U.S. markets close in 2 hours 33 minutes
  • S&P 500

    4,516.54
    +30.08 (+0.67%)
     
  • Dow 30

    35,429.50
    +170.89 (+0.48%)
     
  • Nasdaq

    15,130.61
    +108.80 (+0.72%)
     
  • Russell 2000

    2,282.48
    +14.64 (+0.65%)
     
  • Crude Oil

    83.70
    +1.26 (+1.53%)
     
  • Gold

    1,769.30
    +3.60 (+0.20%)
     
  • Silver

    23.89
    +0.63 (+2.69%)
     
  • EUR/USD

    1.1644
    +0.0026 (+0.22%)
     
  • 10-Yr Bond

    1.6280
    +0.0440 (+2.78%)
     
  • GBP/USD

    1.3808
    +0.0081 (+0.59%)
     
  • USD/JPY

    114.2310
    -0.0810 (-0.07%)
     
  • BTC-USD

    63,336.48
    +1,392.76 (+2.25%)
     
  • CMC Crypto 200

    1,469.48
    +6.13 (+0.42%)
     
  • FTSE 100

    7,217.53
    +13.70 (+0.19%)
     
  • Nikkei 225

    29,215.52
    +190.06 (+0.65%)
     
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

BlackRock beats Q3 estimates, Apple reportedly scales back production due to chip shortage, Qualcomm's $10 billion buyback plan

In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Yahoo Finance's Brian Sozzi and Julie Hyman break down how Blackrock, Apple, and Qualcomm are faring in Wednesday's market.

Video Transcript

JULIE HYMAN: We're just getting warmed up here with earnings season. We're talked about JP Morgan and Delta numbers but we're not done. BlackRock reported its numbers as well this morning, assets under management down slightly to $9.46 trillion. As you see there, the company is earnings per share and revenue did beat estimates.

And CEO Larry Fink has really emphasized ESG for BlackRock, and that's something he talked about in the company's statement as well. Demand for ESG remains strong with $31 billion of inflows across our sustainable active and index strategies.

Although when you're talking about $31 billion of inflows and the company's overall assets under management are $9.46 trillion, you see there that there's still a long ways to go when it comes to ESG strategies for the company and for the industry more broadly.

Nonetheless, this like what we saw, to some extent for JPMorgan, even though assets under management fell slightly, still illustrates the sort of robustness of people investing right now and not just people but pension funds and asset management, asset managers and the like Brian.

BRIAN SOZZI: Yeah. We also saw that within J.P Morgan's Wealth Management business, I mean, sales in that business up 21% year over year but, look at BlackRock's stock price, it's up about 2.5% in the pre-market, JP Morgan a little under pressure, Delta under pressure. So, so far to kick off this earnings season, BlackRock is the winner, the market likes what it is hearing from a BlackRock it is the third trending ticker on the Yahoo Finance platform right now.

Now, if I did have to throw any red flag on this quarter, it's on costs and it's a drum I will continue to beat this earnings season. Operating margins for BlackRock, 45.8% in the most recent quarter, 47% last year. Whether that's having to pay people more, it costing more to keep the lights on at their various headquarters. Whatever it is, there's inflation there in these investment banks and asset managers like BlackRock and it showed up in their profit margins.

JULIE HYMAN: Yes. Although interestingly, to take the other side of it a little bit, yesterday of course, we talked to an analyst at Jefferies, their head of sustainability strategy who mentioned that maybe we should be looking at those kinds of costs as a feature, not a bug.

In other words, if you are investing in something with human capital, so-called, as one of your criteria, and it's a firm that not only pays well but has a broader corporate culture that is good for employees, that could be a sign you actually want to buy something and you shouldn't be as concerned as concerned perhaps about the margin. So just to flip that on its head a little bit, I thought that was a really interesting point that he made yesterday Brian.

BRIAN SOZZI: I appreciate your upbeatness, can't always be Brian the bear here, you know, I appreciate it.

JULIE HYMAN: All right, let's talk about something though that maybe is not upbeatness this morning, and that was a report that we got on Apple late yesterday. It was a source by Bloomberg citing people familiar with the matter saying the company is likely to slash iPhone 13 production targets for 2021 because of the chip shortage.

Now, Apple as we know has been pretty resistant to that chip shortage, has managed to keep its supply chain pretty intact. That though may be changing, maybe it is not immune to that. So 90 million new iPhones is what the company had projected to manufacture in the last quarter of the year.

But again, according to this report, it's now telling some of its partners that the total is going to be lower, some of its suppliers, like Broadcom, like Texas Instruments are having trouble delivering the components its needs. What's interesting here Brian is you would think that this would be bad news for those Apple shares but we're not seeing that much of a reaction, perhaps because they've pulled back a decent amount already.

BRIAN SOZZI: Surprised you're not seeing a bigger sell off in Apple and it did sell off a little bit more when the news hit the wires a couple of hours ago or yesterday afternoon I believe.

Interesting note though by Goldman Sachs' Rod Hall pointing this out that quote, "It remains our belief that Apple will find it increasingly hard to grow revenues and may well experience declining revenues for a period as the company laps positive COVID effects."

So I know that the stock is not selling off a ton right now but even still, I mean, there are concerns at least for Apple over the next couple of quarters because of these supply chain disruptions.

JULIE HYMAN: Yes, most definitely. It's something we should continue to watch and continue to watch those components suppliers and those manufacturing partners for Apple, like the chip makers I mentioned and a broader swath of them as well. We got the opening bell here this morning coming up in about 10 seconds. And Ashford is ringing the opening bell this morning, it's the hospitality and travel company, so they're ringing.

Maybe we have some of those early indications and some of those chip makers we were talking about to see how they are trading as we get underway here this morning, even if Apple itself was not feeling a big negative effect. I know that yesterday we saw Micron shares, for example, sell off. By the way, our opening bell coverage is brought to you by PIMCO.

And then in terms of some of the others, speaking of chipmakers, we're also watching Qualcomm and that's because that company announced a new buyback authorization, $10 billion worth. I know you saw some research about Qualcomm as well this morning.

Yeah, Qualcomm really dropping the hammer here on the stock buyback, wow. But look, yeah, good note out of Deutsche Bank talking about this buyback, really voicing their confidence in Qualcomm continuing to focus on diversifying its revenue.

We've talked to new CEO, Cristiano Amon, a few times and really learning about his efforts to push deeper into the car and other lines of business but the street is liking what it is hearing from Qualcomm that it could return this much, this type of cash to investors even while it diversifies out of its core chip business here, is a good, positive flag. I wouldn't be surprised to see more positive notes off of this development.

JULIE HYMAN: Right. And just looking at some of the chips there, they are not seeing a negative ripple effect from that Apple news, at least not as we get underway this morning, Qualcomm though is trading higher by about 2.3%. And we have in general seen pretty good resilience in terms of the chip stocks in the face of what has been going on for shortages in this environment.

Before we go to break, just want to quickly check on some of the big earnings reports that we covered at the top of the show, namely JP Morgan and Delta. As we talked about JP Morgan coming in, beating estimates as our Brian Cheung outlined for us. It was really on the fee side, on the investment banking side that the company's strength was shown having to do with a lot of mergers and acquisition advisory fees.

On the flip side, the commercial loan growth is still not back in business. And then Delta, that company you can see trading lower by about 2.8%, even though it posted a profit here warned about rising jet fuel costs that could be weighing on the shares. Again, we're going to hear from our Adam Shapiro's conversation with Ed Bastian coming up in just a little bit.