Coffee With Greta: Are We Already In A Recession?
DJIA Futures: -313 (-1.1%)
SPX Futures: -49 (-1.3%)
NASDAQ Futures: -182 (-1.6%)
Good morning friends!
Futures are dropping, reversing most of Wednesday’s big rally.
Let’s get right to it!
Final Revision Confirms Q2 GDP Contraction
The Commerce Department’s final revision of second-quarter GDP confirms the U.S. economy contracted in the first half of the year.
The revision was unchanged at -0.6% as expected.
Consumer spending was revised higher while exports were revised lower.
The revision also showed higher inflation pressures in the quarter with the PCE price index rising 7.3% vs 7.1% previously and the core PCE price index up 4.7% vs 4.4% prior.
That marks two consecutive quarters of contraction after the economy shrank 1.6% in Q1 which is considered a technical indicator of a recession.
Weekly Jobless Claims Tumble to 5-Month Low
Weekly jobless claims dropped last week to the lowest level since late-April.
The Labor Department reported 193,000 Americans filed initial claims for unemployment benefits, down 16,000 from the previous week.
That beat expectations for an increase to 215,000.
Continuing claims fell by 29,000 to 1.35 million in the week ending September 17.
Bed Bath & Beyond Slips After Earnings
Bed Bath & Beyond (BBBY) shares are down 4.2% ahead of the open after reporting a wider loss than expected in fiscal Q2.
Here’s how the retailers results compared with analysts’ expectations:
- Adjusted loss per share: $3.22 vs $1.85 expected
- Revenue: $1.44 billion vs $1.47 billion
Total sales plunged 28% year over year with comparable sales down 26%>
Bed Bath & Beyond expects comparable sales to decline about 20% in the second half of the year and reiterated its full-year outlook.
CarMax Tumbles On Huge Earnings Miss
CarMax (KMX) shares are tumbling 17.1% in premarket trade after sharply missing fiscal Q2 expectations.
Here’s how the used-car dealer’s results compared to analysts’ expectations:
- EPS: $0.79 vs $1.39 expected
- Revenue: $8.1 billion vs $8.5 billion expected
The company’s expenses rose 16% year over year to $666 million due to increased staffing, higher wages, and investments in technology.
But CarMax’s comparable-store used vehicle unit sales dropped 8.3% as “inflationary pressures, as well as climbing interest rates and low consumer confidence” caused affordability problems.
CarMax is dragging down Carvana (CVNA) ahead of the open as well with the stock falling 9.9%.
Peloton Announces Partnership with Dick’s
Peloton (PTON) shares are up 1.6% ahead of the open after announcing a retail partnership with Dick’s Sporting Goods (DKS).
Dick’s will become the first brick and mortar retailer to sell the Peloton equipment outside of its namesake stores.
Dick’s will sell the Peloton Bike, Bike+, Tread, and Guide as well as some accessories.
The companies did not unveil a launch date for the partnership but said they aim to have Peloton products in more than 100 Dick’s stores before the holiday shopping season.
Prices will not vary between Peloton’s direct sales and products sold at Dick’s.
Peloton’s senior vice president of global direct sales said, “This partnership [with Dick’s] is a natural fit for our brand and our Member acquisition goals.”
In Case You Missed It
- Pending home sales fell by 2% in August vs expectations for a 1.4% decline. It was the third straight monthly drop reported by the National Association of Realtors. Contract signings fell by double-digits in all 4 regions across the country as mortgage rates shoot higher. This was the ninth drop in pending sales in the past 10 months.