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Coffee With Greta: Roku’s BIG Revenue Miss


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DJIA Futures: +42 (+0.1%)

SPX Futures: +7 (+0.1%)

NASDAQ Futures: +23 (+0.2%)

Good morning friends!

Futures are slightly higher after the market tumbled Thursday with the Dow suffering its worst drop of 2022.

Let’s get right to it!

Roku Plunges After Disappointing Q4

Roku (ROKU) shares are tumbling 27.2% ahead of the open after the company reported slower than expected revenue growth.

Roku reported adjusted earnings of $0.17 per share on $865.3 million in revenue.

Earnings were ahead of consensus but revenue fell short of analysts’ estimates for $894 million.

Roku’s sales rose 33% year-over-year, a sharp slowdown from 51% in Q3 and 81% growth in Q2.

The company expects that slowdown to continue. 

Roku forecast Q1 revenue of $721 million, implying 25% growth.

The stock is the second largest holding in Cathie Wood’s Ark Innovation ETF (ARKK).

ARKK is down 2.3% in premarket trade.

St. Louis Fed President Reiterates Hawkish Stance

St Louis Fed President James Bullard warned the U.S. is at risk of “out of control” inflation. 

In a panel discussion at Columbia University, Bullard repeated his calls to “front-load” rate hikes with a full percentage increase by July 1.

He said, “the Fed should move faster and more aggressively than we would have in other circumstances.”

CME Group’s FedWatch Tool now shows 69% of traders expect a 0.25% rate hike at the March meeting, 93% expected a 0.5% hike just a week ago.

Russia-Ukraine Tensions Escalate

The market is continuing to monitor the tensions between Russia and Ukraine as the U.S. calls for a diplomatic solution. 

Ukraine has accused pro-Russian rebels of attacking a village near the border on Thursday. 

Russia is continuing to demand the removal of all NATO and U.S. troops from Eastern Europe. 

President Biden told reporters Thursday it appears Russia is engaged in a “false flag operation” and it is likely Moscow will invade Ukraine “in the next several days”.

The VanEck Russia ETF (RSX) tumbled 5.2% on Thursday and is down 1.9% ahead of the open.

Senate Avoids Government Shutdown

The Senate passed a short-term funding bill in a 65-27 vote Thursday to avoid a government shutdown today.

The legislation will now be signed by Biden and maintains current funding levels through March 11. 

Lawmakers are now hoping to agree on a long-term spending bill which would fund the government through the end of the fiscal year on September 30.

Existing Home Sales Preview

The National Association of Realtors reports existing home sales for January at 10:00 a.m. ET.

Consensus estimates are for sales to fall to a seasonally adjusted annual rate of 6.10 million units from 6.18 million in December.

Homebuyers have been squeezed by high prices due to low supply with demand at record highs. 

Rising mortgage rates have made that affordability issue worse.

No Trading Monday

Next week will be shortened for traders as the markets are closed Monday in observance of Washington’s Birthday. 

There will be no Coffee with Greta that morning but I’ll be back in your inbox Tuesday morning!

In Case You Missed It

  • Ford’s (F) Mustang Mach-E beat out Tesla’s (TSLA) Model 3 as Consumer Reports’ top EV pick in 2022. The group said the Mach-E is better when it comes to self-driving and ensuring the driver remains alert. Tesla fell seven spots to 23rd out of 32 major auto brands on the list.

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