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Coffee With Greta: Walmart Pops, Nvidia Slips


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DJIA Futures: -121 (-0.4%)

SPX Futures: -20 (-0.4%)

NASDAQ Futures: -78 (-0.5%)

Good morning friends!

Futures are lower as the market digests some key earnings.

Let’s get right to it!

Walmart Pops on Strong Earnings

Walmart (WMT) shares are up 1.5% ahead of the open after the retailer beat Q4 expectations on the top and bottom line.

The company reported adjusted earnings of $1.53 per share on $152.87 billion in revenue.

That beat analysts' expectations for adjusted EPS of $1.50 on $151.53 billion in revenue.

Walmart's earnings show the retailer had a strong performance over the holidays.

Same-store sales in the U.S. rose 5.6%, in-line with expectations.

Walmart hiked its quarterly dividend to $0.56 per share and said it plans to repurchase $10 billion of its stock in fiscal 2023.

Nvidia Crushes Q4 Expectations

Nvidia (NVDA) shares are down 2% in premarket trade despite reporting a record-breaking fourth quarter.

The chipmaker reported adjusted earnings of $1.32 per share on $7.64 billion in revenue.

That was higher than analysts’ expectations for EPS of $1.22 on $7.42 billion in revenue. 

Nvidia’s profits were up 69% year-over-year, while revenue jumped 53%.

The company’s gaming business remains its biggest revenue generator. 

Sales in that division rose 37% year-over-year to $3.42 billion in Q4, driven by sales of its GeForce graphics processors. 

Nvidia’s data center sales jumped 71% annually to $3.26 billion, while professional visualization sales surged 109% to $643 million. 

Automotive chip sales fell 14% year-over-year to $125 million amid continued supply constraints for global automakers.

The company also had strong Q1 guidance, forecasting $8.10 billion in sales vs the consensus estimate for $7.29 billion.

Nvidia also has $9 billion in long-term supply obligations, up from $2.54 billion a year ago.

DoorDash Users Hit Record-High

DoorDash (DASH) shares are surging 21.5% ahead of the open after reporting record-high user numbers in Q4 even as restaurants reopened.

The delivery app reported a steeper profit loss than expected, at $0.45 per share vs the $0.25 loss analysts were expecting. 

But $1.3 billion in revenue came in higher than estimates for $1.28 billion. 

The company’s gross-order value jumped 36% year-over-year to $11.2 billion. 

That was ahead of analysts’ projections for $10.6 billion. 

DoorDash also had 369 million total orders last quarter vs consensus estimates for 361 million.

The company forecast gross-order value this year will range between $48 billion and $50 billion, in-line with analysts’ projections of $49.4 billion.

Weekly Jobless Claims Rise Unexpectedly

The Labor Department reported 248,000 Americans filed initial claims for unemployment benefits last week.

That was up 23,000 from the previous week and higher than expectations for claims to fall to 218,000.

It's the first time claims have risen in a month.

Continuing jobless claims fell more than expected to 1.59 million down about 26,000 from the previous week and better than expectations for 1.62 million.

Housing Construction Stumbles

U.S. home construction pulled back in January as builders struggle with supply chain issues. 

The Census Bureau reported housing starts fell 4.1% at the beginning of the year, to a seasonally adjusted annualized rate of 1.638 million units.

That was a steeper drop than economists' expectations for a SAAR of 1.69 million units.

Single-family starts tumbled 5.6% while multi-family starts fell 2.1%.

But permitting activity beat expectations, signaling the pullback in homebuilding may be short-lived.

New permits approved in January were at an SAAR of 1.899 million, up 0.7% from December and higher than economists' forecasts for 1.75 million.

Homebuilder sentiment fell 1 point on Wednesday to 82, declining for the second straight month as builders struggle with supply.

The average size of a 30-year mortgage in the U.S. also hit a new record high at $453,000 this week.

And the average 30-year mortgage rate popped above 4% for the first time since 2019. 

Higher rates are expected to squeeze more buyers out of the market who are already struggling with high prices.

In Case You Missed It

  • The Fed’s January meeting minutes told us what we already know, the bank is ready to raise rates and shrink its balance sheet. But the readout didn’t provide much detail about how many rate hikes officials expect this year. FOMC participants agreed this tightening cycle should be faster than the last and said they will assess moves on a meeting-by-meeting basis. 
  • The VanEck Oil Services ETF (OIH) jumped to the highest level in more than two years Wednesday as tensions simmer between Russia and Ukraine. The fund closed 2.3% higher at $248.54 and is up 34.5% YTD. The jump in energy prices comes amid continued tensions between Russia and Ukraine. U.S. officials confirmed Thursday that Russia had increased its troop presence at the Ukraine border by 7,000 in recent days. That contradicts Moscow’s previous claim it was pulling troops back.

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