Coffee With Greta: Trouble For Banks
Register now for tomorrow's free Q&A event on LinkedIn with T3 professional trader Brandt Hersh!
DJIA Futures: -244 (-0.7%)
SPX Futures: -31 (-0.7%)
NASDAQ Futures: -107 (-0.7%)
Good morning friends!
Futures are slipping with bank stocks under pressure.
Let’s get right to it!
Small Banks Downgraded
Both big and small bank stocks are falling ahead of the open after Moody’s cut the credit ratings of several U.S. banks late Monday.
The SPDR S&P Regional Banking ETF (KRE) is down 2.8% while the Financial Select Sector SPDR ETF (XLF) is down 1.2%.
The downgraded banks included M&T Bank (MTB), Pinnacle Financial (PNF), BOK Financial (BOKF) , and Webster Financial (WBS).
Bank of New York Mellon (BK), U.S. Bancorp (USB), State Street (STT), Truist Financial (TFC), Cullen/Frost Bankers (CFR), and Northern Trust (NTRS) are now all under review for a potential downgrade.
The firm also changed its outlook to negative for 11 banks, including Capital One (COF), Citizens Financial (CFG), and Fifth Third Bancorp (FITB).
Moody’s analysts said, “U.S. banks continue to contend with interest rate and asset-liability management (ALM) risks with implications for liquidity and capital, as the wind-down of unconventional monetary policy drains systemwide deposits and higher interest rates depress the value of fixed-rate assets.”
Palantir Drops Despite Strong Guidance
Palantir Technologies (PLTR) shares are down 1.1% in premarket trade after reporting Q2 results that were in line with expectations and issuing strong guidance.
Here’s how the data-analytics company’s results compared to analysts’ estimates:
- Adjusted EPS: $0.05 as expected
- Revenue: $533 million as expected
Revenue jumped 13% year over year.
Palantir forecast Q3 revenue between $553 million and $557 million vs $552 million expected.
The midpoint of that guidance suggests 16% year over year growth.
The company expects full-year revenue of over $2.212 billion vs $2.209 billion expected.
The CEO wrote in a letter to shareholders, “We anticipate that we will become eligible for inclusion in the S&P 500 after we report our financial results for Q3 2023 in early November. At that point, we will have been profitable on a cumulative basis over the preceding four quarters.”
Lucid Slips On Revenue Miss
Lucid Group (LCID) shares are down 0.2% ahead of the open after missing Q2 expectations.
Here’s how the electric automaker’s results compared to analysts’ estimates:
- Loss per share: $0.40 vs $0.33 expected
- Revenue: $150.9 million vs $175 million expected
Lucid delivered just 1,404 of its Air sedans during the quarter, about 600 fewer than analysts expected.
It was also down from the 1,406 delivered in Q1.
Lucid said it has begun to ship vehicles to Saudi Arabia after the country’s Ministry of Finance agreed last year to buy at least 50,000 and up to 100,000 EVs from the company over the next decade.
The CFO said the company ended Q2 with $6.25 billion in available liquidity, enough to last into 2023.
Lucid reaffirmed its previous production guidance, expecting to produce “over 10,000” vehicles this year.
UPS Cuts Forecast
United Parcel Service (UPS) shares are falling 3.9% in premarket after reporting mixed Q2 results and cutting its outlook.
Here’s how the shipping giant’s results compared to analysts’ estimates:
- Adjusted EPS: $2.54 vs $2.50 expected
- Revenue: $22.1 billion vs $23.1 billion expected
Revenue dropped 11% year over year as average daily package volume in the U.S. tumbled 9.9%.
UPS forecast full-year revenue of $93 billion and operating margins around 11.8%, that was down from previous guidance for $97 billion and 12.8% respectively.
Part of the lower guidance is due to the new labor contract agreed to between UPS and the Teamsters Union.
The CEO said, “We will stay on strategy to capture growth in the most attractive parts of the market.”
In Case You Missed It
- Tesla (TSLA) shares fell 1% on Monday after the electric automaker’s CFO stepped down. A regulatory filing showed he will step down effective Friday and be replaced by the current chief accounting officer. The departing CFO will remain with Tesla through the end of the year to help with the transition.