situation.
Stock Market News
Tesla (TSLA) – Announced New Engineering HQ in California
On Thursday, Tesla announced that it leased the same building in Palo Alto, California that was previously home to Hewlett Packard. This building will act as Tesla’s new engineering headquarters.
Elon Musk, Tesla’s CEO, said “This was HP’s original headquarters, and so I think it’s a poetic transition from the founders of Silicon Valley to Tesla, and we’re very excited to make this our global engineering headquarters.”.
While the company’s global headquarters will remain in Austin, Texas, the Californian HQ will be dedicated to AI and robotics specifically. This will include Tesla’s Full-self-driving technology, the Optimus robot and, most probably, the Dojo AI server.
We’ll likely hear more about this HQ’s objectives next week, at Tesla’s Investor Day.
Company Earnings Reports for W/E 26th February 2023
On Tuesday, I covered the earnings reports of the following 3 companies. Click here to find out what happened:
- The Home Depot (HD) – Q4 Earnings
- Walmart (WMT) – Q4 (Fiscal Q4 2023) Earnings
- Coinbase (COIN) – Q4 Earnings
On Wednesday, I covered the earnings reports of the following 4 companies. Click here to find out what happened:
- Lloyds Banking Group (LLOY) – Q4 Earnings
- Nvidia (NVDA) – Q4 Earnings
- eBay (EBAY) – Q4 Earnings
- Etsy (ETSY) – Q4 Earnings
On Thursday, I covered the earnings reports of the following 4 companies. Click here to find out what happened:
- BAE Systems (BA) – FY 2022 Earnings
- Block (SQ) – Q4 Earnings
- Intuit (INTU) – Q4 (Fiscal Q2 2023) Earnings
- Moderna (MRNA) – Q4 Earnings
Next Week
Tesla (TSLA) Investor Day – 1st March
On Wednesday, Tesla’s highly-anticipated Investor Day will finally be upon us. There are all sorts of rumours when it comes to this event, with speculation that the company will announce new models, potentially even a $25,000 Robotaxi-style vehicle. Some even believe we’ll see a casual Optimus robot delivering a drink onto the stage, or something similar.
What we do know for certain, is that the company intends to announce an update on its next-generation vehicle platform (not new vehicles themselves; the technologies they are built on). We also expect to get a glimpse of “Master Plan Part 3”, which is essentially just Elon Musk’s vision of how to accelerate the transition to sustainable energy.
Personally, I don’t know what to expect. I’ll be keeping expectations low, assuming we will only see a broad outline of where the company wants to go. Regardless of what happens; it’ll be an interesting event.
Company Earnings Reports
Here’s a list of the companies I’ll be covering next week (subject to change):
- Zoom Video Communications (ZM) – 27th February
- Target (TGT) – 28th February
- Rivian (RIVN) – 28th February
- Persimmon (PSN) – 1st March
- Salesforce (CRM) – 1st March
- Taylor Wimpey (TW) – 2nd March
- Costco Wholesale (COST) – 2nd March
- Dell Technologies (DELL) – 2nd March
Let me know your thoughts on this week’s events, in the comments below!
