Coffee With Greta: Could Iran Save Oil Prices?
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DJIA Futures: +82 (+0.2%)
SPX Futures: +10 (+0.2%)
NASDAQ Futures: +5 (+0.04%)
Good morning friends!
Futures are up slightly as traders continue to monitor the war in Ukraine.
Let’s get right to it!
Oil Prices Slip on Rumored Iran Deal
UPDATE: CRUDE FUTURES JUST TURNED NEGATIVE AFTER A RUMORED U.S. DEAL WITH IRAN WHICH WOULD ALLOW IRAN TO EXPORT MORE OIL.
This comes after West Texas Intermediate crude futures were trading at a fresh 11-year high above $113 per barrel
Brent crude futures were previously above $116 per barrel, the highest since August 2013.
Wheat futures trading was halted at $11.30 per bushel after hitting limit-up for the third straight day.
More U.S. Sanctions on Russia
The jump in oil prices comes after the U.S. imposed additional sanctions on Russia and Belarus Wednesday.
The White House said these sanctions “will severely limit the ability of Russia and Belarus to obtain the materials they need to support their military aggression against Ukraine, project power in ways that threaten regional stability and undermine global peace and security.”
The actions also include export controls targeting Russia’s oil refining sector which the White House said could help degrade Russia’s “status as a leading energy supplier over time.”
The Biden Administration said it’s not ready to sanction Russian oil as such a move would harm American consumers.
Local officials confirmed the southern Ukrainian city of Kherson is the first major city to be captured by Russia.
Kherson is a key port city along the Black Sea with a population of about 300,000.
Russia continued its attacks on the capital city of Kyiv, the port city of Mariupol, and the northeast city of Kharkiv.
Weekly Jobless Claims Fall
Weekly jobless claims fell more than expected last week.
The Labor Department reported 215,000 Americans filed initial claims for unemployment benefits.
That was down 18,000 from the previous week and better than economists’ expectations for 225,000.
It also marks the lowest weekly total since the beginning of this year.
Continuing claims rose by 2,000 to 1.476 million vs expectations for a drop to 1.42 million.
American Eagle Sinks on Profit Warning
American Eagle Outfitters (AEO) shares are down 4.8% in premarket trade after warning profits will be hit by higher freight costs.
The clothing retailer reported Q4 earnings of $0.35 per share on $1.51 billion in revenue.
That was in-line with analysts’ expectations on the top and bottom line.
Sales at the Aerie brand jumped 27% year-over-year while American Eagle brand sales rose 11%.
The company forecast operating profit between $550 million and $600 million this year, lower than $603 million in 2021.
American Eagle also warned earnings will fall in Q1 compared to 2021 due to rising freight costs and the 2021 boost from stimulus checks.
Best Buy Shakes Off Q4 Miss
Best Buy (BBY) shares are up 4.5% ahead of the open despite missing Q4 expectations.
The retailer reported adjusted earnings of $2.73 per share on $16.37 billion in revenue.
Analysts were expecting adjusted EPS of $2.73 on $16.6 billion in revenue.
Best Buy forecast annual revenue of $49.3 billion to $50.8 billion, below analysts’ projections for $51.05 billion.
The CFO said the company is expecting short term headwinds but demand will surpass pre-pandemic levels in the future.
Best Buy hiked its quarterly dividend by 26%.
Snowflake Plunges on Slowing Growth
Snowflake (SNOW) shares are tumbling 19.5% in premarket trade after forecasting a slowdown in growth.
The cloud software company reported a Q4 loss of $0.43 per share on $383.8 million in revenue.
That beat analysts’ expectations for $373 million in revenue.
Revenue grew 101% year-over-year, down from 110% growth in Q3.
And Snowflake says that slowdown will continue.
The company forecast revenue growth between 79% to 81% this quarter and 65% to 67% for the full fiscal year.
Victoria’s Secret Issues Weak Outlook
Victoria’s Secret (VSCO) shares are up 0.1% ahead of the open after beating Q4 expectations.
The lingerie retailer reported earnings of $2.70 per share on $2.18 billion in revenue.
Analysts had forecast EPS of $2.63 on $2.14 billion in revenue.
But the company’s Q1 forecast was weak, citing supply chain issues, high inflation, and “the potential for consumer uncertainty with the recent global unrest.”
Victoria’s Secret forecast Q1 sales between $1.43 billion and $1.5 billion.
That would be a decrease of 4% to 8% compared to 2021 and is lower than analysts’ projections for $1.52 billion.
The company expects Q1 EPS between $0.70 to $0.95 vs analysts’ estimates for $1.32.
Powell Testifies in the Senate
Fed Chair Jerome Powell delivers his semi-annual monetary policy report to the Senate Banking Committee at 10:00 a.m. ET today.
Today’s testimony is expected to largely reflect the comments Powell made in the House Wednesday.
The Fed Chair told the House Financial Services Committee that the war in Ukraine presents “uncertain” challenges for the U.S. economy but the bank will move ahead with rate hikes.
Powell said he expects the March hikes to be 0.25% but left the door open for larger rate hikes this year if inflation is persistently above their forecast.
He said the Central Bank expects inflation to peak this year and then start cooling.
The Fed’s Beige Book on Wednesday showed more price increases are ahead.
The report said businesses “expect additional price increases over the next several months as they continue to pass on input costs increases.”
In Case You Missed It
- Ford (F) shares surged 8.4% Wednesday after the company announced it is separating operations of its traditional and electric vehicle businesses. The new EV division will be know as “Ford Model e” while the traditional division will be “Ford Blue”. The company plans to breakout financial results for both divisions by 2023. Ford plans to spend $5 billion on EVs this year, double the 2021 total. F shares are 1.8% higher in premarket trade.
- Apple (AAPL) sent out media invitations Wednesday for a March 8 event, “Peek Performance”. Analysts expect the company to unveil a new low-cost iPhone and an updated version of the iPad Air. The event will be streamed on YouTube and Apple’s website. AAPL shares are up 0.4% ahead of the open.