Coffee With Greta: Hot Jobs Report Vindicates Powell
DJIA Futures: +206 (+0.7%)
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Good morning friends!
Futures are higher as a hot October jobs report supports the Fed’s continued hawkish stance.
Let’s get right to it!
Hot Jobs Report
Job growth surged higher in October as hiring remains strong.
The Labor Department reported the U.S. economy added 261,000 jobs last month vs 205,000 expected.
But the unemployment rate unexpectedly increased to 3.7% from 3.5%.
Economists were expecting that rate to be unchanged.
The rising unemployment rate alongside strong hiring indicates more people have resumed actively looking for work.
Average hourly earnings were up 4.7% year over year and 0.4% on a monthly basis.
The labor force participation rate ticked lower to 62.2%, still down sharply from 63.4% pre-pandemic.
September’s job growth was also revised higher by 52,000 to +315,000 while August was revised lower by 23,000 to +292,000.
PayPal Drops On Q4 Outlook
PayPal (PYPL) shares are down 5.8% ahead of the open despite beating Q3 expectations as the market focused on its forecast.
Here’s how the company’s results compared to analysts’ expectations:
- Adjusted EPS: $1.08 vs $0.96 expected
- Revenue: $6.85 billion vs $6.82 billion expected
PayPal expects $7.83 billion in Q4 revenue, less than estimates for $7.74 billion.
But the company did hike its full-year EPS guidance as it expects to add between 8 and 10 million net new active users this fiscal year.
Block Rallies On Earnings Beat
Block (SQ) shares are rallying 11.3% in premarket trade after beating Q3 expectations.
Here’s how the payments company’s results compared to analysts’ estimates:
- Adjusted EPS: $0.42 vs $0.23 expected
- Revenue: $4.52 billion vs $4.49 billion expected
Gross profit jumped 38% year over year to $1.57 billion vs $1.53 billion expected.
Gross profit at Block’s Cash App business surged 51% annually to $774 million.
The company also said over 18 million people were actively using its Cash debit card in September, up 40% compared to a year ago.
Its point-of-sale business, Square, brought in gross profit of $783 million, up 29% year over year.
Coinbase User Numbers Beat
Coinbase (COIN) shares are up 5.7% ahead of the open after topping Q3 user expectations.
Here’s how the crypto platform’s results compared to analysts’ expectations:
- Adjusted loss per share: $2.43 vs $2.40 expected
- Revenue: $590 million vs $654 million expected
Revenue plummeted more than 50% year over year as traders ditched crypto.
In its investor letter the company said, “Transaction revenue was significantly impacted by stronger macroeconomic and crypto market headwinds, as well as trading volume moving offshore.”
Coinbase said it had 8.5 million monthly transacting users in Q3.
That topped analysts’ expectations for 7.84 million but was down from 9 million in Q2 and 9.2 million in Q1.
The company expects its monthly user numbers to be “slightly below” 9 million for the full year
Starbucks Rallies On Earnings Beat
Starbucks (SBUX) shares are up 6% in premarket trade after beating fiscal Q4 expectations.
Here’s how the coffee chain’s results compared to analysts’ expectations:
- Adjusted EPS: $0.81 vs $0.72 expected
- Revenue: $8.41 billion vs $8.31 billion expected
Global same-store sales jumped 7% as U.S. sales surged.
Same-store sales in the U.S. jumped 11% as customers paid higher prices.
Prices were up 6% year over year but Starbucks said it does not plan to increase prices anymore for the time being.
Active membership in the company’s loyalty program jumped 16% to 28.7 million people.
Starbucks forecast fiscal 2023 revenue growth of 10% to 12% and global same-store sales growth on the high end of its previous range of 7% to 9%.
Carvana Plunges On Big Q3 Loss
Carvana (CVNA) shares are plunging 11.8% ahead of the open after reporting a steep loss in Q3.
Here’s how the car reseller’s results compared to analysts’ expectations:
- Loss per share: $2.67 vs $1.94 expected
- Revenue: $3.39 billion vs $3.71 billion expected
Gross profit dropped 31% year over year while retail units sold fell 8%.
Gross profit per unit also tumbled by more than $1,100 to $3,500 as used car prices have cooled compared to a year ago.