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Today in the Market (1/10/2024)

A GREAT START!

Good Morning! On Wednesday, U.S. equities concluded the trading day with gains, mostly driven by the technology sector. Investors were anticipating new inflation data and processing significant developments in spot bitcoin ETFs.

The Dow Jones concluded the trading session with a gain of 0.45%. Simultaneously, the S&P 500 had a 0.57% increase, while NASDAQ surged by 0.75%.

 

WD-40 Company’s (WDFC) stock had a significant increase on Wednesday after the release of the company’s financial results for the first quarter of fiscal year 2024. The first quarter concluded in November and the management was really pleased with the outcomes. CEO Steve Brass gave the press release’s opening statement, saying, “We have started fiscal year 2024 firing on all cylinders.”

So what did WD-40 get going for them? WD-40’s net sales in Q1 increased by 12% compared to the previous year, reaching a total of $140.4 million. Management attributes 65% of this gain to increased sales volume, which is the reason for the market’s positive response to these results. Furthermore, the firm had an improvement in profitability, as seen by a 25% year-on-year increase in net income, reaching $17.5 million.

What about going forward? Although the Q1 results were positive, WD-40’s management chose not to increase its full-year financial outlook, instead opting to retain it. The business maintains its forecast of a 6% to 12% increase in net sales for the entire year, with a projected net income ranging from $65 million to $70 million.

 

A SLOW DOWN

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According to the World Bank, the next few years in the early 2020s are expected to see the most severe decline in global economic growth in more than three decades. Although the U.S. economy is doing well and major nations successfully control inflation without causing a global crisis, World Bank Chief Economist Indermit S. Gill argues that the overall perspective is still “gloomy.”

So how bad is it predicted to be? He predicts that the global gross domestic product (GDP) would grow at a slow rate of 2.4% this year, which is lower than last year’s 2.6% growth rate and the average annual growth rate of 3.1% throughout the 2010s. In 2024, the predicted per capita investment growth is projected to decelerate to 3.7%, less than half of the average annual growth rate seen in the preceding two decades.

So what needs to be done? Gill argues that unless low-income nations increase investment and foster international commerce, the 2020s will be seen as a period of wasted potential. However, according to Ayhan Kose, the Deputy Chief Economist of the World Bank, the US economy doing better than anticipated might be seen as an additional advantage.

 

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