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Coffee With Greta: June Kickoff


DJIA Futures: -90 (-0.3%)

SPX Futures: -1 (-0.02%)

NASDAQ Futures: -18 (-0.1%)

Good morning friends!

Futures are down as traders digest new hot jobs data and the debt ceiling deal makes progress in Congress.

Let’s get right to it!

House Passes Debt Ceiling Deal

The bill to raise the debt ceiling is now headed to the Senate after passing in the House Wednesday night. 

The lower chamber approved the Fiscal Responsibility Act in a 314-117 vote.

Senate leaders have set a goal of passing the bill in 48 hours. 

Majority Leader Chuck Schumer said, “There’s been a very good vote in the House. I hope we can move the bill quickly here in the Senate and bring it to the president’s desk as soon as possible.”

The Treasury Department says it will run out of money June 5. 

May Private Job Growth Runs Hot

The U.S. private sector added more jobs than expected in May. 

Payroll firm ADP reported private employers added 278,000 workers last month. 

That was sharply higher than expectations for just 180,000. 

Leisure and hospitality added 208,000, natural resources and mining gained 94,000, construction added 64,000, trade, transportation and utilities added 32,000, and other services gained 12,000. 

But several sectors saw declines. 

Manufacturing dropped by 48,000, financial activities lost 35,000, and education and health services lost 29,000.

Wage gains continued to slow, with annual pay up 6.5% vs 6.7% in April.

Those switching jobs saw an annual increase of 12.1%, down a full 1% from April.

ADP’s chief economist said, “This is the second month we’ve seen a full percentage point decline in pay growth for job changers. Pay growth is slowing substantially, and wage-driven inflation may be less of a concern for the economy despite robust hiring.”

The Labor Department’s official May jobs report will be released tomorrow and is expected to show a gain of 190,000 jobs with the unemployment rate rising to 3.5%.

Weekly Jobless Claims Rise

Weekly jobless claims rose less than expected last week. 

The Labor Department reported 232,000 Americans filed initial unemployment claims. 

That was up by 2,000 from the previous week and lower than 235,000 expected. 

Macy’s Drops After Slashing Outlook

Macy’s (M) shares are falling 4.9% in premarket trade after missing fiscal Q1 revenue expectations and cutting its full-year outlook.

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

  • Adjusted EPS: $0.56 vs $0.45 expected
  • Revenue: $4.98 billion vs $5.04 billion expected

Revenue dropped 7% year over year while comparable sales fell 7.2% vs 4.7% expected.  

Macy’s now expects full-year adjusted EPS of $2.70 to $3.20, down sharply from previous guidance for $3.67 to $4.11.

The company expects full-year sales of $22.8 billion to $23.2 billion vs $23.7 billion to $24.2 billion previously. 

Nordstrom Rallies On Sales Beat

Nordstrom (JWN) shares are up 4.6% ahead of the open after beating fiscal Q1 expectations on the top and bottom line. 

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

  • Adjusted loss per share: $0.07 vs $0.08 expected
  • Revenue: $3.18 billion vs $3.12 billion expected

CEO Erik Nordstrom said, “We’re encouraged by our momentum, especially given the uncertain macroeconomic environment.”

Nordstrom reaffirmed its full-year outlook for revenue to fall 4% to 6% and adjusted EPS between $1.80 and $2.20.

Salesforce Costs Overshadow Earnings Beat, Higher Outlook

Salesforce (CRM) shares are 7.4% in premarket trade after beating fiscal Q1 expectations but reporting higher capital costs than expected. 

Here’s how the software company’s results compared to analysts’ estimates: 

  • Adjusted EPS: $1.69 vs $1.61 expected
  • Revenue: $8.25 billion vs $8.18 billion expected

Salesforce’s capital expenditures totaled $243 million in the quarter, up 36% year over year and higher than $205 million expected.

Those cost concerns overshadowed the 11% annual increase in revenue.

Salesforce expected fiscal Q2 adjusted EPS of $1.89 to $.190 and $8.51 billion to $8.53 billion in revenue.

That beat analysts’ estimates for adjusted EPS of $1.70 on $8.49 billion in revenue. 

For the full year, Salesforce raised its earnings forecast to $7.41 to $7.43 per share on $34.5 billion to $34.7 billion in revenue.

In Case You Missed It

  • Job openings rose unexpectedly in April. The Labor Department’s job openings and labor turnover survey (JOLTS) showed there were 10.1 million available jobs in April, up from 9.8 million in March. Economists had expected openings to fall to 9.4 million. It was the highest number in 3 months as the labor market maintains strength amid the Fed’s tightening cycle.

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