The Coca-Cola IPO in 1919 was a massive opportunity—if you held on. If you had bought one share of Coca-Cola during its initial public offering (IPO) in 1919 for $40, and reinvested dividends along the way, that single share would be worth over $10 million today! This shows the incredible power of long-term investing in quality companies with consistent growth and dividends.
Market Wrap
On Friday, January 24, 2025, U.S. stock markets experienced modest declines, concluding a two-week winning streak. The day's downturn was primarily influenced by mixed economic data and corporate earnings reports. Notably, Texas Instruments' weaker-than-expected profit outlook led to a 7.5% decline in its stock, which in turn affected other semiconductor companies.
In terms of economic data, the S&P Global Flash U.S. Composite PMI fell to 52.4 in January from 55.4 in December, marking a nine-month low. This decline was driven by a slowdown in the services sector, while manufacturing activity saw a slight uptick. Additionally, the University of Michigan's consumer sentiment index decreased to 71.1, below previous estimates, indicating potential concerns about future economic conditions.
Despite these challenges, the major indexes posted gains for the week, with the S&P 500 up 1.7%, the Dow increasing by 2.2%, and the Nasdaq rising by 1.7%.
Novo Nordisk's shares jumped 8.3% following positive results from a trial of its amycretin obesity treatment. The promising data boosted investor confidence in the company's expanding portfolio of weight-loss therapies.
American Express shares fell 1.4% after reporting fourth-quarter results that were mostly in line with analysts' expectations. Despite meeting projections, the lack of an earnings surprise led to a modest decline in the stock price.
Intuitive Surgical dropped 4% despite topping quarterly sales and profit forecasts, due to currency headwinds and projections of slower procedure growth in 2025. The company also indicated that its adjusted gross profit margin could decline, adding to investor concerns.
Texas Instruments declined 7.5% after issuing a weaker-than-expected profit outlook. This soft forecast raised concerns about a potential slower recovery in the analog chip market, leading to declines in shares of other semiconductor companies.
NextEra Energy rose 5.2% after announcing a partnership with GE Vernova to develop energy projects combining natural gas and renewable sources like solar and battery storage. The partnership aims to power AI data centers and other energy-intensive facilities.
Boeing's shares fell 1.4% due to a wider-than-expected projected loss for the fourth quarter. The company attributed the loss to a nearly two-month strike that disrupted production, raising concerns about its near-term profitability.
Welltower gained 3.4% following an upgrade from Bank of America, which raised its price target for the real estate investment trust. Analysts highlighted the value of Welltower's senior housing properties, anticipating benefits from demographic shifts toward an aging population.
Twilio's stock surged 20% after the company preannounced its fourth-quarter results, indicating an 11% revenue increase and earnings guidance that surpassed analysts' expectations. The company's emphasis on integrating artificial intelligence into customer engagement solutions also contributed to investor optimism.
CF Industries fell 7.5% after JPMorgan downgraded it to 'underweight' and lowered its price target. The downgrade was due to anticipated increases in natural gas prices, a key input for nitrogen fertilizer production, and potential shifts in the agriculture industry impacting demand.
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