Here’s how Eli Lilly might bring a game-changing Alzheimer’s drug to market

During the interview, Skovronsky talked about a different path ahead for much less expensive weight-loss drugs. He also said he was ” extremely optimistic” about Lilly’s experimental treatment for Alzheimer’s disease, which is going through clinical trials.

More of the MarketWatch 50:

Earnings season can be brutal

Each quarterly earnings season features myriad headlines about companies whose results beat analysts’ consensus estimates for sales and earnings. You can expect a roughly 70% “beat rate” every quarter. Over the long term, a “beat and raise” pattern, with consensus estimates rising following the earnings reports, can support rising stock prices.

But there are always exceptions. A company might miss the expectations of analysts, even after lowering the bar with its previous guidance. Or a company might be forced to reduce its stated outlook because of operational difficulties or a changing market. Here are some examples from this week:

Shares of Warner Bros. Discovery Inc.
WBD,
+4.36%
plunged 19% on Wednesday after the company warned that it will not be able to pay down debt as quickly as it had planned if the TV advertising market doesn’t recover. Another factor that may have upset investors was a 700,000 decline in direct-to-consumer subscriptions.

Warner Bros. Discovery CEO David Zaslav said during the company’s earnings call that the subscription decline was tied to “one of our lightest original-content schedules in years,” partly resulting from the Hollywood actors strike, which ended Thursday.

The company had $44.8 billion in total debt as of Sept. 30, down from $52.6 billion at the end of 2022. During the call, Zaslav said: “While paying down debt and de-levering will remain a top priority for us, we’re also now in a position to allocate more capital towards growth opportunities.”

WBD in its current form was created on April 8, 2022, when AT&T Inc.
T,
-0.32%
divested WarnerMedia, which was merged with Discovery Inc. Here’s a chart for the combined company’s stock price since that date:

More examples of difficult earnings reports this week:

Earnings season and IPO buyers’ remorse

There was a long period during which low interest rates helped support many initial public offerings, with shares often soaring on the first day of trading. That has changed, with a slow trickle of companies going public and a tepid response in the stock market. Earnings season has underscored the regrets among investors who jumped in early for several IPOs, including Arm Holdings PLC
ARM,
+0.52%,
Klaviyo Inc.
KVYO,
+1.08%
and Instacart
CART,
+3.15%.

A different earnings-season tone from Disney

Investors were in a better mood after Walt Disney Co.
DIS,
-2.81%
reported its third-quarter results, including a large increase in Disney+ streaming subscriptions. The company’s stock rose 7% on Thursday for its best performance in almost three years, as analysts reacted positively to Disney CEO Bob Iger’s cost-cutting initiatives and the increasing profitability with price increases.

Disney’s stock was still down 48% from two years earlier, with dividends reinvested, according to FactSet.

Therese Poletti: Disney CEO Bob Iger is getting his hands dirty as he focuses on studio woes — will be it enough?

Positive reactions to other companies’ earnings news:

New tax rules and advice for tax planning

Andrew Kesher explains changes in tax brackets and rules for 2024:

Beth Pinsker explains how to use the latest information from the IRS to lower your 2024 tax bill.

Stock picks

When you see how people suffer from hurricanes or floods, you might wonder why anyone would choose to live in the affected areas. Michael Brush explains how to profit from peoples’ location preferences over the long term.

More about stocks:

• Three value-stock picks from a veteran manager with a good performance record
• Five potential takeover targets in the oil industry, following deals by Exxon Mobil and Chevron

Retirement planning

Alessandra Malito writes the Help Me Retire column. This week she assists a woman whose brother is 60 and has applied for Social Security disability benefits but still wants to contribute to a retirement account.

More about retirement and related planning:

• My husband leaves retirement-investing plans to me. How do I hire the right adviser?
• Medicare’s Meena Seshamani answers your questions about open enrollment

Stock market bulls and bears

You may already be aware that the tech-oriented “Magnificent Seven” stocks — Apple Inc.
AAPL,
+1.81%,
Microsoft Corp.
MSFT,
+2.21%,
Alphabet Inc.
GOOGL,
+1.60%,
Amazon.com Inc.
AMZN,
+1.75%,
Nvidia Corp.
NVDA,
+2.53%,
Meta Platforms Inc.
META,
+1.97%
and Tesla Inc.
TSLA,
+1.90%
— have been responsible for most of the S&P 500’s
SPX
15% gain this year. This is because the benchmark index is weighted by market capitalization.

The three-year chart for the S&P 500 information-technology sector, above, shows a feast-and-famine pattern, with a bit of a rough ride recently.

But there are signs that technology stocks may rally through the end of 2023, as Joseph Adinolfi reports. And on Friday, he pointed to another bullish indicator.

But there is never a shortage of warnings about financial markets. Here’s a sampling:

You too can be a mortgage lender

In the Big Move column, Aarthi Swaminathan answers questions from a man who is renting out a house that he has owned for a long time. Now he wants to sell, and the renters want to buy the home. With interest rates so high, should he considering being the mortgage lender?

More housing coverage:

A big bounceback in the stock market, and 13 candidates for recovery in 2024

Mark Hulbert points out that Salesforce Inc.
CRM,
+1.62%
— last year’s worst performer among the 30 components of the Dow Jones Industrial Average
DJIA
— has been this year’s best-performing stock in the venerable index.

Among this year’s worst-performing stocks in the S&P 500, here are Hulbert’s 13 candidates for recovery in 2024.

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