Category Archives for Coffee With Greta
Coffee With Greta: Hot Jobs Report
DJIA Futures: +216 (+0.7%) SPX Futures: +22 (+0.5%) NASDAQ Futures: +42 (+0.3%) Good morning friends! Futures are higher as traders digest a hotter-than-expected May jobs report and the debt ceiling bill passes Congress. Let’s get right to it! Job Growth Surges In May The U.S. economy added far more jobs than expected in May. The Labor Department reported nonfarm payrolls rose by 339,000 last month while the unemployment rate jumped to 3.7% from 3.4% in April. The gain was sharply higher than economists’ expectations for 190,000 jobs. But the unemployment rate rose more than expectations for 3.5%> The higher unemployment rate is a signal more workers may now be searching for a job. Hourly wages rose 0.3% monthly as expected and 4.3% year over year, just below 4.4% expected. April’s job growth was also revised higher to 294,000 from 265,000 previously while March was revised up to 217,000 from 165,000. Senate Passes Debt Ceiling Bill The debt ceiling bill is now headed to President Biden’s desk after the Senate passed the legislation Thursday evening. The upper chamber approved the Fiscal Responsibility Act in a 63-36 vote. Biden is now expected to sign the bill today and address the nation at 7:00 p.m. ET. In a statement after the Senate vote, Biden said, “No one gets everything they want in a negotiation, but make no mistake: This bipartisan agreement is a big win for our economy and the American people.” The Treasury Department had given Congress a June 5 deadline to raise the debt ceiling in order to avoid a default. The legislation suspends the debt limit until January 1, 2025. Lululemon Surges As Sales Jump Lululemon Athletica (LULU) shares are up 14.9% ahead of the open after beating fiscal Q1 expectations and hiking its full-year outlook. Here’s how the athleisure retailer’s results compared to analysts’ estimates: EPS: $2.28 vs $1.98 expected Revenue: $2 billion vs $1.93 billion expected Revenue jumped 25% year over year as the company’s sales in China recovered. Revenue in China surged 79% from a year ago. The CFO said, “Our Q1 results were strong as guests responded well to our product offering in all our markets across the globe. A meaningful acceleration in our China sales trend, coupled with lower air freight, contributed to our better than planned financial performance.” Lululemon now expects full-year revenue of $9.44 billion to $9.51 billion up from $9.31 billion to $9.41 billion previously. The company also forecast full-year EPS of $11.74 to $11.94 vs its previous forecast for $11.50 to $11.72. Dell Tops Q1 Expectations Dell Technologies (DELL) shares are falling 2.1% in premarket trade despite beating fiscal Q1 expectations. Here’s how the computer maker’s results compared to analysts’ estimates: Adjusted EPS: $1.31 vs $0.86 expected Revenue: $20.9 billion vs $20.3 billion expected That revenue beat came even as sales dropped 20% year over year. Dell’s PC business, the Client Solutions Group, brought in $12 billion in revenue which was down 23% from a year ago but better than $11.4 billion expected. The company also reported improving margins as component costs fall.
Continue Reading -->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.
Continue Reading -->Coffee With Greta: Waiting On A Vote
Register now for my free Q&A with David Prince today! DJIA Futures: -112 (-0.3%) SPX Futures: -20 (-0.5%) NASDAQ Futures: -67 (-0.5%) Good morning friends! Futures are slipping as traders await a vote on the debt ceiling deal in the House. Let’s get right to it! Debt Ceiling Deal Clears Key Committee The House Rules Committee advanced the debt ceiling deal reached by President Biden and House Speaker Kevin McCarthy Tuesday night. The committee approved the bill in a 7-6 vote, sending it to the full House for a vote. A floor vote on the deal is expected around 8:30 p.m. ET today. A group of 20 House Republicans came out against the bill on Tuesday but it is still expected to pass the lower chamber. The legislation would then be sent to the Senate for a vote. American Airlines Raises Profit Outlook American Airlines (AAL) shares are up 2.4% ahead of the open after hiking its Q2 profit outlook. The airline now expects adjusted EPS between $1.45 and $1.65 this quarter vs $1.20 to $1.40 previously. The higher forecast is thanks to strong travel demand and lower fuel prices. Hewlett Packard Reports Mixed Results HP Inc (HPQ) shares are down 5.7% in premarket trade after reporting mixed fiscal Q2 results. Here’s how the PC maker’s results compared to analysts’ estimates: Non-GAAP EPS: $0.80 vs $0.76 expected Revenue: $12.9 billion vs $13.1 billion expected It was HP’s lowest quarterly revenue since the April 2020 quarter. Sales in the company’s Personal Systems group, which is its PC business, dropped 29% year over year to $8.2 billion vs $8.4 billion expected. HP forecast fiscal Q3 non-GAAP EPS of $0.81 to $0.91 vs $0.85 expected. The company narrowed its full-year forecast range for non-GAAP EPS to $3.30 to $3.50 vs $3.20 to $3.60 previously. Mortgage Demand Drops to 3-Month Low Mortgage demand fell to a three-month low last week as rates shot higher. The Mortgage Bankers Association reported purchase applications dropped 3% weekly and were down 31% year over year. Refinance applications fell 7% weekly and 45% annually. The drop came as the average 30-year contract rate popped higher to 6.91% from 6.69% the previously week. In Case You Missed It Home prices rose in March as buyers continue to struggle with low inventory. The S&P CoreLogic Case-Shiller national home price index rose 0.7% in March compared to March 2022. The index also rose 0.4% monthly. The release said, “March’s results suggest that the decline in home prices that began in June 2022 may have come to an end.” The 20-city index fell 1.1% annually and rose 0.5% monthly while the 10-city index dropped 0.8% annually and rose 0.6% monthly. Consumer confidence slipped to a 6-month low in May. The Conference Board’s consumer confidence index fell to 102.3 from 103.7 in April. That was better than expectations for the index to fall to 99. Consumers are feeling less confident about the labor market. The share of respondents who viewed jobs as “plentiful” fell to the lowest level since April 2021 while those who said jobs are “hard to get” hit a six-month high.
Continue Reading -->Coffee With Greta: Debt Ceiling Agreement Reached
Register now for my free Q&A with David Prince on Wednesday! DJIA Futures: -10 (-0.03%) SPX Futures: +22 (+0.5%) NASDAQ Futures: +187 (+1.3%) Good morning friends! Futures are mostly higher after the President and House Speaker reached a tentative debt ceiling agreement. Let’s get right to it! Debt Ceiling Deal President Biden and House Speaker Kevin McCarthy reached a deal on Sunday to raise the debt ceiling. Congress is expected to vote on the bill as early as tomorrow after the Treasury Department said they have until June 5 before a default. Biden said, “The agreement prevents the worst possible crisis, a default, for the first time in our nation’s history. Takes the threat of a catastrophic default off the table.” The deal would suspend the debt ceiling until January 1, 2025 and spending caps for the next two years. In fiscal year 2024, military spending would be capped at $886 billion and nonmilitary discretionary spending at $704 billion. In fiscal year 2025, military spending would increase to $895 billion and nonmilitary discretionary spending to $711 billion. Nvidia Eyes $1 Trillion Nvidia (NVDA) shares are up 4.5% ahead of the open and on track to hit a $1 trillion market cap at the bell. To hit the $1 trillion mark NVDA shares must hold above $404.86. The stock has rocketed toward the trillion dollar club since last Wednesday when the company beat Q1 expectations and forecast huge Q2 revenue numbers. The other $1 trillion stocks include Apple (AAPL), Alphabet (GOOGL), Amazon (AMZN), and Microsoft (MSFT). Other semiconductor stocks are moving alongside NVDA this morning with the VanEck Semiconductor ETF (SMH) up 2.3%. Musk Meets China’s Foreign Minister Tesla (TSLA) shares are up 4.0% in premarket trade after CEO Elon Musk met with China’s Foreign Minister in Beijing. The meeting was reportedly meant to show China is open to foreign business while Tesla reportedly signaled plans to further expand in the country. The FM said China’s electric vehicle market “has broad prospects for development” and said the country will continue to create a better “market-oriented” and “law-based” business environment for foreign companies like Tesla. Jobs Week This will be an important week of data for the Fed as traders look ahead to the May jobs report. The Conference Board releases the May consumer confidence index at 10:00 a.m. ET today. Then the Labor Department releases its April job openings and labor turnover survey Wednesday at 10:00 a.m. while the Fed releases its Beige Book at 2:00 p.m. ADP’s private employment report for May will be out Thursday morning along with weekly jobless claims and the Q1 productivity revision. On Friday morning, the Labor Department releases the official May jobs report.
Continue Reading -->Coffee With Greta: Stubborn Inflation
Register now for my free Q&A with David Prince next week on LinkedIn! DJIA Futures: +9 (+0.03%) SPX Futures: +1 (+0.02%) NASDAQ Futures: +23 (+0.2%) Good morning friends! Futures are flat as traders digest the latest inflation data and monitor progress in debt ceiling talks. Let’s get right to it! PCE Inflation Hotter Than Expected The Fed’s preferred inflation gauge ran hotter than expected in April. The Bureau of Economic Analysis’ personal consumption expenditures price index rose 0.4% monthly and 4.4% year over year last month. That was up from the 4.2% gain in March. The core PCE price index, which excludes food and energy and is the Fed’s preferred inflation measure, rose 0.4% monthly and 4.7% year over year. That was hotter than expectations for 0.3% monthly and 4.6% annually. The data showed the U.S. economy tilting back toward a services focus as goods prices increased 2.1% year over year but services prices jumped 5.5%. The report also showed consumer spending held up strong during the month despite stubborn inflation pressures. Consumer spending jumped 0.8% in April vs 0.4% expected. Personal incomes rose 0.4%, in line with expectations. Debt Ceiling Talks Continue Debt ceiling talks are still ongoing after negotiators reportedly moved closer to a deal on Thursday. But the final phase of talks is expected to be the most difficult. Republican Representative Patrick McHenry told reporters, “We’re at a sensitive phase, with sensitive issues that remain. Those sensitive issues are the thorniest issues that we’ve been discussing. Everybody’s trying to do a fine job of figuring out the finer details of this, but nothing’s done.” President Biden said, “The only way to move forward is with a bipartisan agreement, and I believe we’ll come to an agreement that allows us to move forward and protects the hardworking Americans of this country.” No in-person meeting at the White House is scheduled for today but McHenry said, “there’s alignment on the set of things that we need to work on.” Costco Slips After Earnings Miss Costco (COST) shares are down 0.2% ahead of the open after missing fiscal Q3 expectations. Here’s how the warehouse retailer’s results compared to analysts’ estimates: EPS: $2.93 vs $3.29 expected Revenue: $52.6 billion vs $54.5 billion expected Same-store sales rose just 0.3% globally and dipped 0.1% in the U.S., missing expectations for 2.8% growth. Coming Up: Consumer Sentiment The University of Michigan releases its final consumer sentiment index for May at 10:00 a.m. ET. That survey is expected to be unchanged from the flash reading of 57.7 earlier this month. The index also includes consumers’ inflation expectations over the next one, three, and five years. In Case You Missed It Pending home sales stalled in April as buyers struggle with low inventory. The National Association of Realtors reported the number of contracts signed to purchase a home was unchanged last month. That missed expectations for a 0.8% increase. Pending sales tumbled 20.3% year over year.
Continue Reading -->Coffee With Greta: Nvidia Surprise
DJIA Futures: -25 (-0.1%) SPX Futures: +35 (+0.8%) NASDAQ Futures: +306 (+2.2%) Good morning friends! Futures are mixed as tech stocks rally after Nvidia’s blowout earnings report. Let’s get right to it! Nvidia Skyrockets Nvidia (NVDA) shares are surging 29.0% ahead of the open after crushing Q1 expectations and hiking its Q2 guidance. Here’s how the chipmaker’s results compared to analysts’ estimates: Adjusted EPS: $1.09 vs $0.92 expected Revenue: $7.19 billion vs $6.52 billion Nvidia’s CEO said the company is seeing “surging demand” for its data center products and is going to have a “giant record year”. That group’s sales jumped 14% last quarter to $4.28 billion vs $3.9 billion expected. Nvidia forecast $11 billion in Q2 sales, crushing analysts’ estimates for $7.15 billion. Dollar Tree Shrinks After Cutting Guidance Dollar Tree (DLTR) shares are falling 12.1% in premarket trade after missing Q1 earnings expectations and cutting its full-year profit outlook. Here’s how the discount retailer’s results compared to analysts’ estimates: Adjusted EPS: $1.47 vs $1.53 expected Revenue: $7.32 billion vs $7.28 billion expected Dollar Tree maintained its full-year revenue outlook but cut guidance for earnings. The company now expects EPS between $5.73 and $6.13 vs $6.30 to $6.80 previously. The CEO said, “We are adjusting our EPS outlook as we expect the elevated shrink and unfavorable sales mix to persist through the balance of the year. We still expect earnings to be more back-end loaded this year as the benefits of lower ocean freight rates flow through.” Q1 GDP Growth Revised Higher Economic growth in the first quarter was unexpectedly revised higher. The Commerce Department’s second estimate shows annual GDP growth of 1.3% vs 1.1% initially estimated. The increase was primarily driven by an upward revision to inventory investment. Weekly Jobless Claims Lower Than Expected Weekly jobless claims came in lower than expected last week. The Labor Department reported 229,000 Americans filed initial claims for unemployment benefits. That was an increase from the revised 225,000 in the previous week. The previous week was initially estimated at 242,000. But mass fraud has been discovered in unemployment numbers in Massachusetts in recent weeks, which contributed to the apparent increase in nationwide unemployment. The state says it is working to address the problem and will amend previous reports. That could reduce overall claims for the weeks of May 6 and May 13. Debt Ceiling Talks Make Progress House Speaker Kevin McCarthy says talks for a debt ceiling deal are making progress but the two sides still disagree on spending. After negotiators met at the White House on Wednesday, McCarthy said, “We will come to an agreement worthy of the American public and there should not be any fear. Money’s coming in [to the Treasury] every day.” But lawmakers are still leaving Washington for Memorial Day recess beginning today, indicating no deal is close to needing a vote. Rep. Steve Scalise said Wednesday, “If some new agreement is reached between President [Joe] Biden and Speaker McCarthy, members will receive 24 hours notice in the event we need to return to Washington for any additional votes, either over the weekend or next week.” In response to the turmoil over the debt limit, credit rating agency Fitch places the United States’ AAA status on “rating watch negative”. The agency said, “The brinkmanship over the debt ceiling, failure of the U.S. authorities to meaningfully tackle medium-term fiscal challenges that will lead to rising budget deficits and a growing debt burden signal downside risks to U.S. creditworthiness.”
Continue Reading -->Coffee With Greta: Debt Ceiling Drag
DJIA Futures: -115 (-0.4%) SPX Futures: -18 (-0.4%) NASDAQ Futures: -76 (-0.6%) Good morning friends! Futures are falling as traders continue to monitor ongoing debt ceiling talks in Washington. Let’s get right to it! Debt Ceiling Drag Negotiators are expected to meet again today for talks on a debt ceiling deal. The meeting comes after little progress was made during talks on Tuesday after House Speaker Kevin McCarthy’s “productive” meeting with the President on Monday. Lawmakers are facing a June 1 deadline to raise the debt limit or risk a default. Intuit Drops As Tax Filings Slow Intuit (INTU) shares are falling 5.5% ahead of the open after missing fiscal Q3 revenue expectations as its tax filing business slowed. Here’s how the company’s results compared to analysts’ estimates: Adjusted EPS: $8.91 vs $8.48 expected Revenue: $6.02 billion vs $6.09 billion expected Intuit blamed the slowdown in its Turbo Tax business on people who chose not to file this year after filing in previous years to receive pandemic-era stimulus and credits. But the company hiked its full-year guidance. Intuit expects revenue growth of 12% to 13% in fiscal 2023 up from 10% to 12% previously. The company also expects full-year adjusted EPS between $14.20 and $14.25, which would represent growth of 20% vs 15% to 17% previously forecast. Abercrombie & Fitch Surges On Surprise Profit Abercrombie & Fitch (ANF) shares are surging 17.0% in premarket trade after reporting a surprise Q1 profit and hiking its outlook. Here’s how the retailer’s results compared to analysts’ estimates: Adjusted EPS: $0.39 vs $0.05 loss expected Revenue: $836 million vs $815 million expected Same-store sales rose 3% year over year vs the 1% decline analysts were anticipating. Abercrombie hiked its full-year guidance after the beat. The company now expects fiscal 2023 sales growth of 2% to 4% vs 1% to 3% previously. Abercrombie forecast net sales growth of 4% to 6% in Q2. Kohl’s Jumps On Surprise Profit Kohl’s (KSS) shares are rallying 13.1% ahead of the open after reporting a surprise Q1 profit and reiterating its full-year outlook. Here’s how the retailer’s results compared to analysts’ estimates: EPS: $0.13 vs $0.42 loss expected Revenue: $3.36 billion vs $3.34 billion expected Comparable sales fell 4.3% year over year, in line with expectations. Kohl’s expects full-year net sales to decline between 2% and 4% with EPS between $2.10 to $2.70. Meta Begins Latest Round of Layoffs Meta Platforms (META) shares are slipping 0.8% in premarket trade as the company reportedly begins its latest round of layoffs. About 10,000 total workers will lose their jobs between this month’s cuts and the ones enacted in April. Reuters first reported the latest round of cuts had started this morning. Meta employees in user experience, marketing, recruiting, and engineering later announced they had been let go on LinkedIn. The company has not confirmed the reports but the cuts were announced earlier this year as part of CEO Mark Zuckerberg’s “year of efficiency”. In Case You Missed It New home sales jumped unexpectedly in April as buyers struggle with low existing inventory. The Census Bureau reported new home sales rose 4.1% last month to a seasonally adjusted annual rate of 683,000 units vs 669,000 expected. March sales were revised lower to a rate of 656,000 units. But prices pulled back as rates remain high, the median price of a new home sold in April fell to $420,800.
Continue Reading -->Coffee With Greta: Waiting For A Deal
DJIA Futures: -51 (-0.2%) SPX Futures: -9 (-0.2%) NASDAQ Futures: -46 (-0.3%) Good morning friends! Futures are slipping as traders remain on edge over debt ceiling negotiations. Let’s get right to it! Still No Debt Ceiling Deal There is still no deal to raise the debt ceiling after President Biden met with House Speaker Kevin McCarthy on Monday. McCarthy told reporters that Monday’s meeting was “productive” and “professional”. He said, “I think the tone tonight was better than any other night we’ve had discussions.” Both teams of negotiators reportedly reconvened overnight to come up with a compromise deal. McCarthy said, “The president and I know the deadline, so I think we’re going to talk every day … until we get this done.” The deadline to raise the debt limit is June 1. Lowe’s Drops After Cutting Outlook Lowe’s (LOW) shares are falling 1.6% ahead of the open after cutting its full-year outlook despite beating Q1 expectations on the top and bottom line. Here’s how the home improvement retailer’s results compared to analysts’ estimates: Adjusted EPS: $3.67 vs $3.44 expected Revenue: $22.35 billion vs $21.6 billion expected Comparable sales dropped 4.3% year over which was higher than the 3.4% decline analysts were expecting. Lowe’s now expects full-year sales to range between $87 billion and $89 billion vs the previous forecast for $88 billion to $90 billion. The company also expects adjusted EPS of $13.20 to $13.60 vs $13.60 to $14.00 previously. Dick’s Sporting Goods Beats Q1 Estimates Dick’s Sporting Goods (DKS) shares are up 2.6% in premarket trade after beating Q1 estimates on the top and bottom line. Here’s how the sporting goods retailer’s results compared to analysts’ expectations: Adjusted EPS: $3.40 vs $3.18 expected Revenue: $2.842 billion vs $2.799 billion expected Same-store sales jumped 3.4% year over year. Dick’s reaffirmed its full-year outlook for EPS between $12.90 and $13.80 vs $13.38 expected by analysts. Zoom Slips Despite Earnings Beat Zoom Video Communications (ZM) shares are falling 1.4% before the opening bell despite beating fiscal Q1 expectations on the top and bottom line. Here’s how the video calling platform’s results compared to analysts’ estimates: Adjusted EPS: $1.16 vs $0.99 expected Revenue: $1.11 billion vs $1.08 billion expected Zoom also hiked its Q2 and full-year outlooks after the beat. The company now expects Q2 adjusted EPS of $1.04 to $1.06 on $1.11 billion to $1.12 billion expected. That topped analysts’ estimates for adjusted EPS of $1.05 on $1.11 billion in revenue. Zoom forecast full-year adjusted EPS of $4.25 to $4.31 on $4.47 billion to $4.49 billion in revenue vs EPS of $4.21 on $4.45 billion in revenue expected. The CEO said, “The solid start to the year has enabled us to raise our outlook for fiscal-year 2024 while continuing to invest in innovations such as AI to help make interactions more meaningful and communications more effective.”
Continue Reading -->Coffee With Greta: Debt Ceiling Drama
DJIA Futures: +37 (+0.1%) SPX Futures: +4 (+0.1%) NASDAQ Futures: +5 (+0.04%) Good morning friends! Futures are flat as traders remain on edge over debt ceiling negotiations. Let’s get right to it! Debt Ceiling Talks To Continue President Biden and House Speaker Kevin McCarthy are set to meet at the White House today to resume negotiations for a debt ceiling deal. The meeting comes after McCarthy said he had a “productive” phone call with Biden on Sunday. Staff reportedly restarted talks Sunday evening. Republicans are demanding spending cuts in exchange for a debt limit increase. But Biden said, “It’s time for Republicans to accept that there is no bipartisan deal to be made solely, solely, on their partisan terms.” Treasury Secretary Janet Yellen reaffirmed the June 1 deadline to come to an agreement. She said, “There can be no acceptable outcomes if the debt ceiling isn’t raised, regardless of what decisions we make. Fed’s Kashkari: June Pause Doesn’t Mean Rate Hikes Are Over Minneapolis Fed President Neel Kashkari is cautioning Americans against reading too much into a pause at the next Fed meeting. Kashkari told CNBC this morning that he’s open to a pause in June but that would not indicate the Fed is done hiking rates. He said, “If we did, if we were to skip in June, that does not mean we’re done with our tightening cycle. It means to me we’re getting more information.” CME Group’s FedWatch Tool shows 82.5% of traders expecting no rate hike on June 14. But Kashkari threw cold water on the market’s expectations of cuts later this year. He said, “Do we then start raising again in July? Potentially, and so that’s the most important thing to me is that we’re not taking it off the table.” The Fed has vowed to remain data-dependent for future rate decisions after the last 25bps hike in May. PacWest Sells Off Construction Loans PacWest Bancorp (PACW) shares are jumping 8.4% ahead of the open after the regional bank announced it has agreed to sell some real estate construction loans to Kennedy-Wilson Holdings (KW). KW shares are also up 2.9% in premarket trade. PacWest sold 74 loans with an outstanding balance of $2.6 billion to Kennedy-Wilson. The bank also plans to sell six more construction loans with a total balance of $363 million to the company. The transaction between PacWest and Kennedy-Wilson is expected to close in multiple deals during this current quarter and early Q3. JPMorgan Hikes Key Revenue Target JPMorgan Chase (JPM) shares are up 0.4% ahead of the opening bell after the bank hiked its full-year revenue target. Slides for an investor presentation today show the largest bank in the U.S. now expects to generate $84 billion in net interest income this year. That’s an increase of $3 billion from the guidance given in its Q1 earnings report, which was already an increase of $7 billion from the previous outlook. The higher forecast comes after JPMorgan’s takeover of First Republic Bank from regulators. But the bank did warn “sources of uncertainty” around deposits and the economy could impact its outlook. CEO Jamie Dimon is expected to speak in a Q&A session during today’s investor event.
Continue Reading -->Coffee With Greta: Awaiting Powell
DJIA Futures: +101 (+0.3%) SPX Futures: +13 (+0.3%) NASDAQ Futures: +10 (+0.1%) Good morning friends! Futures are rising as traders look ahead to a speech by the Fed Chair today. Let’s get right to it! Powell On Deck Traders are awaiting a speech by Fed Chair Jerome Powell at 11:00 a.m. ET today. Powell will participate in a panel discussion alongside former Fed Chair Ben Bernanke at the Thomas Laubach Research Conference. The market is focused on this speech after two Fed officials seemed to put their support behind a June rate hike on Thursday. Dallas Fed President Lorie Logan said in a speech, “We haven’t yet made the progress we need to make. And it’s a long way from here to 2 percent inflation.” St. Louis Fed President James Bullard later today the Financial Times, “I do expect disinflation, but it’s been slower than I would have liked, and it may warrant taking out some insurance by raising rates somewhat more to make sure that we really do get inflation under control.” Bullard added, “Our main risk is that inflation doesn’t go down or even turns around and goes higher, as it did in the 1970s.” CME Group’s FedWatch Tool still shows 64.4% of traders betting on no rate hike at the June 14 meeting. Foot Locker Tumbles After Earnings Miss Foot Locker (FL) shares are plunging 26.2% ahead of the open after missing Q1 expectations and cutting its full-year outlook. Here’s how the shoe retailer’s results compared to analysts’ estimates: EPS: $0.70 vs $0.76 expected Revenue: $1.93 billion vs $1.99 billion Same-store sales dropped 9.1% year over year vs the 7.7% decline expected. Foot Locker now expects full-year EPS of $2 to $2.25, down from $3.35 to $3.65 previously. The company also expects full-year sales to fall 6.5% to 8% vs 3.5% to 5.5% previously. The CEO said, “Our sales have since softened meaningfully given the tough macroeconomic backdrop, causing us to reduce our guidance for the year as we take more aggressive markdowns to both drive demand and manage inventory.” Deere Jumps On Earnings Beat Deere & Co (DE) shares are rising 3.4% in premarket trade after beating fiscal Q2 expectations on the top and bottom line. Here’s how the company’s results compared to analysts’ estimates: EPS: $9.56 vs $8.58 expected Revenue: $16 billion vs 14.9 billion expected Deere hiked its full-year guidance following the beat. The company now expects net income between $9.25 billion and $9.5 billion this year vs $8.75 billion and $9.25 billion previously. The CEO said, “As shown by the company’s outstanding second-quarter results, Deere continues to benefit from favorable market conditions and an improving operating environment. Though supply-chain constraints continue to present a challenge, we are seeing further improvement.” In Case You Missed It Existing home sales slowed less than expected in April. The National Association of Realtors reported existing sales fell 3.4% last month to a seasonally adjusted annual rate of 4.28 million units vs 4.26 million expected. Existing sales were down 23.2% year over year. There were 1.04 million homes for sale at the end of the month, up 1% from April 2022 but representing just a 2.9-month supply. The median price of an existing home sold in April fell 1.7% annually to $388,800. The Conference Board’s leading economic indicators index fell 0.6% as expected in April. That was the 13th straight monthly decline, signaling an impending recession. Eight of the 10 indicators included in the index declined. The measure of current economic conditions rose 0.3%.
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