Today in the Market (2/5/2024)

Good Morning! On Monday, U.S. equities saw a decline after Fed Chair Jerome Powell’s remarks, which dampened expectations of a near interest rate reduction. This has increased the importance of a busy week of corporate results to sustain the current market upswing.

The Dow Jones fell the most by 0.71%, while the S&P 500 had a small decrease of 0.32%. The Nasdaq had the smallest dip of 0.20%.

GROWTH WASN'T ENOUGH

McDonald’s (MCD) announced its Q4 results, revealing a worldwide same-store sales rise of 3.4%, which fell short of the anticipated 4.79% increase. The company’s U.S. sales growth came in at 4.3%, falling short of the 4.45% increase that Wall Street had anticipated.

  • Revenue: $6.41 Billion vs. $6.45 Billion Expected
  • Earnings Per Share: $2.95 vs. $2.82 Expected

What helped? In the U.S., the boost in sales during the fourth quarter was primarily influenced by higher transactions and raised pricing on the menu. This was further supported by marketing initiatives such as the reintroduction of McNugget Buddies and the availability of Happy Meal Squishmallows. US sales had a significant increase of 8.7% for the whole fiscal year.

Do you want to make that a large? The McDonald’s loyalty program played a crucial role in its overall success. During the fourth quarter, the sales generated by loyalty members were $6 billion, spanning over 50 regions. Over the fiscal year 2023, these members contributed to sales of more than $20 billion, representing a significant increase of 45% compared to the previous year, 2022.

IS IT WORTH IT?

The seventh-generation Ford (F) Mustang is about to be introduced in the European market, where it has garnered unexpected popularity since its formal debut in 2015. However, fans in Europe will not have the same benefits as their counterparts in the U.S.  

Ford’s European divisions will be offering two versions of the Mustang: the GT and the Dark Horse. So what is different? 

  • Horsepower for the GT: 440 vs. 468
  • Horsepower for the Dark Horse: 448 vs. 500 
  • Price for the GT: $69,800 vs. $44,950
  • Price for Dark Horse: $82,300 vs. $61,725

Is it worth it, though? The European-market Mustang has a noteworthy existence, even though costing more and less power is not a winning combination. Conversely, Nissan decided to refrain from selling the Z in outside markets because of the financial and logistical challenges associated with ensuring its compliance with emissions regulations. Similarly, Subaru discontinued the WRX for the same rationale.

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