There were no notes last Saturday. August 1st belongs to my daughter Isabella. Since she passed away 23 years ago, I have never worked on her day.
Three good quarters, three different reactions
I have spent a lot of time on earnings reports lately. It is earnings season, which, next to Christmas time, is my favorite season of the year.
Three companies I watch reported earnings this week. All three had good numbers within their release, but the market responded to each one differently, and this is a point I keep trying to make.
Palantir reported Monday after the close. Revenue came in at $1.935 billion, up 93 percent from a year ago. United States commercial revenue grew 149 percent. Net income was $1.062 billion against roughly $329 million in the same quarter last year. The company raised its guidance for the full year. The stock closed up 29.45 percent the next day on 175 million shares. We could spend a lot of time on this release but let’s move on.
AMD reported Tuesday after the close. Revenue was $11.5 billion, up 50 percent and a company record. Data center revenue was $6.718 billion, up 107 percent, and that segment is now 58 percent of the company. AMD beat on revenue and on earnings. It guided the current quarter above what analysts were looking for. The stock rose 7 percent that day ahead of the release and fell 7.04 percent the day after.
SpaceX reported Tuesday as well. It was its first earnings report as a public company. The stock gained 9.43 percent during the day leading up to the release and gave all of it back and then some on Wednesday.
What separates these three reactions is not the quality of the quarters. It is where each stock stood before the news was delivered to us.
Palantir went into its report down 29 percent for the year. Expectations were lower, so an extraordinary quarter was very well received. AMD went in having gained 7 percent that same day, on top of a strong Monday. There was good news built into the price before any news was released.
A stock price already carries an expectation. Results get measured against that expectation more than against last year. That is how a company can grow revenue 50 percent, double its data center business, beat on every line and still watch the stock fall. None of this holds on the days when something bigger is happening. Good earnings do not save a stock in a market that is falling for reasons that have nothing to do with the company.
By the end of the week Palantir finished up 39.78 percent. AMD finished up 1.51 percent.
One more detail on the AMD number. That 107 percent growth in data center is measured against a quarter last year that included $800 million in inventory and related charges tied to export controls on one of its products. The growth is real. The base it is measured against was low. AMD discloses this in a footnote on the segment table. Measured against the prior quarter rather than the prior year, data center revenue grew 16 percent.
SpaceX gave the cleanest version of the same idea. A portion of insider shares became free to sell on Thursday, the first of several such dates following the June offering. That date was on the calendar and had been written about for weeks. The stock rose 15.83 percent on Friday, the day after.
I wrote How to Read an Earnings Release recently. If this week made you want the longer version, that one is for you.
Bad news on jobs, and a record close
The week finished up across the board. The Dow gained 2.96 percent, the S&P 500 gained 3.58 percent, and the Nasdaq gained 5.19 percent. The S&P closed on Friday at 7,757.64, which was an all-time high for a close.
Monday and Tuesday were nicely up. The Dow gained 693 points Monday and 907 points Tuesday, driven by earnings and by talk from the administration that a deal to reopen the Strait of Hormuz was days away. Oil fell on that talk. Wednesday and Thursday gave part of it back. Some of that was likely folks taking some profit from the first of the week along with doubt about the Iran deal actually happening. That deal has still not arrived as I write this post. Iran wants to charge a fee for passage. The United States wants the arrangement that existed before the war. These are very different stances and they do not suggest a deal is near.
Then Friday brought the July jobs report, and it was bad. The economy lost 23,000 jobs in a month when economists expected something closer to 83,000 added. Revisions took more than 100,000 jobs off the two months before that. Unemployment came in at 4.1 percent.
The market went up. If you are new to investing, get used to this. Bad news is sometimes good news for your stocks.
This move happened because weak employment makes it less likely the Federal Reserve raises interest rates. The market has spent this year pricing in the possibility of a rate increase, not a cut. Before the jobs report, futures markets put the odds of an increase in September at about 55 percent. After the report, that expectation moved out to December at the earliest.
That is the first item again in a different setting. Markets move on the expectation of a Federal Reserve decision rather than on the decision itself, which is part of why the Fed funds rate is not the thing that sets your mortgage. I wrote about that in Why Your Mortgage Rate Doesn’t Move When the Fed Does.
So a week that opened on a deal that never happened closed on a jobs report nobody wanted, and the market finished at a record.
One more thing……nothing about money
I took Friday off work. Not for the market and not for anything on this site. I had a surprise party to get ready for.
Thalia leaves for LSU shortly. A week later Jaden leaves for Warren Wilson. This was the last full week with everyone under one roof.
Wednesday we all went to see the Odyssey. Thursday night the whole family went to Din Tai Fung at my daughter’s request. Friday was the party. It was fantastic and only a few days removed from Isabella’s Day.
I spent this week watching a market move on a deal that did not happen and a jobs number nobody wanted. None of that is what I will remember about this week.
Blessings Come From the Worst of Times.
See you next Saturday.
Christopher
Weekly Notes — August 29, 2026