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Good morning friends!
Futures are rising as traders attempt to shake off Tuesday’s loss.
Let’s get right to it!
Federal Reserve Governor Michael Barr will appear in the House Financial Services Committee today for his second day of testimony about the Silicon Valley Bank collapse and broader banking crisis.
Barr testified in the Senate Banking Committee on Tuesday.
He told the committee that $100 billion of withdrawals were scheduled for March 10, the day the bank was shut down.
That rush came after customers withdrew $42 billion from the bank the day before.
He said, “They were not able to actually meet their obligations to pay their depositors over the course of that day and they were shut down.”
Barr blamed the collapse on mismanagement by bank executives and said banks with more than $100 billion of assets may need stricter regulations moving forward.
He said the Fed began warning SVB’s management about the risk of higher interest rates to its balance sheet in November 2021 but the bank “failed to address” those concerns in a timely way.
Micron Technology (MU) shares are up 2.6% ahead of the open despite reporting weaker fiscal Q2 results than expected.
Here’s how the chipmaker’s results compared to analysts’ expectations:
Revenue plunged 53% year over year and dropped 10% from Q1.
Micron announced plans to increase its staff cuts to 15% vs 10% previously as part of its cost-reduction program.
The CEO said, “Customer inventories are getting better, and we expect gradual improvements to the industry’s supply-demand balance. We remain confident in long-term demand and are investing prudently to preserve our technology and product portfolio competitiveness.”
Micron expects fiscal Q3 revenue of $3.7 billion, in line with expectations.
Lululemon (LULU) shares are rallying 16.7% in premarket trade after beating Q4 expectations on the top and bottom line.
Here’s how the company’s results compared to analysts’ expectations:
Sales jumped 30% but gross margins declined more than expected.
Gross margins were down 3% to 55.1% last quarter, worse than the company’s guidance for a 0.9% to 1.1% decline.
Lululemon forecast Q1 EPS between $1.93 and $2 vs analysts’ expectations of $1.64.
For the full year, the company expects net revenue to range between $9.3 billion and $9.41 billion vs $9.1 billion expected.
Mortgage demand jumped last week as the banking crisis pushed rates lower.
The Mortgage Bankers Association reported total application volume rose 2.9% from the week before.
Purchase applications increased 2% weekly but were 35% lower year over year.
Refinance applications rose 5% weekly and were down 61% annually.
The average 30-year fixed contract rate fell to 6.45% from 6.48%.
But rates have since jumped sharply, rising more than 20 basis points at the start of this week.
The National Association of Realtors reports pending home sales for February at 10:00 a.m. ET.
The number of contracts signed to purchase a home last month is expected to fall 3% monthly.
Pending sales are a forward-looking indicator for the housing market as they represent contracts signed during the month with sales expected to close in 30 to 60 days.