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Coffee With Greta: Inflation Fears Spook Traders


DJIA Futures: -111 (-0.3%)

SPX Futures: -23 (-0.6%)

NASDAQ Futures: -91 (-0.7%)

Good morning friends!

Futures are dropping as Treasury yields jump amid new fears about inflation and the Fed’s response. 

Let’s get right to it!

Yields Pop After Fed Comments

U.S. Treasury yields are rising this morning as concerns rise about the Fed continuing rate hikes due to persistently high inflation. 

The 2-year Treasury yield is up 7 basis points to 4.67% while the 10-year yield is surging 24 basis points to 3.89%. 

The jump comes after the January PPI came in way hotter-than-expected on Thursday and Fed officials put their support behind continued rate hikes. 

Cleveland Fed President Loretta Mester said in a speech Thursday that she would have preferred a 50 basis point rate hike at the last meeting. 

She said, “The upside risks to inflation and historical experience suggest to me that the costs of undershooting on policy or prematurely loosening policy still outweigh the costs of overshooting.”

St Louis Fed President James Bullard echoed that sentiment in a later speech, saying he is advocating for a 50 basis point hike at the March meeting. 

He said, “continued policy rate increases can help lock in a disinflationary trend during 2023, even with ongoing growth and strong labor markets, by keeping inflation expectations low.”

The two are not voting members of the FOMC in 2023. 

DoorDash Reports Best Quarter Ever

DoorDash (DASH) shares are up 3.8% ahead of the open after reporting mixed Q4 results. 

Here’s how the delivery platform’s results compared to analysts’ expectations:

  • Loss per share: $1.65 vs $0.67 expected
  • Revenue: $1.8 billion vs $1.77 billion expected
  • Adjusted Ebitda: $117 million vs $109 million expected

DoorDash said the loss was caused by impairment charges related to its acquisition of Europe-based delivery company Wolt and stock-based compensation related to layoffs announced in December. 

The company had a record 467 million orders in Q4 with a gross order value of $14.4 billion, topping analysts’ estimates. 

For the full year, DoorDash reported a net loss of $1.37 billion on revenue of $6.58 billion. 

That compared to analysts’ expectations for a $989 million loss on $6.55 billion in revenue.

DoorDash ended 2022 with 32 million monthly active users, up by 7 million from the end of 2021.

The company forecast Q1 adjusted Ebitda of $120 million to $170 million and gross order value of $15.1 billion to $15.5 billion. 

That topped analysts’ outlook for $128 million in Ebitda and gross order value of $15 billion.

DraftKings Surges On Record Revenue, Stronger Guidance

DraftKings (DKNG) shares are rallying 11.9% in premarket trade after reporting record revenue in Q4 and hiking its 2023 guidance. 

Here’s how the online sports betting company’s results compared to analysts’ expectations: 

  • Loss per share: $0.53 vs $0.62 expected
  • Revenue: $855.1 million vs $801 million expected

It was the first quarter DraftKings cleared $800 million in quarterly revenue.

The company raised its 2023 revenue guidance to $2.85 billion to $3.05 billion amid optimism as more states legalize sports gambling. 

In Case You Missed It

  • Tesla (TSLA) shares dropped 5.7% on Thursday after the automaker issued a massive recall. The EV maker recalled 362,758 vehicles due to an issue with the Full Self-Driving Beta software. The National Highway Traffic Safety Administration said that software may increase the risk of crashes by allowing the vehicles to “exceed speed limits or travel through intersections in an unlawful or unpredictable manner.” Tesla will release an over-the-air software update to fix the issue.

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