McDonald's Corporation (MCD) released its latest quarterly earnings on Monday, July 29. Despite the fast-food conglomerate posting decreased revenue and income for the quarter, shares were up almost 4% following the release of the report.

The company reported revenue of $6.49 billion for the quarter. This was down from $6.50 billion compared to the prior year's quarterly revenue and missed analysts' expectations of $6.61 billion.

"We are confident that Accelerating the Arches is the right playbook for our business and as consumers are more discriminating with their spend, we are focused on the outstanding execution of delivering reliable, everyday value and accelerating strategic growth drivers like chicken and loyalty," said McDonald's CEO, Chris Kempczinski.

Net income for the quarter came in at $2.02 billion or $2.80 per adjusted share. This was down from $2.31 billion or $3.15 per adjusted share during the same quarter last year.

During the quarter, McDonald's experienced decreased sales across all of its business segments, causing global comparable sales to decrease 1.0%. U.S. comparable sales decreased 0.7%, which was driven by negative comparable guest counts and partly offset by average check growth due to menu price increases. International Operated Markets were also impacted by negative comparable sales which resulted in a 1.0% decline. The company's systemwide sales also decreased by 1.0%.

McDonald's Corporation (MCD) shares ended the week at $276.69, up 9.4% for the week.

Microsoft Releases Quarterly Report

Microsoft Corp. (MSFT) released its fourth quarter and full year earnings report on Tuesday, July 30. Although the multinational technology corporation reported revenue and income that beat analysts' expectations, shares fell nearly 8% following the release of the report.

Microsoft reported $64.73 billion in quarterly revenue. This was up 15% from revenue of $56.19 billion at the same time last year and exceeded analysts' estimates of $64.5 billion. For the full year, revenue came in at $245.12 billion, an increase from $211.92 billion one year ago.

"Our strong performance this fiscal year speaks both to our innovation and to the trust customers continue to place in Microsoft," said Microsoft CEO, Satya Nadella. "As a platform company, we are focused on meeting the mission-critical needs of our customers across our at-scale platforms today, while also ensuring we lead the AI era."

Microsoft posted net income of $22.04 billion or $2.95 per adjusted share for the fourth quarter. This was an increase from net income of $20.08 billion or $2.69 per adjusted share reported at this time last year. For the full year, the company's net income was $88.14 billion.

Microsoft experienced strong growth for the fourth quarter, with an increase in revenue for most segments. Microsoft's Intelligent Cloud revenue saw a 19% increase year-over-year to $28.5 billion, primarily driven by Azure and other cloud services revenue growth of 29%. The company's Productivity & Business Processes revenue rose by 11% to $20.3 billion, while More Personal Computing revenue came in at $15.9 billion, up 14% from this time last year. For fiscal year 2025, the company expects double-digit growth in both revenue and operating income.

Microsoft Corp. (MSFT) shares ended the week at $408.49, down 5.3% for the week.

Starbucks Brews Weak Earnings

Starbucks Corporation (SBUX) reported its quarterly financial results on Tuesday, July 30. While the coffeehouse chain reported decreased revenue and earnings, its shares increased by more than 5% following the release of the report.

The company reported third-quarter net revenue of $9.11 billion, down slightly from $9.17 billion reported in the same quarter last year. This fell below analysts' expected revenue of $9.24 billion.

"Our three-part action plan is beginning to work and driving operational improvements that we expect to improve financial performance," said Starbucks CEO, Laxman Narasimhan. "Our growing culture of focused innovation and relentless execution continues to enhance our capabilities, while helping return the business to sustainable growth."

Starbucks' net income for the quarter was $1.05 billion or $0.93 per adjusted share. This was down from $1.14 billion or $0.99 per adjusted share in the same quarter last year.

Starbucks opened 526 new stores in the third quarter and ended the period with 39,477 stores in total. Comparable store sales in North America decreased by 2% and international comparable sales decreased by 7%, which were both attributed to a decline in comparable transactions. Active U.S. Rewards Membership reached 33.8 million in the third quarter, up 7% year-over-year. The company declared a quarterly cash dividend of $0.57 per share. The cash dividend will be due to the stockholders of record on August 16, 2024, with an anticipated payment date of August 30, 2024.

Starbucks Corporation (SBUX) shares ended the week at $75.88, up 1.8% for the week.

The Dow started the week at 40,666 and closed at 39,737 on 8/2. The S&P 500 started the week at 5,477 and closed at 5,347. The NASDAQ started the week at 17,444 and closed at 16,776.

U.S. Treasury yields varied throughout the week as investors responded to the latest comments from the Federal Reserve regarding potential interest rate cuts. Yields fell on Friday as investors reacted to the latest jobless claims revealing applications for unemployment benefits reaching an 11-month high.

On Wednesday, the Federal Reserve voted to hold rates steady at a two-decade high range of 5.25% and 5.5%. In making the decision, the Fed noted that rate cuts may come as soon as September if inflation continues to progress towards the committee's 2% inflation goal. If the Fed decides to cut rates, it will be the first rate cut experienced in the last four years.

"The broad sense of the committee is that the economy is moving closer to the point where it would be appropriate to reduce our policy rate," said Fed chairman Jerome Powell. "A reduction in our policy rate could be on the table as soon as the next meeting in September."

The benchmark 10-year Treasury note yield opened the week of July 29 at 4.20% and traded as low as 3.97% on Thursday. The 30-year Treasury bond opened the week at 4.45% and traded as low as 4.25% on Thursday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment increased by 14,000 to 249,000 for the week ending July 27. Continuing unemployment claims increased by 33,000 to 1.88 million.

"The claims data of the past few weeks have been signaling incremental labor market weakness, albeit from a position of strength," said U.S. economist, Thomas Simons. "This is another step in the process of the labor market coming into better balance, but we must remain vigilant in watching for signs of slack."

The 10-year Treasury note yield finished the week of 7/29 at 3.79%, while the 30-year Treasury note yield finished the week at 4.11%.

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, August 1. The survey showed mortgage rates falling to the lowest levels since February.

This week, the 30-year fixed rate mortgage averaged 6.73%, down from last week's average of 6.78%. Last year at this time, the 30-year fixed rate mortgage averaged 6.90%.

The 15-year fixed rate mortgage averaged 5.99% this week, down from 6.07% last week. During the same week last year, the 15-year fixed rate mortgage averaged 6.25%.

"Mortgage rates declined to their lowest level since early February," said Freddie Mac's Chief Economist, Sam Khater. "Expectations of a Fed rate cut coupled with signs of cooling inflation bode well for the market, but apprehension in consumer confidence may prevent an immediate uptick as affordability challenges remain top of mind. Despite this, a recent moderation in home price growth and increases in housing inventory are a welcoming sign for potential homebuyers."

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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