All posts by Greta Wall
Coffee With Greta: Kicking Off A New Quarter
DJIA Futures: -8 (-0.02%) SPX Futures: +7 (+0.1%) NASDAQ Futures: +39 (+0.2%) Good morning friends! Futures are mostly higher as the second quarter begins. Let’s get right to it! New Quarter April and a new quarter of trade officially begin on Wall Street today. All three major indexes are coming off winning first quarters and approaching new records. The S&P 500 rose 10.2% in the first three months of the year, its best Q1 performance since 2019. The Dow rose 5.6% during the quarter and the Nasdaq jumped 9.1%. March was also the fifth consecutive winning month for the major indexes. The S&P rose 3.1%, the Dow added 2.1%, and the Nasdaq rose 1.8%. This will be an important week of data focused on the labor market. Data kicks off with the Job Openings and Labor Turnover Survey (JOLTS) on Tuesday. ADP then releases its private employment report on Wednesday morning and the official March jobs report will be released Friday morning. 3M Completes Healthcare Spinoff 3M (MMM) shares are up 2.6% ahead of the open after completing its spinoff of its healthcare business, Solventum (SOLV). In a statement, 3M’s chairman and CEO said, “Both companies are positioned to pursue their respective growth and tailored capital allocation plans, and I am excited to see both companies succeed as they innovate new solutions and create value for their respective stakeholders.” MMM shareholders received one SOLV share for every four shares of 3M common stock they held at the close on March 18, 2024. 3M also announced its $12.5 billion settlement agreement with U.S. public water suppliers received final approval from a U.S. District Court. The settlement is related to the company’s role in contaminated drinking water with PFAS. The CEO said, “The final approval of this settlement and continued progress toward exiting all PFAS manufacturing by the end of 2025 will further our efforts to reduce risk and uncertainty as we move forward.” Gold Prices Hit Record High Gold prices are extending the recent Fed-induced rally, hitting a fresh record high this morning. Spot gold added 0.6% to trade as high as $2,245.79 per ounce while U.S. gold futures are currently up more than 1.5% at $2.272.80 per ounce. The recent rally was spurred by Fed rate cut expectations following the dovish dot plot and Chairman’s press conference in March. The Fed’s preferred inflation gauge, the core PCE price index, rose 2.8% year over year in February. That data was released Friday while the market was closed for Good Friday but was in line with expectations.
Continue Reading -->Coffee With Greta: Closing Out Q1
DJIA Futures: +42 (+0.1%) SPX Futures: +1 (+0.01%) NASDAQ Futures: -2 (-0.1%) Good morning friends! Futures are flat as traders gear up for the final session of the first quarter. Let’s get right to it! Weekly Jobless Claims Fall Weekly jobless claims were lower than expected last week in a sign of continued tightness for the labor market. The Labor Department reported 210,000 Americans filed initial claims for unemployment benefits. That was down by 2,000 from the previous week and lower than 215,000 expected. Continuing claims rose by 24,000 to 1.82 million in the week ending March 16. Q4 GDP Revised Higher The U.S. economy expanded more than previously estimated in the fourth quarter. The Bureau of Economic Analysis’ second revision of Q4 GDP came in at 3.4%, up from 3.2% previously. BEA said, “The update primarily reflected upward revisions to consumer spending and nonresidential fixed investment that were partly offset by a downward revision to private inventory investment.” Full-year growth in 2023 remained at 2.5%. Walgreens Slips After Narrowing Outlook Walgreens Boots Alliance (WBA) shares are down 2.7% ahead of the open after topping fiscal Q2 expectations but lowering its full-year profit outlook. Here’s how the pharmacy chain’s results compared to analysts’ estimates: Adjusted EPS: $1.20 vs $0.82 expected Revenue: $37.05 billion vs $35.86 billion expected Revenue rose 6% year over year. Sales in the company’s U.S. health-care division jumped 33% from a year ago to $2.18 billion. The U.S. retail pharmacy segment saw sales rise 5% to $28.86 billion. And retail sales fell 4.5%. Walgreens now expects full-year adjusted EPS between $3.20 and $3.35 vs the previous outlook for $3.20 to $3.50 per share. Analysts are expecting full-year adjusted earnings of $3.24 per share. AMC Tumbles On Stock Sale Announcement AMC Entertainment (AMC) shares are dropping 14.3% in premarket trade after filing to sell up to $250 million of stock. In a filing this morning, the company said it plans to use the proceeds from that sale to bolster liquidity to repay, refinance, redeem, or repurchase its existing debt. AMC said, “Among other reasons, the offering is being conducted to enhance the Company’s liquidity in light of the low first quarter box office.”
Continue Reading -->Coffee With Greta: Can We Break The Losing Streak?
DJIA Futures: +170 (+0.4%) SPX Futures: +25 (+0.5%) NASDAQ Futures: +103 (+0.6%) Good morning friends! Futures are higher as the S&P 500 attempts to shake off a three-session losing streak. Let’s get right to it! Three-Day Losing Streak The S&P 500 has fallen from record highs over the past three sessions. The blue-chip index closed 0.3% lower on Tuesday, marking its third down day in a row. The major indexes are all still on track to end the month and quarter in the green. So far this month the S&P 500 is up 2.1%, the Nasdaq is 1.4% higher, and the Dow is up 0.7%. For the quarter, the S&P has rallied 9.1%, the Nasdaq is up 8.7%, and the Dow is 4.2% higher. This is a shortened trading week, with the stock market closed in observance of Good Friday. GameStop Plummets After Earnings GameStop (GME) shares are tumbling 16.2% ahead of the open after reporting a steep drop in Q4 revenue. Here’s how the video game retailer’s results compared to analysts’ estimates: Adjusted EPS: $0.22 vs $0.30 expected Revenue: $1.79 billion vs $2.05 billion expected Hardware and accessories sales dropped to $1.09 billion from $1.24 billion a year ago. Software sales plunged 31% to $465 million from $670 million. GameStop also said it cut an unspecified number of jobs throughout the quarter in order to cut costs. Mortgage Demand Stalls Mortgage demand was flat last week as high rates continue to put pressure on the spring housing market. The Mortgage Bankers Association reported total application volume fell 0.7%. Purchase applications decreased 0.2% weekly and 16% year over year. Refinance applications fell 2% weekly and 9% annually. The average 30-year fixed contract rate decreased to 6.93% from 6.97%. Mortgage News Daily shows rates have pulled back slightly so far this week to 6.91%. In Case You Missed It Consumer confidence fell to a four-month low in March. The Conference Board’s consumer confidence index dipped to 104.7 this month from the revised 104.8 in February. That was lower than expectations for 106.5. Confidence in current economic conditions rose to 151 from 147.6. But the six-month expectations index dropped to 73.8 from 76.3. Readings below 80 in the expectations index typically signal an approaching recession.
Continue Reading -->Coffee With Greta: Rally Resumes
DJIA Futures: +45 (+0.1%) SPX Futures: +12 (+0.2%) NASDAQ Futures: +55 (+0.3%) Good morning friends! Futures are higher as traders look to extend the record-setting rally. Let’s get right to it! Krispy Kreme Jumps On McDonald’s Partnership Krispy Kreme (DNUT) shares are rallying 17.6% ahead of the open after announcing a partnership with McDonald’s (MCD) this morning. McDonald’s has agreed to sell Krispy Kreme doughnuts at its restaurants nationwide by the end of 2026. The companies will begin the rollout in the second half of this year and Krispy Kreme will more than double its distribution to satisfy the partnership over the next 2.5 years. Krispy Kreme’s CEO said, “We think we can service about 6,000 restaurants with our existing infrastructure, mostly doughnut shops, which have excess capacity.” McDonald’s already sells Krispy Kreme at 160 restaurants across Louisville and Lexington, Kentucky. Trump Media Company Makes Trading Debut Trump Media & Technology Group (DJT) shares are surging 23.8% in premarket trade as former President Donald Trump’s social media company debuts on Wall Street. The debut is a SPAC deal that combined Trump’s company and the shell company Digital World Acquisition Corporation. A majority of DWAC shareholders voted last week to approve the merger. TMTG owns Trump’s social media platform, Truth Social. Trump himself owns 58% of the company and is barred from selling shares for six months. UPS Rises On Strong Revenue Targets United Parcel Service (UPS) shares are up 2.2% ahead of the open after releasing strong long-term revenue forecasts. The shipping giant said this morning it expects between $108 billion and $114 billion in adjusted revenue in 2026. That’s up sharply from the $91 billion the company reported in 2023. UPS also said it is expecting to hit an adjusted operating margin of over 13%. That margin is expected to hit at least 12% domestically and 18% to 19% internationally. In Case You Missed It New home sales fell unexpectedly in February as higher rates put pressure on buyers. The Census Bureau reported sales of newly built homes fell 0.3% to a seasonally adjusted annual rate of 662,000 units vs 675,000 expected. The drop came even as the median new home price fell 7.6% year over year to $400,500, the lowest since June 2021. Supply continued to rise with 463,000 new homes on the market at the end of February, representing an 8.4 month supply.
Continue Reading -->Coffee With Greta: Short Week
DJIA Futures: -71 (-0.2%) SPX Futures: -16 (-0.3%) NASDAQ Futures: -99 (-0.5%) Good morning friends! Futures are slipping to start the holiday-shortened trading week. Let’s get right to it! Boeing CEO To Step Down Boeing (BA) shares are up 3.8% ahead of the open after announcing a management shakeup. CEO Dave Calhoun will leave the company at the end of 2024. The chairman of the board, Larry Kellner, also announced he does not plan to stand for reelection at the annual meeting in May. The board has elected director Steve Mollenkopf to succeed him and he will lead the process of searching for a new CEO. The president and CEO of Boeing Commercial Airplanes is leaving the company effective immediately and will be replaced by the current Chief Operating Officer. In a memo to employees today, Calhoun said, “As you all know, the Alaska Airlines Flight 1282 accident was a watershed moment for Boeing. We must continue to respond to this accident with humility and complete transparency. We also must inculcate a total commitment to safety and quality at every level of our company. The eyes of the world are on us, and I know we will come through this moment a better company, building on all the learnings we accumulated as we worked together to rebuild Boeing over the last number of years.” Chipmakers Slip Intel (INTC) shares are falling 4% while Advanced Micro Devices (AMD) shares are down 3.7% in premarket trade following a report that China will block chips from both companies in its government computers and servers. The Financial Times reported that China has rolled out new guidelines that will phase out U.S. processors. Government agencies higher than the township level have reportedly been ordered to purchase “safe and reliable” processors and operating systems. There is a list of 18 approved processors which include chips from Huawei and state-backed group Phytium. Microsoft (MSFT) shares are also off 0.6% as the stricter guidelines impact the use of the company’s Windows operating system. Oil Prices Jump Oil prices are starting the new week higher following Ukrainian drone strikes on Russian refineries over the weekend. West Texas Intermediate crude futures are up 0.3%, just below $81 bbl, while Brent crude futures are also 0.3% higher, just under $86 bbl. Reuters reported that one of the major refining units at Russia’s Kuibyshev refinery was knocked out after a Ukrainian drone strike this weekend. British intelligence claims at least 10% of Russia’s refining capacity has been disrupted and “major repairs could take considerable time and expense.”
Continue Reading -->Coffee With Greta: Late Earnings Rush
DJIA Futures: -16 (-0.04%) SPX Futures: -3 (-0.1%) NASDAQ Futures: -25 (-0.1%) Good morning friends! Futures are slipping but still on track for a winning week. Let’s get right to it! Nike Falls After Disappointing Guidance Nike (NKE) shares are down 6.4% ahead of the open after beating fiscal Q3 expectations but issuing disappointing guidance for the year ahead. Here’s how the sneaker retailer’s results compared to analysts’ estimates: EPS: $0.98 vs $0.77 expected Revenue: $12.43 billion vs $12.28 billion expected Revenue was unchanged year over year as sales slowed in China. Nike reiterated its expectation for sales growth of just 1% from a year ago in fiscal Q4. On the earnings call, executives said the first half of fiscal 2025 will be challenging with sales expected to be down by low single-digit percentages year over year. FedEx Rallies On Profit Beat FedEx (FDX) shares are jumping 10.4% in premarket trade after topping fiscal Q3 profit expectations. Here’s how the shipping giant’s results compared to analysts’ estimates: EPS: $3.86 vs $3.43 expected Revenue: $21.7 billion vs $22 billion expected Sales were down from $22.2 billion in the same quarter a year ago, the sixth straight quarter of year-over-year declines. But it was also the third consecutive quarter of improved operating profit margins. FedEx’s operating profit margin rose to 6%, up 1% from a year ago and better than 5.5% expected. The company now expects full-year fiscal 2024 EPS between $17.25 and $18.25 vs the prior forecast for $17 to $18.50. Lululemon Tumbles On Weak Guidance Lululemon (LULU) shares are tumbling 13.1% ahead of the open after beating Q4 expectations but issuing soft guidance. Here’s how the athletic apparel retailers results compared to analysts’ estimates: EPS: $5.29 vs $5.00 expected Revenue: $3.21 billion vs $3.19 billion expected Revenue rose 16% year over year. But sales rose just 9% in the Americas, down sharply from the 29% growth a year ago. International sales jumped 54%. Lululemon forecast net revenue in Q1 between $2.18 billion and $2.20 billion vs $2.25 billion expected. The company expects EPS between $2.35 and $2.40 vs $2.55 expected. For the full year, Lululemon sees EPS between $14 and $14.20 on $10.7 billion to $10.8 billion in revenue vs estimates for EPS of $14.13 on $10.9 billion in sales. Reddit Slips After IPO Reddit (RDDT) shares are falling 3.3% in premarket trade a day after the company made its debut on Wall Street. The stock began trading on the New York Stock Exchange at $47 per share and hit a high of $57.80 mid-session. That came after the company priced its IPO at $34 per share on Wednesday. RDDT closed at $50.44 per share on Thursday, up more than 48.3% on the day and valuing the company at $9.5 billion.
Continue Reading -->Coffee With Greta: Stocks Rally After Dovish Fed
DJIA Futures: +125 (+0.3%) SPX Futures: +26 (+0.5%) NASDAQ Futures: +177 (+1.0%) Good morning friends! Futures are higher amid optimism about the future of Fed rate cuts. Let’s get right to it! Dovish Fed The major indexes all closed at fresh record highs on Wednesday after the Fed signaled it’s still planning for three rate cuts this year. The Federal Open Market Committee voted unanimously to keep the federal funds rate unchanged at 5.25% to 5.5%, as expected. But the updated Summary of Economic Projections showed the Central Bank still expects to cut rates by 25 basis points three times this year. Fed Chair Jerome Powell did not detail when the bank sees those cuts coming but said he does expect the data to cooperate. He said, “We believe that our policy rate is likely at its peak for this type of cycle, and that if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year.” CME Group’s FedWatch Tool now shows over 68% of traders anticipating the first cut in June. The dot plot also showed three rate cuts in 2025, one less than previously expected, three cuts in 2026, and two more cuts in the future. Weekly Jobless Claims Dip Weekly jobless claims fell unexpectedly last week as layoffs remain low. The Labor Department reported 210,000 Americans filed initial claims for unemployment benefits. That was down from 212,000 in the previous week and lower than 213,000 expected. Continuing claims rose by 4,000 to 1.81 million in the week ending March 9. Reddit Prices IPO At $34 Per Share Reddit is set to begin trading under the ticker symbol RDDT in today’s session. The company priced its IPO Wednesday at $34 per share and the offering brought in $519 million. The IPO values Reddit at nearly $6.5 billion, down from its last private market valuation of $10 billion in 2021. This is the first major social media company to go public since Pinterest (PINS) in 2019. Reddit sold 15.28 million shares in the offering and existing shareholders sold 6.72 million. Micron Soars After Earnings Micron Technology (MU) shares are surging 17.4% ahead of the open after crushing fiscal Q2 expectations. Here’s how the chipmaker’s results compared to analysts’ estimates: Adjusted EPS: $0.42 vs $0.25 per share loss expected Revenue: $5.82 billion vs $5.35 billion expected The company’s CEO said, “We believe Micron is one of the biggest beneficiaries in the semiconductor industry of the multi-year opportunity enabled by AI.” Micron forecast fiscal Q3 revenue of $6.6 billion vs $6.02 billion expected.
Continue Reading -->Coffee With Greta: Waiting On The Fed
DJIA Futures: -57 (-0.1%) SPX Futures: -4 (-0.1%) NASDAQ Futures: +25 (+0.1%) Good morning friends! Futures are mixed as traders await today’s Fed decision. Let’s get right to it! Fed Day The Federal Reserve’s two-day policy meeting wraps up today with an interest rate announcement at 2:900 p.m. ET. The Central Bank is not expected to change rates at this meeting. The focus for traders will be on the updated Summary of Economic Projections (dot plot) and the Chairman’s press conference at 2:30 p.m. The Fed’s most recent dot plot in December signaled plans for three rate cuts in 2024. But hotter-than-expected inflation and labor market data since then is expected to have possibly dialed those plans back. As of this morning, CME Group’s FedWatch Tool shows 55% of traders betting on the first rate cut in June. Chipotle Jumps After Announcing Stock Split Chipotle Mexican Grill (CMG) shares are up 5.5% ahead of the open after announcing plans for a 50-for-1 stock split. In a filing after hours on Tuesday, the company said its board had approved the split. It is now subject to shareholder approval at the annual meeting on June 6. If approved, shareholders of record as of June 18 will receive 49 additional shares for every one they own. The stock is expected to begin trading on a post-split basis when the market opens on June 26. Shares closed at a record high $2.797.56 on Tuesday and are up over 70% over the past year. Mortgage Demand Falls Weekly mortgage demand pulled back as rates pushed higher. The Mortgage Bankers Association reported total application volume fell 1.6% last week. Purchase applications fell 1% weekly and 14% year over year. Refinance applications dropped 3% weekly and 3% annually. The drop came as the average 30-year fixed contract rate rose to 6.97% from 6.84%. Mortgage News Daily currently shows the 30-year fixed rate back above 7%.
Continue Reading -->Coffee With Greta: Tech Declines
DJIA Futures: -30 (-0.1%) SPX Futures: -17 (-0.3%) NASDAQ Futures: -99 (-0.5%) Good morning friends! Futures are falling as tech stocks slip and traders await this week’s Fed decision. Let’s get right to it! Nvidia Falls After Announcing New Chips Nvidia (NVDA) shares are falling 2.4% ahead of the open after announcing new AI chips on the first day of its GTC Conference. The conference kicked off after the market close on Monday with a keynote speech by CEO Jensen Huang. He announced a new generation of AI chips and software named Blackwell. The first Blackwell chip is the GB200 and it will ship later this year. Huang said, “Hopper is fantastic, but we need bigger GPUs.” Hopper is the company’s current line of AI GPUs. Nvidia also unveiled new AI software called NIM as executives say the company is becoming less of just a chipmaker and more of a platform provider. SMCI Plunges On Share Offering Super Micro Computer (SMCI) shares are tumbling 10.3% in premarket trade after announcing a new share offering this morning. In a filing, SMCI said it plans to sell 2 million additional shares of common stock. That pushes its total shares outstanding to over 58 million. The move comes a day after SMCI began trading on the S&P 500 with a market cap near $60 billion. The filing said, “The principal purposes of this offering are to obtain additional capital to support our operations, including for the purchase of inventory and other working capital purposes, manufacturing capacity expansions and increased research and development (‘R&D’) investments.” Goldman Sachs is the underwriter for the new offering and has an option to purchase up to 300,000 additional SMCI shares within the next 30 days. Homebuilding Rebounds New home construction rebounded more than expected in February. The Census Bureau reported housing starts jumped 10.7% last month to a seasonally adjusted annual rate of 1.52 million units. That topped expectations for a 7.4% increase to 1.43 million and was the largest gain in nine months. Single-family starts jumped 11.6% while multi-family building rose 8.6%. January’s starts were also revised higher to a 12.3% drop vs the initial 14.8% decline. The number of new building permits issued also rose 1.9% to a seasonally adjusted annual rate of 1.52 million vs 1.49 million expected. That was the highest rate of new permits issued since August 2023. Single-family permits rose 1% and multi-family permits rose 2.4%. In Case You Missed It Homebuilder sentiment rose unexpectedly this month. The National Association of Homebuilders sentiment index rose 3 points to 51 vs 48 expected. It’s the fourth straight monthly gain and the first positive reading since July. Confidence in current sales conditions rose 4 points to 56, the six-month expectations index rose 2 points to 62, and buyer traffic increased 2 points to 34. Just 24% of builders said they are lowering home prices to attract buyers, down from 36% in December 2023.
Continue Reading -->Coffee With Greta: Waiting For NVDA’s AI Conference
DJIA Futures: +69 (+0.2%) SPX Futures: +38 (+0.7%) NASDAQ Futures: +215 (+1.2%) Good morning friends! Futures are higher as traders look ahead to Nvidia’s AI conference today and await this week’s Fed decision. Let’s get right to it! Nvidia Rises Ahead Of GTC Conference Nvidia (NVDA) shares are up 2.7% ahead of the open as traders await the start of the company’s GTC conference later today. The annual conference begins at 4:00 p.m. ET with a keynote speech by Nvidia CEO Jensen Huang. He’s expected to detail the company’s plans for the year ahead, especially in the AI space. In years past, Nvidia unveiled new GPUs at this conference. The company is widely expected to announce successors to its current AI GPUs today,. More than 300 speakers and companies are part of the event which runs through Wednesday. SMCI Joins S&P 500 Super Micro Computer (SMCI) shares are rising 2.6% in premarket trade as the stock is set to join the S&P 500. As of the open, SMCI shares will begin trading as part of the blue-chip index. SMCI is up nearly 300% year to date, riding the AI wave fueled by Nvidia. The company is a key supplier of servers for AI apps that work with Nvidia and Advanced Micro Devices (AMD) chips. SMCI joins the S&P with a $60 billion market cap and is trading at a PE ratio of 40. Fed Week Traders are awaiting this week’s Fed decision on Wednesday. The central bank kicks off its two-day policy meeting on Tuesday with the rate decision released at 2:00 p.m. ET on Wednesday and Chairman Jerome Powell’s press conference at 2:30 p.m. The Fed is not expected to change rates this week but focus will be on the updated Summary of Economic Projections. That summary, also known as the dot plot, shows where Fed officials expect rates to be over the next few years. The last dot plot in December showed officials expecting three rate cuts this year but hotter than expected inflation and labor market data since then may have changed their expectations.
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