Alphabet Inc. (GOOGL) released its latest quarterly earnings on Tuesday, October 29. The tech titan reported better-than-expected revenue and earnings, causing shares to increase 5% following the earnings release.

The company reported revenue of $88.27 billion, up 15% from $76.69 billion during the same quarter last year. Revenue surpassed analysts expected quarterly revenue of $86.30 billion.

“The momentum across the company is extraordinary,” said Alphabet CEO, Sundar Pichai. “Our commitment to innovation, as well as our long-term focus and investment in AI, are paying off with consumers and partners benefiting from our AI tools. We generated strong revenue growth in the quarter, and our ongoing efforts to improve efficiency helped deliver improved margins.”

Alphabet posted net income of $26.30 billion or $2.12 per adjusted share for the third quarter. This was up from $19.69 billion or $1.55 per adjusted share during the same time last year.

Alphabet, the parent company of Google, reported Google advertising revenue of $65.85 billion for the quarter, up 10.4% from $59.65 billion during the same quarter last year. Within Google advertising revenue, YouTube advertising revenue increased to $8.92 billion compared to $7.95 billion at the same time last year. Google Cloud revenue came in at $11.35 billion, up from $8.41 billion one year ago. Operating income for the quarter was $28.52 billion, up 33.6% year-over-year.

Alphabet Inc. (GOOGL) shares ended the week at $171.29, up 1.5% for the week.

Cheesecake Factory Serves Up Earnings

The Cheesecake Factory, Inc. (CAKE) reported its fiscal third quarter earnings report on Tuesday, October 29. The restaurant company’s shares increased 5% following the release of the report.

Cheesecake Factory posted quarterly revenue of $865.5 million. This was up from $830.2 million reported at the same time last year and slightly below analysts’ expectations of $866.1 million.

“The third quarter was our fourth consecutive quarter of year-over-year top- and bottom-line growth, reflecting our strong operational execution, the benefits of our scale, and the delicious, memorable experiences we offer across our restaurant concepts,” said The Cheesecake Factory CEO, David Overton. “Looking ahead we remain focused on operational excellence, growing profitably and creating long-term, sustainable value into 2025 and beyond.”

For the second quarter, Cheesecake Factory reported net income of $29.99 million or $0.61 per adjusted share. This is up from $17.95 million or $0.37 per adjusted share reported at this time last year.

Cheesecake Factory’s comparable restaurant sales in the third quarter increased 1.6% year-over-year. The company expects to open as many as 22 new restaurants in 2024 consisting of three Cheesecake Factory restaurants, six North Italia restaurants, six to seven Flower Child locations and eight FRC restaurants. The company presently operates a total of 341 company-owned restaurants, along with 34 Cheesecake Factory restaurants that are licensed internationally. The company’s Board of Directors declared a quarterly dividend of $0.27 per share payable on November 26, 2024, for stockholders of record on November 13, 2024.

Cheesecake Factory, Inc. (CAKE) shares closed at $46.22, up 7.9% for the week.

Meta Posts Quarterly Results

Meta Platforms, Inc. (META) posted its third quarter results on Wednesday, October 30. The company’s stock fell 3% following the release, despite reporting growth in revenue and earnings.

Revenue came in at $40.59 billion during the third quarter, up 19% from $34.15 billion at this time last year. The results exceeded analysts’ expectations of $40.29 billion for the quarter.

“This was a good quarter with strong product and business momentum, and with parts of our long-term vision around AI and the future of computing coming into sharper focus,” said Meta CEO, Mark Zuckerberg in an earnings call. “We estimate that there are now more than 3.2 billion people using at least one of our apps each day -- and we are seeing rapid adoption of Meta AI and Llama, which is quickly becoming a standard across the industry. This may be the most dynamic moment that I have seen in our industry, and I am focused on making sure that we build some awesome things and make the most of the opportunities ahead.”

The company reported net income of $15.69 billion for the quarter or $6.03 per diluted share. This is up from $11.58 billion or $4.39 per diluted share in the same quarter last year.

The Menlo Park, California-based social media company’s Family of Apps (FoA) segment, which includes Facebook, Instagram, Messenger and WhatsApp, garnered $40.32 billion during the quarter, up 18.8% from the same quarter in 2023. Within the FoA segment, advertising revenue came in at $39.9 billion during the quarter, up from $33.64 billion the prior year. The company reported 3.29 billion daily active users during the quarter, a 5% year-over-year increase. Meta’s Reality Labs (RL) segment, which includes the company’s virtual and augmented reality products, posted a net loss of $4.4 billion. For the fourth quarter, the company expects revenue to be between $45 billion to $48 billion.

Meta Platform, Inc. (META) shares ended the week at $567.58, down 2.5% for the week.

The Dow started the week at 42,265 and closed at 42,052 on 11/1. The S&P 500 started the week at 5,834 and closed at 5,729. The NASDAQ started the week at 18,648 and closed at 18,240.

U.S. Treasury yields varied early in the week as investors digested a slew of economic data including private payroll data and the consumer confidence index. Yields stayed steady at the end of the week as the latest consumer spending data and employment reports sent mixed signals on the economy.

On Thursday, the Commerce Department announced that the Personal Consumption Expenditure (PCE), which measures the cost of goods and services purchased by U.S. households, rose 0.2% in September, in line with economists’ expectations. Core PCE, which excludes food and energy, increased 0.3% in September and reached an annual increase of 2.7%.

"The suggestion that inflation could tick up a bit more was basically confirmed in today's number, and the sticky part here is the core rate, which continues to move higher," said chief market economist at Spartan Capital Securities, Peter Cardillo. "And that just simply means that the Fed could very well pause at its next meeting. I think the chances of a Fed pause is greater now than ever."

The benchmark 10-year Treasury note yield opened the week of October 28 at 4.25% and traded as high as 4.34% on Thursday. The 30-year Treasury bond opened the week at 4.50% and traded as high as 4.52% on Thursday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment decreased by 12,000 to 216,000 for the week ending October 26. Continuing unemployment claims decreased by 26,000 to 1.86 million. On Friday, the Bureau of Labor Statistics released its monthly jobs report for October which showed an increase of 12,000 jobs, significantly lower than 112,500 economists expected. The report also revised down job growth for August and September to 78,000 and 223,000, respectively.

“Markets can likely park the October jobs report to the side,” said chief global strategist at Principal Asset Management, Seema Shah. “Quite clearly, the hurricane has taken a heavy toll on the numbers, clouding the picture of labor market strength, and so should not impact the Fed’s policy rate path. And yet, a deeper ponder of the numbers suggests that, beneath all the noise and disruption, is a fundamentally slowing labor market.”

The 10-year Treasury note yield finished the week of 10/28 at 4.40%, while the 30-year Treasury note yield finished the week at 4.59%.

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, October 31. The survey showed the 30-year mortgage rate increased for the fifth straight week.

This week, the 30-year fixed rate mortgage averaged 6.72%, up from last week’s average of 6.54%. Last year at this time, the 30-year fixed rate mortgage averaged 7.76%.

The 15-year fixed rate mortgage averaged 5.99% this week, up from last week’s 5.71%. During the same week last year, the 15-year fixed rate mortgage averaged 7.03%.

“Increasing for the fifth consecutive week, mortgage rates reached their highest level since the beginning of August,” said Freddie Mac’s Chief Economist, Sam Khater. “With several potential inflection points happening over the next week, including the jobs report, the 2024 election, and the Federal Reserve interest rate decision, we can expect mortgage rates to remain volatile. Although uncertainty will remain, it does appear mortgage rates are cresting, and we do not expect them to reach the highs that we saw earlier this year.”

Based on published national averages, the savings rate was 0.45% as of 10/21. The one-year CD averaged 1.81%.

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