Albertsons Companies, Inc. (ACI) reported its first quarter earnings on Tuesday, July 23. The company reported increased revenue but lower-than-expected earnings, causing the grocer's stock to remain relatively unchanged after the release of the report.

The company reported net sales of $24.3 billion for the quarter. This is up from $24.1 billion reported at the same time last year and ahead of analysts' estimates of $24.2 billion.

"In the first quarter of fiscal 2024, we continued to invest in our Customers for Life strategy and the digital and omnichannel capabilities necessary to support it," said Albertsons' CEO, Vivek Sankaran. "As we look ahead to the balance of fiscal 2024, we expect to see continuing headwinds related to investments in associate wages and benefits, an increasing mix of our pharmacy and digital businesses which carry lower margins, and the cycling of prior year food inflation. We expect these headwinds to be partially offset by ongoing productivity initiatives."

The company reported net income of $240.7 million or $0.41 per adjusted share. This was a decrease from the same quarter last year when Albertsons reported net income of $417.2 million or $0.72 per adjusted share.

Albertsons' boost in net sales was driven by the company's 1.4% increase in identical sales which the company attributed to strong growth in pharmacy sales and partially offset by lower fuel sales. Digital sales increased by 23% and the number of loyalty members grew by 15% to 41.4 million members. Albertson's gross margin rate increased to 27.8% during the first quarter from 27.7% year-over-year. The company's selling and administrative expenses increased 79 basis points to 25.9% of net sales and other revenue compared to 25.0% the prior year.

Albertsons Companies, Inc. (ACI) shares ended the week at $20.45, up 2% for the week.

General Motors Drives Up Earnings

General Motors Company (GM) reported second quarter earnings on Tuesday, July 23. The automaker's stock fell 6% following the release despite reporting better-than-expected revenue for the quarter.

General Motors announced revenue of $47.97 billion for the quarter, up 7% from $44.75 billion at this time last year. Revenue beat analysts' expectations of $45.13 billion.

"Great vehicles and better execution will continue to differentiate us," said General Motors CEO, Mary Barra in a letter to shareholders. "In SUVs, we are in the process of launching eight all-new or redesigned compact, mid-size and full-size ICE models in North America, including high volume vehicles like the Chevrolet Equinox and our family of mid-size SUVs, which all have higher margins than the outgoing models. As excited as we are about our EVs and our early success, we are committed to disciplined volume growth, which is the key to earning positive variable profits from our portfolio in the fourth quarter, which remains our goal."

General Motors reported quarterly net income of $2.93 billion or $3.06 per adjusted share. This was up from $2.57 billion or $1.91 per adjusted share during the same quarter last year. The automotive manufacturing company's North America segment saw second quarter revenue increase to $40.73 billion, up from $37.22 billion year-over-year. General Motors' international segment reported revenue of $3.30 billion, down from $3.96 billion in the prior year. The company sold 1.4 million vehicles worldwide in the quarter, an 11% decrease year-over-year. General Motors revised its full-year guidance for fiscal 2024 and expects income between $10.0 billion to $11.4 billion, down from previous guidance of $10.1 billion to $11.5 billion.

General Motors Company (GM) shares ended the week at $44.12, down 9% for the week.

Alphabet Posts Quarterly Results

Alphabet Inc. (GOOGL) released its latest quarterly earnings on Tuesday, July 23. Despite the tech titan's revenue exceeding expectations, its shares fell about 2% following the earnings release.

The company reported revenue of $84.7 billion, up 14% from $74.6 billion during the same quarter last year. Revenue surpassed analysts' expected quarterly revenue of $84.2 billion.

"Our strong performance this quarter highlights ongoing strength in Search and momentum in Cloud," said Alphabet CEO, Sundar Pichai. "We are innovating at every layer of the AI stack. Our longstanding infrastructure leadership and in-house research teams position us well as technology evolves and as we pursue the many opportunities ahead."

Alphabet posted net income of $23.6 billion or $1.89 per adjusted share for the second quarter. This was up from $18.4 billion or $1.44 per adjusted share during the same time last year.

Alphabet, the parent company of Google, reported Google advertising revenue of $64.62 billion for the quarter, up from $58.14 billion during the same quarter last year. YouTube advertising revenue, which is included as part of the Google advertising revenue, increased to $8.66 billion from $7.67 billion at the same time last year. Google Cloud revenue came in at $10.35 billion, up from $8.03 billion one year ago. Operating income for the quarter was $27.43 billion, up 26% from one year ago.

Alphabet Inc. (GOOGL) shares ended the week at $167.00, down 8% for the week.

The Dow started the week of 7/22 at 40,414 and closed at 40,589 on 7/26. The S&P 500 started the week at 5,545 and closed at 5,459. The NASDAQ started the week at 17,924 and closed at 17,358.

U.S. Treasury Yields rose early in the week as investors waited for the latest economic data. Yields moved lower on Friday as investors assessed conflicting signals from the U.S. economy and its impact on next week's Federal Reserve meeting.

On Thursday, the Commerce Department's Bureau of Economic Analysis announced that the Gross Domestic Product (GDP), a measure of the value of all the final goods and services produced in a given time period, increased 2.8% in the second quarter of 2024, an increase from 1.4% for the first quarter of 2024. This was above economists' expectations of a 1.9% growth.

"We think [the second quarter] will end up being the best quarter for the economy this year," said economist at Nationwide, Oren Klachkin. "We should receive cooler GDP reports from here on out as consumers tighten their purse strings and businesses become more reticent to invest and hire."

The benchmark 10-year Treasury note yield opened the week of July 22 at 4.24% and traded as high as 4.30% on Thursday. The 30-year Treasury bond opened the week at 4.45% and traded as high as 4.55% on Thursday.

On Wednesday, the U.S. Department of Labor reported that initial claims for unemployment decreased by 10,000 to 235,000 for the week ending July 20. Continuing unemployment claims increased by 9,000 to 1.85 million.

"Things have cooled off," said chief economist at New Century Advisors, Claudia Sahm. "These things can all be part of good news - we are getting everything back in order and in balance and we can move forward - but...if we have further weakening in demand for workers, we start to see layoff rates move up, we are close enough to the danger zone you are moving into a recession."

The 10-year Treasury note yield finished the week of 7/22 at 4.19%, while the 30-year Treasury note yield finished the week at 4.45%.

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, July 25. The survey showed mortgage rates mostly unchanged compared to the week before.

This week, the 30-year fixed rate mortgage averaged 6.78%, up from last week's average of 6.77%. Last year at this time, the 30-year fixed rate mortgage averaged 6.81%.

The 15-year fixed rate mortgage averaged 6.07% this week, up from 6.05% last week. During the same week last year, the 15-year fixed rate mortgage averaged 6.11%.

"Mortgage rates essentially remained flat from last week but have decreased nearly half a percent from their peak earlier this year," said Freddie Mac's Chief Economist, Sam Khater. "Despite these lower rates, buyers continue to pause, as reflected in tumbling new and existing home sales data."

Based on published national averages, the savings rate was 0.45% as of 7/15. The one-year CD averaged 1.85%.

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