This week we spoke with with Alex Zweiner, CEO of Arpari! Check out our audio short above to hear about how Arpari is remaking banking for Commercial Real Estate Entrepreneurs. See full profile below.
April 27th, 2022
The Market was essentially flat today after Microsoft and Alphabet reported earnings yesterday. Wall Street is looking ahead to Meta’s and Apple’s earnings later this week to take guidance on which direction the Market is heading.
The S&P 500 was slightly up by +0.21%
The NASDAQ Composite edged down by -0.01%
The Dow Jones Industrial Average was up by +0.19%
The Russell 2000 fell by -0.34%
Information technology companies make up outsized portions of the S&P 500 (~27%) and NASDAQ Composite (~41.5%) indexes. Of the FAANG companies, Netflix and Google have reported already, showing misses against Wall Street’s expectations. Meta (Facebook) and Apple will report on Wednesday and Thursday.
Alphabet and Microsoft show conflicting sentiments toward consumers and businesses
Alphabet (parent company to Google) and Microsoft reported earnings after market hours on Tuesday. Alphabet reported a miss due to slowing ad spending, while Microsoft surpassed Wall Street’s expectations on strong growth in its cloud business.
Why does this matter?
Analysts are reading these conflicting reports as a mixed bag. During the 2010s, many FAANG tech businesses grew together quarter-after-quarter, causing Wall Street to characterize them as a monolith that moves the overall Stock Market.
But now, as business fortunes among FAANG companies are starting to move in different directions, investors have to look at these companies independently to gleam the economy's direction.
Alphabet earnings are indicative of consumer spending. Its primary business is ads, and if companies are not spending on ads as quickly as before, it could signal that consumers are pulling back on purchases.
Additionally, Alphabet’s major competitor is Tik Tok, a private company that does not report public earnings, making the health of the ad industry challenging to decipher.
On the other hand, Microsoft receives the lion’s share of its revenues from selling services and software to other businesses. Microsoft’s solid earnings and growth in its cloud services show that business demand is still strong, despite a return to the office.
In sum, Wall Street needs more data on company earnings, and it will get it soon, starting with…
Meta reports an earnings beat
Meta, the parent company of Facebook, Whatsapp, and Instagram, beat Wall Street’s estimates after hours today. Meta, which lost nearly 50% of its value at its bottom this year, rallied 9% after hours on the positive news.
Why does this matter?
Changes to Apple’s ad targeting policies and a contracting user base sent Meta’s share price spiraling 26% in February. Today’s report indicates a possible turnaround in business and sentiment for the Company.
Facebook has lagged other FAANG companies since Q1 due to a negative outlook on the company’s ability to grow and find more users. While user growth is still lower than at its peak in Q3 2021, Meta was able to show that it could better monetize its nearly 3 billion users in Q2.
Can Zuck turn it around?
Given Meta’s improving numbers in Q1 2022 compared to Q4 2022, it could mean the company is turning it around. If investors change their minds on Meta, it could provide a tailwind to the major indexes as the company makes up 2% of the NASDAQ composite.
Arpari Intro
A short intro on Arpari (Y Combinator Winter 2022)
Arpari is building verticalized banking for commercial real estate.
Arpari offers a frictionless and comprehensive solution for commercial real estate investors, from bank accounts to property management tools.
Provides clients with lending and high-yield accounts on security deposits
Founders Alex and Toby met at the University of Pennsylvania and spent time at Goldman Sachs and in commercial real estate investing before Arpari.
Further Reading:
CNBC: Facebook shares spike on better-than-expected quarterly earnings
