Banks & Tech: Rising Rates, Search Shakeups, and USB Analysis

Interest Rates, Earnings, and Stock Highlights for Savvy Investors

Author

Justin Oh
April 21, 2023

🚀 Welcome to this week's newsletter! 🌟 We've got important updates for you, including rising interest rates pressuring banks, Alphabet shares dipping due to Samsung possibly switching to Bing, Apple launching its savings account with a 4.15% interest rate, and Goldman Sachs missing revenue estimates after a $470 million hit on Marcus loans. 📉 Also, don't miss SpaceX's Starship explosion, Tesla's earnings decline, and tweets discussing NVDA, bond and equity markets, and Google's search engine market share. 🔍 Our featured stock analysis is on US Bancorp (USB), an American bank with an emphasis on liquidity and high ROE. 🏦 Exciting news for Cents Invest Club members: the Big Board has switched to real money this week! 💸 Make sure to check it out on the website.

📣 As a reminder, if you’re an accredited or serious investor looking for a community of serious intelligent stock investors head over to centsinvest.com and get 30 days FREE! 📣

 What You Need to Know

Headlines

State Street, Schwab See Deposits Drop

Banks across the board are under pressure to pay depositors more as interest rates continue to rise.

https://www.wsj.com/articles/state-street-schwab-see-deposits-drop-4b0438ac?mod=hp_lead_pos1

Alphabet shares dip on report Samsung phones may switch to Microsoft Bing search

The move could cost Google billions in advertising revenue and reportedly shocked employees, given Samsung's longtime relationship with Google.

https://www.cnbc.com/2023/04/17/alphabet-stock-dips-on-report-samsung-phones-may-use-microsoft-bing-search.html

Apple launches its savings account with 4.15% interest rate

Apple on Monday said its Apple Card savings account is now available to users with a 4.15% annual percentage yield.

https://www.cnbc.com/2023/04/17/apple-savings-account-announced-with-4point15percent-interest.html

Goldman Sachs misses revenue estimates after taking $470 million hit on Marcus loans

A hangover from Goldman's consumer efforts and weaker-than-expected bond trading revenue contributed to a disappointing quarter for the investment bank.

https://www.cnbc.com/2023/04/18/goldman-sachs-gs-earnings-1q-2023.html

SpaceX’s Starship Explodes Shortly After Launching Uncrewed Test Flight

Starship launched successfully but exploded a few minutes later, ending the inaugural flight of a vehicle Elon Musk wants to use for deep-space missions.

https://www.wsj.com/articles/spacex-starship-elon-musk-second-launch-attempt-bf932aaf?mod=hp_lead_pos7

Tesla shares fall nearly 10% after earnings decline from year-ago quarter

Analysts are also worried about the prospect of continued price cuts alluded to by CEO Elon Musk.

https://www.cnbc.com/2023/04/20/tesla-shares-fall-on-year-over-year-income-earnings-drop.html

On Twitter

 Trends In Focus

US Bancorp is a prominent American bank with a focus on maintaining liquidity and boasting an average loan duration under 10 years, which mitigates risk. The bank has consistently delivered high returns on equity (ROE), outperforming most peers. Although exposure to office space loans presents a potential risk, US Bancorp has taken steps to reduce this, such as tightening underwriting standards and cutting exposure to specific types of loans. Its solid balance sheet and liquidity should further aid in weathering market turbulence. The bank provides attractive returns to shareholders through dividends and buybacks, with a dividend yield currently above 5%. Though buybacks may be muted in the short term, USB is considered a buy at current prices based on the ongoing market conditions and assumptions.

To read the full write up click here.

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