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Mid-Week Wrap-Up - February 26th, 2025

Mid-Week Wrap-Up - February 26th, 2025

Markets under pressure, can Nvidia save the day?

CMG Venture & Mark Roussin
February 26, 2025

In partnership with

Good morning investors!

If this is your first time reading, welcome to The Investor’s Edge — a thriving community of over 22,000 subscribers striving to be better investors with an edge in the market.

Every Wednesday we publish “The Mid-Week Wrap-Up” — your ticket to being well informed and staying ahead in the investment game!

This report is designed to help investors of all skill levels break down important stories/topics within the stock market. And best of all, we cut through all of the BS and give you exactly what you need to know in easy to digest, bite sized pieces of content.

This article is designed to truly give you that EDGE in the day ahead!

Grab your afternoon pick me up and let’s dive in.

Market Talk

The Dow Jones is the sole bright spot as the tech sell-off weighs on the overall market.

3 Stories Moving the Market

These are some of the biggest stories so far this week that are having an influence on market action.

Berkshire shares rise on surge in operating earnings, but questions linger about cash

Berkshire Hathaway reported a 71% surge in Q4 operating earnings to $14.5 billion, driven by strong insurance underwriting profits, which rose 302% to $3.4 billion. Investment gains slowed sharply to $5.2 billion from $29.1 billion a year earlier.

Berkshire sold more equities than it bought for the ninth consecutive quarter, reducing its stakes in Apple and Bank of America, and raising its cash pile to a record $334.2 billion.

Despite this, Warren Buffett signaled no change in his investment strategy, maintaining a preference for equities and building cash reserves for future opportunities, citing high valuations as the reason for limited buying. No share buybacks were made in Q4 or early 2025, continuing a buyback halt.

Buffett also expressed confidence in his successor, Greg Abel, praising his investment acumen.

👉 EDGE ALERT: Berkshire Hathaway was one of our Quick Picks this month. The stock is nearly +5% since we made the purchase. Meanwhile, Alibaba is +41% and our total gain is +10.3% for the month:

👉 EDGE TAKEAWAY: Berkshire…upgrade to Edge+ to read the full Edge Alert.

Home Depot and Lowe’s report earnings, is home improvement turning a corner?

Lowe’s and Home Depot both showed signs of a gradual recovery in the home improvement sector, signaling potential stabilization in consumer spending despite ongoing economic pressures.

Lowe’s reported adjusted earnings of $1.93 per share on flat sales of $18.55 billion, slightly beating expectations. Same-store sales rose 0.2%, the first increase in two years, driven by strong online sales and growth in the contractor business. However, Lowe’s issued cautious guidance, citing continued challenges from high mortgage rates and cautious consumer spending.

Home Depot similarly exceeded expectations, reporting Q4 earnings of $3.44 per share on sales of $35.9 billion, with same-store sales increasing 0.3% year-over-year. Despite the positive results, Home Depot also issued conservative guidance, reflecting pressure from elevated interest rates and cautious consumer behavior.

Both retailers’ results suggest that while high mortgage rates are still impacting big-ticket purchases, consumers are gradually adjusting to the new normal, which could lead to a steady recovery in home improvement spending.

📚 EDGE-UCATION: Why are Home Depot and Lowe's seen as a bellwether for the economy?

Home Depot and Lowe’s are considered bellwethers for the economy because their performance is closely tied to consumer spending, the housing market, and broader economic health.

As the largest home improvement retailers in the U.S., they serve both individual homeowners and professional contractors, making them sensitive to changes in housing trends, interest rates, and consumer confidence.

When people feel financially secure, they are more likely to invest in home renovations, repairs, and big-ticket items, driving sales at these retailers. Conversely, during economic downturns or periods of high interest rates, homeowners tend to delay discretionary projects and move less frequently, impacting sales.

Additionally, the housing market significantly influences their performance, as people often renovate before selling or after buying a new home. Therefore, fluctuations in mortgage rates, home prices, and housing demand directly affect their revenue.

By tracking spending patterns at Home Depot and Lowe’s, investors gain insights into consumer behavior, housing market trends, and overall economic sentiment, making them reliable indicators of economic health and consumer confidence.

GM raises quarterly dividend, initiates $6 billion stock buyback

General Motors is increasing its quarterly dividend by 25% to 15 cents per share and launching a new $6 billion share repurchase program to reward investors amid slowing industry sales and profits.

The dividend hike will begin with the next payout in April, while $2 billion of the buybacks are expected to be completed in Q2.

Despite strong quarterly results and outperforming Wall Street expectations, GM's stock is down over 12% this year, weighed down by plateauing industry sales, regulatory uncertainties, and limited growth opportunities.

GM’s 2025 guidance projects net income of $11.2 billion to $12.5 billion, adjusted EBIT of $13.7 billion to $15.7 billion, and adjusted automotive free cash flow between $11 billion and $13 billion, reflecting confidence in its business strategy despite industry challenges.

📊 EDGE SCORE: Here’s a look at General Motor’s Edge Score - valuations look attractive, growth is returning, and the company is providing value to shareholders:

Want access to your own Edge Scores? Upgrade to Edge+ today and be one of the first to use the dashboard:

In Other News

In this section we'll be curating a selection of news headlines we think you'll find interesting. If a topic catches your eye, click the provided links to read more about it.

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Our goal with Edge Quick Picks is to offer a streamlined, actionable option for investors who want high-quality recommendations without breaking the bank. We’re confident this new tier will help you build long-term wealth while gaining an edge in the market.

As we like to say, price is what you pay, value is what you get. Trust us when we say you’re not getting this much value for the price anywhere else on the Internet. Choose the tier that fits your goals and join the Edge community today!

The Second Half

Nvidia’s earnings and a key inflation report will determine how the market ends the week.

Earnings Reports

Earnings season carries on and tonight is a big one as Nvidia is set to report.

Wednesday 2/19: Nvidia and Salesforce
Thursday 2/20: --
Friday 2/21: --

Here is the calendar of earnings releases scheduled for the rest of the week:

Source: Earnings Whisper

Economic Reports

The Fed’s preferred inflation data is the major economic catalyst this week. We also get initial jobless claims, the GDP report and pending home sales data.

Here is the full calendar of events scheduled for the remainder of the week:

The Investor’s Edge Discord is the place to be!

Before you go, don’t forget to join our Discord server. Members this week got a first row seat to some great trades and a sneak-peek of our Edge Scoring Dashboard.

If you are only reading the newsletter, you are only getting a fraction of the benefits of being an Edge subscriber. Here’s what you’re missing in the Discord:

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Thank you for reading this edition of the Mid-Week Wrap-Up.

Until next time investors!

Mark & Chris

The Investor’s Edge

Disclosure

This is not investing advice. It is very important that you do your own research and make investments based on your own personal circumstances, preferences, goals and risk tolerance.

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