Coffee With Greta: Housing Market Still Strong
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DJIA Futures: +9 (+0.02%)
SPX Futures: -1.5 (-0.03%)
NASDAQ Futures: -15 (-0.1%)
Good morning friends!
Futures are mixed as traders digest new economic data and Q1 earnings.
Let’s get right to it!
Housing Starts, Building Permits Beat Expectations
U.S. home construction rose more than expected last month even as mortgage rates surged.
The Census Bureau reported housing starts rose 0.3% in March to a seasonally adjusted annualized rate of 1.79 million units.
That was better than economists’ expectations for a SAAR of 1.73 million units.
Housing starts were 4% higher year-over-year.
But that growth was centered in multi-family units.
Single-family starts fell 1.7% from February to March while multi-family starts jumped 7.5%.
The strength in building is expected to continue as the number of permits approved for future projects also rose more than expected.
The Census Bureau reported permits rose 0.4% to a SAAR of 1.87 million units vs 1.82 million units expected.
Single-family permits fell 4.8% monthly while multi-family starts surged 10.9%.
Johnson & Johnson Lowers 2022 Outlook
Johnson & Johnson (JNJ) shares are down 0.7% ahead of the open after beating Q1 profit expectations and lowering its full-year guidance.
The pharmaceutical giant reported earnings of $2.67 per share vs $2.58 expected.
Revenue came in short at $23.4 billion vs analysts’ expectations for $23.6 billion.
The company said it sold $457 million of its Covid vaccine globally last quarter.
But J&J is no longer providing specific guidance for Covid vaccine sales.
The company lowered its 2022 sales forecast by about $1 billion to between $94.8 billion and $95.8 billion.
J&J lowered its earnings forecast by about $0.25 per share to between $10.15 and $10.35.
Hasbro Misses Q1 Earnings Expectations
Hasbro (HAS) shares are up 0.3% in premarket trade despite missing Q1 profit expectations.
The toymaker reported adjusted earnings of $0.57 per share vs analysts’ estimates for $0.61.
Revenue of $1.16 billion was better than $1.15 billion expected.
Hasbro warned Russia’s invasion of Ukraine will cost it about $100 million in revenue this year.
The company forecast fiscal 2022 profit growth in the mid-single digits, up from the previous guidance for growth in the low-single digits.
Netflix Earnings On Deck
Netflix (NFLX) shares are flat ahead of the open as traders look ahead to the streaming giant’s Q1 earnings this afternoon.
The company will be the first of the FAANG stocks to report this earnings season.
Netflix had a weak Q1 forecast in its Q4 earnings in January, projecting just 2.5 million net new subscribers.
The company forecast revenue of $7.9 billion.
Traders are focused on Netflix’s outlook for Q2, which has historically been the company’s weakest each year.
Treasury Yields Jump
U.S. Treasury yields are continuing to rally as traders remain concerned about inflation.
The yield on the 10-year Treasury note is up 5 basis points at 2.92%.
That’s the highest level since late-2018.
But the curve between the 2-year and 10-year yield remains positive.
The 2-year yield is up 6 basis points to 2.53%
Oil Slides on Demand Concerns
Oil prices are falling today amid new demand concerns.
West Texas Intermediate crude futures are down 2.4% to under $106 bbl while Brent crude futures are down 2.4% to about $110 bbl.
The drop comes despite Libya halting some exports due to closures at some of its facilities.
The IMF is set to release its World Economic Outlook today.
Analysts expect that growth forecast to be lower due to the war in Ukraine.
Natural Gas Prices Cool After Hitting 13-year High
U.S. natural gas prices are cooling today after surging to the highest level in more than 13 years on Monday.
LNG futures are down 4.9% at $7.44 per million British thermal units.
This comes after futures hit a high of $8.05 per million British thermal units Monday, the highest price since September 2008.
U.S. LNG prices are still up more than 100% YTD.
The rally comes as the war in Ukraine continues to squeeze the global energy market.
Forecasters are also now expecting cooler spring temperatures this year, heightening the potential demand for natural gas.
In Case You Missed It
- A federal judge in Florida overturned the CDC’s mask mandate for public transportation Monday. The judge ruled the agency overstepped its authority when issuing the mandate. The Biden Administration confirmed TSA is no longer enforcing the mandate after that decision. The White House press secretary said they are reviewing the ruling and the Justice Department will decide whether or not to appeal.
- The National Association of Homebuilders Sentiment Index fell 2 points this month to 77. That drop was in-line with expectations and marks the 4th straight decline. Sentiment about current sales conditions fell 2 points to 85, buyer traffic tumbled 6 points to 60, and 6-month sales expectations rose 3 points to 73. The drop in sentiment comes as mortgage rates have spiked over the past month, squeezing more buyers out of the market.