Coffee With Greta: Key Fed Decision Day
DJIA Futures: +4 (+0.01%)
SPX Futures: -2 (-0.04%)
NASDAQ Futures: -14 (-0.1%)
Good morning friends!
Futures are flat as traders await today’s Fed decision.
Let’s get right to it!
Yields Rise Ahead of Fed Decision
Treasury yields are rising ahead of the Fed decision today.
The 2-year yield is up 5 basis points to 4.21% while the 10-year yield is up 2 basis points to 3.63%.
The FOMC will release its meeting statement and rate decision at 2:00 p.m. ET today.
CME Group’s FedWatch Tool shows nearly 88% of traders expecting a 25 basis point hike today.
Fed Chair Jerome Powell will then hold a press conference at 2:30 p.m.
GameStop Surges On Surprise Profit
GameStop (GME) shares are surging 55% ahead of the open after reporting a surprise profit in the latest quarter.
Here’s how the video game retailer’s fiscal Q4 results compared to analysts’ expectations:
- EPS: $0.16 vs $0.13 adjusted loss per share expected
- Revenue: $2.23 billion vs $2.18 billion expected
It was GameStop’s first quarterly profit in two years as the company has been working to steer itself back to profitability.
Total expenses fell to $453.4 million from $538.9 million in Q4 2021.
GameStop did not provide guidance but the CEO said the company has plans to further cut excess costs this year.
Nike Slips On Shrinking Margins
Nike (NKE) shares are falling 1.8% in premarket trade despite beating Q3 expectations on the top and bottom line.
Here’s how the company’s results compared to analysts’ expectations:
- EPS: $0.79 vs $0.56 expected
- Revenue: $12.4 billion vs $11.5 billion expected
Sales rose 14% year over year.
But Nike’s gross margin dropped 3.3% to 43.3% as elevated inventory levels caused aggressive discounts.
Nike also dealt with unfavorable exchange rates and higher production and freight costs during the quarter.
The company said it expects fiscal 2023 revenue growth in the high-single digit range, up from previous guidance for mid-single digit growth.
Mortgage Demand Jumps
Mortgage demand rose for the third straight week as rates dropped in response to the banking crisis.
The Mortgage Bankers Association reported total application volume rose 3% last week from the previous week.
Purchase applications rose 2% weekly and were 36% lower year over year.
Refinance applications rose 5% weekly and were down 68% annually.
The increase came as the average 30-year contract rate decreased to 6.48% from 6.71%.
That was the lowest level in a month but still sharply higher than around 4.5% a year ago.
Rates have since started rising again.
In Case You Missed It
- Existing home sales surged in February. The National Association of Realtors reported existing sales jumped 14.5% from January to a seasonally adjusted annual rate of 4.58 million units. It was the first monthly gain in a year but sales were still down 22.6% year over year. The median price of an existing home sold last month was $363,000, down 0.2% from February 2022. That was the first annual decline in nearly 11 years. Supply remained tight with just 980,000 homes for sale at the end of February, representing a 2.6-month supply at the current sales pace.