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Coffee With Greta: Fed Day


DJIA Futures: +25 (+0.1%)

SPX Futures: +5 (+0.1%)

NASDAQ Futures:+18 (+0.1%)

Good morning friends!

Futures are up slightly as traders look ahead to this afternoon’s Fed decision.

Let’s get right to it!

Fed Day

The Federal Reserve releases its latest interest rate decision at 2:00 p.m. ET today. 

CME Group’s FedWatch Tool currently shows 82.8% of traders anticipating another 25 basis point rate hike. 

But the real focus will be on the language in the Fed statement about future hikes and the Fed Chair’s tone during his 2:30 p.m. press conference. 

Traders will also be listening for what Powell has to say about the regional banking crisis after the failure of First Republic Bank earlier this week. 

Private Job Growth Surges

Private sector job growth was way hotter than expected in April. 

Payroll firm ADP reported that private employers added 296,000 jobs last month. 

That was sharply higher than 133,000 expected and up from the downwardly revised 142,000 in March. 

It was the highest monthly increase since July 2022. 

But annual pay growth continued to slow, up 6.7% year over year.

The leisure and hospitality sector led April’s gains, adding 154,000 jobs. 

Education and health services added 69,000, construction added 53,000, natural resources and mining added 52,000, and trade, transportation, and utilities added 32,000. 

The financial services sector lost 28,000 jobs while manufacturing lost 38,000. 

This data comes ahead of the Labor Department’s official April jobs report on Friday which is expected to show the U.S. economy added 180,000 jobs last month with the unemployment rate ticking higher to 3.6%.

AMD Tops Q1 Estimates, Issues Weak Guidance

Advanced Micro Devices (AMD) shares are falling 7.4% ahead of the open after beating Q1 expectations on the top and bottom line but issuing weak guidance. 

Here’s how the chipmaker’s results compared to analysts’ expectations: 

  • Adjusted EPS: $0.60 vs $0.56 expected
  • Revenue: $5.35 billion vs $5.3 billion expected

Although the results topped analysts’ estimates, revenue was down 9% year over year and AMD’s Q2 guidance was weaker than expected. 

The company expects $5.3 billion in Q2 revenue vs $5.48 billion expected. 

Ford Smashes Q1 Expectations, Maintains Outlook 

Ford (F) shares are down 1.1% in premarket trading after solidly beating Q1 expectations but reiterating its full-year guidance. 

Here’s how the automaker’s results compared to analysts’ estimates: 

  • Adjusted EPS: $0.63 vs $0.41 expected
  • Revenue: $39.09 billion vs $36.08 billion expected

The CFO said Q1 was a “peek at what’s possible to generate value and growth.” 

Ford reiterated its forecast for full-year adjusted earnings between $9 billion and $11 billion. 

It also still expects to lose about $3 billion from its EV operations this year after the segment lost $722 million in Q1.

But Ford’s traditional car business earned $2.6 billion in profit while its fleet operations reported $1.4 billion in earnings.

Starbucks Earnings Top Expectations

Starbucks (SBUX) shares are down 5.3% ahead of the open after beating fiscal Q2 expectations on the top and bottom line. 

Here’s how the coffee giant’s results compared to analysts’ estimates: 

  • Adjusted EPS: $0.74 vs $0.65 expected
  • Revenue: $8.72 billion vs $8.4 billion expected

Global same-store sales were up 11% from a year ago vs expectations of 7.1%. 

Same-store sales jumped 12% in the U.S. and 3% in China, which is Starbucks’ second-largest market.

It was the first sales increase in China since Q3 2021. 

But the stock is sinking after Starbucks reaffirmed its full-year outlook.

The company still expects revenue growth of 10% to 12% and EPS growth on the low end of 15% to 20%.

CVS Slips On Lower Outlook

CVS (CVS) shares are down 2.6% in premarket trade after beating Q1 expectations but lowering its profit outlook. 

Here’s how the retailer’s results compared to analysts’ estimates:

  • Adjusted EPS: $2.20 vs $2.09 expected
  • Revenue: $85.28 billion vs $80.81 billion expected

Revenue was up 11% year over year. 

But CVS lowered its 2023 adjusted EPS guidance to a range of $8.50 to $8.70, down $0.20 from its previous forecast. 

The company said that lower guidance was due to costs associated with its acquisitions of Signify Health and Oak Street Health.

In Case You Missed It

  • Job openings fell more than expected in March. The Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) shows there were 9.6 million available jobs in March vs 9.7 million expected. That was down from 9.9 million in February and the lowest number of openings since April 2021.

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