Coffee With Greta: Positive Economic Data Boosts Stocks
DJIA Futures: +52 (+0.2%)
SPX Futures: +18 (+0.4%)
NASDAQ Futures: +68 (+0.5%)
Good morning friends!
Futures are higher after the release of some positive economic data.
Let’s get right to it!
Q2 GDP Contraction Revised Lower
The Commerce Department’s second estimate shows the U.S. economy contracted at an annual rate of 0.6% in Q2.
That was an improvement from the first estimate which showed the economy shrank 0.9% annually.
The change comes as consumer spending was revised to show a 1.5% gain vs the prior estimate of 1%.
It was still the second-straight quarterly decline in GDP after the 1.6% contraction in Q1.
Weekly Jobless Claims Fall to One-Month Low
Weekly jobless claims fell to a one-month low last week, showing no signs of surging layoffs.
The Labor Department reported 243,000 Americans filed initial claims for unemployment benefits.
That was down 2,000 from the previous week’s revised level and better than expectations for claims to rise to 255,000.
Continuing claims fell by 10,000 to 1.42 million in the week ending August 13.
Peloton Plunges On Big Fiscal Q4 Loss
Peloton (PTON) shares are plunging 14.9% in premarket trade after reporting a steeper loss than expected in its fiscal fourth quarter.
The connected fitness equipment maker reported a loss of $3.68 per share on $679 million in revenue.
That was worse than analysts’ expectations for a loss of $0.76 per share on $682 million in revenue.
The CEO said $415 million of the $1.2 billion operating loss was related to restructuring charges.
He said, “The loss reflects the substantial progress we made this last quarter re-architecting the business to reduce the current and future inventory overhang, converting fixed to variable costs, and addressing numerous supply chain issue.”
It was Peloton’s 6th consecutive quarterly loss but the company said it’s aiming to reach breakeven cash flow by the second half of fiscal 2023.
Nvidia Tumbles on Weak Outlook
Nvidia (NVDA) shares are dropping 3% ahead of the open after weak Q2 earnings and guidance.
The chipmaker reported adjusted earnings of $0.51 per share on $6.7 billion in revenue.
That missed analysts’ expectations for adjusted EPS of $1.26 on $8.10 billion in revenue but was in line with Nvidia’s preliminary results two weeks ago.
Revenue in the gaming department plunged 33% year over year which the CFO blamed on “macroeconomic headwinds across the world”.
Nvidia forecast $5.9 billion in sales in Q3 vs analysts’ estimates of $6.95 billion.
Salesforce Guidance Comes Up Short
Salesforce (CRM) shares are falling 8.1% in premarket trade after beating fiscal Q2 expectations but giving a disappointing forecast for the remainder of the year.
The software company reported adjusted earnings of $1.19 per share on $7.72 billion in revenue.
That was better than analysts’ expectations for adjusted EPS of $1.02 on $7.69 billion in revenue.
Salesforce called for adjusted earnings of $1.20 to $1.21 per share in fiscal Q3 on revenue between $7.82 billion and $7.83 billion.
Analysts were estimating fiscal Q3 adjusted EPS of $1.29 on $8.07 billion in revenue.
The company also cut its full-year outlook, calling for EPS between $4.71 and $4.73 and $30.9 billion to $31 billion in revenue.
That’s down from its previous forecast for EPS of $4.74 to $4.76 on $31.7 billion to $31.8 billion in revenue.
Tesla Stock Split Takes Effect
Tesla (TSLA) shares are up 1.6% ahead of the open as the automaker’s 3-for-1 stock split takes effect.
The stock is trading just above $300 per share on a split-adjusted basis.
Tesla’s board of directors approved the split on August 5.
The company said it would provide more flexibility for employees managing their equity and would serve as a recruiting tool.
This is Tesla’s second stock split in 2 years.
The stock has gained about 104% since the 5-for-1 split in August 2020.
Oil Prices Hold Steady
Oil prices are mixed today as uncertainty continues over whether OPEC+ will cut production and the prospect of Iranian oil returning to the market.
West Texas Intermediate crude futures are up 0.1% at $95 bbl while Brent crude futures are up 0.4% at $101.60 bbl.
Talks are continuing between the EU, U.S., and Iran to revive the 2015 nuclear deal.
Falling U.S. inventories are also putting upward pressure on prices.
The Energy Information Administration reported a 3.3 million barrel drop in crude stockpiles last week vs a 933,000 barrel decline expected.
Gasoline inventories fell by 27,000 barrels vs expectations for a 1.5 million barrel drop.
In Case You Missed It
- The National Association of Realtors reported pending home sales fell 1% in July. That was smaller than economists’ expectations for a 3% drop. Pending sales were down 19.9% year over year. These represent contracts signed last month with sales expected to close in 30 to 60 days.
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