Category Archives for Coffee With Greta
Coffee With Greta: Traders Wait For The Fed
DJIA Futures: -136 (-0.4%) SPX Futures: -9 (-0.2%) NASDAQ Futures: -7 (-0.1%) Good morning friends! Futures are lower as traders wait for the Fed. Let’s get right to it! Private Job Growth Slows Sharply Private sector job growth slowed more than expected at the beginning of 2023. Payroll firm ADP reported U.S. private employers added 106,000 jobs in January. That was lower than economists’ expectations for 190,000 and down from 253,000 in December. The hospitality industry continued to see the largest gains, adding 95,000 workers. Financial activities sector added 30,000, manufacturing added 23,000, and education and health services added 12,000. But the trade, transportation, and utilities sector lost 41,000 jobs, construction lost 24,000, and natural resources and mining fell by 3,000. Pay rose 7.3% year over year, relatively unchanged from December. But ADP’s chief economist said severe weather impacted the numbers and job growth may not have been as weak as this report indicates. The Fed has been looking for the labor market to weaken as it hikes interest rates to slow inflation. Today’s data comes ahead of the official January jobs report on Friday which is expected to show the U.S. economy added 187,000 jobs and the unemployment rate ticked higher to 3.6%. AMD Tops Q4 Estimates Advanced Micro Devices (AMD) shares are up 3.2% ahead of the open after beating Q4 expectations on the top and bottom line. Here’s how the chipmaker’s results compared to analysts’ estimates: Adjusted EPS: $0.69 vs $0.67 expected Revenue: $5.6 billion vs $5.5 billion expected The company continued to see slowing sales of its PC chips and graphics processors. But data center sales jumped 42% year over year while its embedded segment saw sales skyrocket 1,868% due to its purchase of chip manufacturer Xilinx. AMD forecast $5.3 billion in Q1 sales, which would be a 10% decline year over year and missed analysts’ estimate of $5.47 billion. Snap Tumbles On Revenue Miss Snap (SNAP) shares are falling 13% in premarket trade after its Q4 sales came up short. Here’s how the social media giant’s results compared to analysts’ expectations: Adjusted EPS: $0.14 vs $0.11 expected Revenue: $1.30 billion vs $1.31 billion expected Global daily active users: 375 million vs 375.3 million expected Average revenue per user: $3.47 vs $3.49 expected In a letter to investors, Snap called 2022 a “challenging year” marked by “macroeconomic headwinds, platform policy changes, and increased competition.” Sales rose 12% for the full year to $4.6 billion but the company declined to provide guidance for Q1. Snap said, “On the monetization side, we anticipate that the operating environment will remain challenging, as we expect the headwinds we have faced over the past year to persist throughout Q1.” Peloton Rises On Strong Fiscal Q2 Revenue, Narrowing Loss Peloton (PTON) shares are up 6.1% ahead of the open after reporting better-than-expected fiscal Q2 revenue. Here’s how the fitness equipment maker’s results compared to analysts’ expectations: Loss per share: $0.98 vs $0.64 expected Revenue: $792.7 million vs $710 million expected Although that loss was steeper than estimates, it was down from a loss of $1.39 per share a year earlier. It was the eighth quarterly loss in a row for the company. Peloton’s CEO called the results a possible “turning point” for the business as he focuses on an aggressive turnaround strategy. The company’s subscription revenue was higher than sales of its equipment for the third quarter in a row. Peloton’s connected fitness product sales dropped 52% year over year while subscription revenue jumped 22%. The company forecast sales will fall in the current quarter to a range of $690 million to $715 million. That was in line with analysts’ estimates for $692.1 million. Mortgage Demand Pulls Back Mortgage demand fell last week despite rates continuing to fall. The Mortgage Bankers Association reported total application volume fell 9% weekly. Purchase applications fell 10% weekly and were 41% lower year over year. Refinance applications dropped 7% weekly and 80% annually. The drop came despite the average 30-year fixed contract rate falling to 6.19% from 6.2%. MBA’s chief economist said buyers are still struggling with tight supply but activity is expected to increase soon. He said, “Purchase activity is expected to pick up as the spring homebuying season gets underway, bolstered by lower rates and moderating home-price growth.” Coming Up: JOLTS and Fed Decision The Labor Department releases its December job openings and labor turnover survey (JOLTS) at 10:00 a.m. ET. That survey is expected to show the number of vacant jobs fell to 10.3 million at the end of 2022 from 10.5 million in November. The Fed then releases its first rate decision of the year at 2:00 p.m. ET followed by Chairman Jerome Powell’s press conference at 2:30. CME Group’s FedWatch Tool shows over 99% of traders expect the bank to raise the federal funds rate by 25 basis points. Key Earnings After The Close Here’s a look at the companies set to report earnings after the close today: Meta Platforms (META) In Case You Missed It Consumer confidence fell unexpectedly at the beginning of the year as Americans grew wearier of an impending recession. The Conference Board’s consumer confidence index fell to 107.1 in January from a revised 109 in December. That missed economists’ expectations for an increase to 109.5. The drop was mainly due to a decline in the expectations index which fell to 77.8 from 83.4. Any reading below 80 typically signals a recession within the next year. PayPal (PYPL) announced plans to lay off 2,000 employees on Tuesday. Those cuts represent about 7% of the company’s workforce. PayPal’s president and CEO said the company is working to address the “challenging macroeconomic environment.”
Continue Reading -->Coffee With Greta: Earnings Ramp Up
DJIA Futures: +75 (+0.2%) SPX Futures: +11 (+0.3%) NASDAQ Futures: +31 (+0.3%) Good morning friends! Futures are rising as traders digest the latest batch of Q4 earnings and the Fed meeting is set to begin today. Let’s get right to it! General Motors Rallies After Smashing Q4 Expectations General Motors (GM) are jumping 4.7% ahead of the open after sharply beating Q4 expectations. Here’s how the automaker’s results compared to analysts’ expectations: Adjusted EPS: $2.12 vs $1.69 expected Revenue: $43.11 billion vs $40.65 billion expected GM’s full-year revenue came in at $156.7 billion with adjusted earnings before interest and tax hitting a record $14.5 billion. But profit margins are shrinking, the company’s adjusted profit margin fell to 9.2% in 2022, down 2.1% from the previous year. GM forecast 2023 adjusted EPS will be between $6 and $7. Although that would be lower than 2022, the outlook was above analysts’ expectations for adjusted EPS of $5.73 this year. Exxon Slips On Weak Q4 Revenue Exxon Mobil (XOM) shares are slipping 0.8% in premarket trade after reporting mixed Q4 results. Here’s how the oil giant’s results compared to analysts’ expectations: Adjusted EPS: $3.40 vs $3.29 expected Revenue: $95.43 billion vs $97.3 billion expected The company raked in a record $56 billion profit for all of 2022. But analysts expect Exxon’s profit may have already peaked, forecasting EPS will not be higher than $3 in any quarter this year or next. Pfizer Falls On Downbeat Guidance Pfizer (PFE) shares are falling 2.8% ahead of the open as weak guidance overshadows a Q4 earnings beat. Here’s how the pharmaceutical giant’s results compared to analysts’ expectations: Adjusted EPS: $1.14 vs $1.05 expected Revenue: $24.3 billion vs $24.28 billion expected The company brought in a record $100.3 billion profit in 2022, driven by more than $50 billion in Covid vaccine and antiviral sales. But Pfizer expects sales to fall sharply this year. The company forecast revenue will decline up to 33% year over year as Covid vaccine sales slow. Pfizer forecast 2023 EPS of $3.25 to $3.45, down by as much as 50% from the record $6.58 last year. McDonald’s Drops Despite Q4 Earnings Beat McDonald’s (MCD) shares are falling 1.8% in premarket trade despite beating Q4 expectations on the top and bottom line. Here’s how the fast food giant’s results compared to analysts’ expectations: EPS: $2.59 vs $2.45 expected Revenue: $5.93 billion vs $5.68 billion expected McDonald’s same-store sales in the U.S. jumped 10.3% beating estimates of 8.1%, as demand jumped and customers paid higher prices. But the CEO warned the company is expecting short-term inflation pressures to continue in 2023. The company expects to open 1,900 new restaurants globally this year, including more than 400 in the U.S. UPS Jumps On Q4 Earnings Beat UPS (UPS) shares are rising 1.9% ahead of the open after beating Q4 profit expectations. Here’s how the shipping giant’s results compared to analysts’ expectations: Adjusted EPS: $3.62 vs $3.59 expected Revenue: $27.03 billion vs $28.09 billion expected Even as shipping volumes have decreased and costs rise, UPS has benefited from elevated prices. The company raised shipping rates by 6.9% at the end of 2022. But UPS offered full-year 2023 guidance that was below analysts’ estimates. The company expects between $97 billion and $99.4 billion in revenue this year vs analysts’ expectations of $99.98 billion. Consumer Confidence Expected To Rise The Conference Board releases its January consumer confidence index at 10:00 a.m. ET. That survey is expected to rise to 109.5 from 108.4 in December. Last month’s figure was the highest since April 2022 as inflation has started to cool. But consumers are still expecting a recession to hit the U.S. economy in the months ahead. Key Earnings After The Close Here’s a look at the companies set to report earnings after the close today: Advanced Micro Devices (AMD) Snap (SNAP)
Continue Reading -->Coffee With Greta: Traders Brace For Big Week
DJIA Futures: -145 (-0.4%) SPX Futures: -33 (-0.8%) NASDAQ Futures: -138 (-1.1%) Good morning friends! Futures are lower as traders gear up for a big week of earnings, the Fed decision, and new jobs data. Let’s get right to it! Big Week For Traders Wall Street may be in for a wild ride this week as earnings season picks up and the Fed meets. The Fed meeting kicks off on Tuesday with the rate hike decision set to be released Wednesday. CME Group’s FedWatch Tool shows 98.1% of traders expect a 25 basis point hike. That survey shows the market pricing in one more 25 basis point move at the next meeting and then traders are split on if the central bank will pause rate hikes after that. This week also includes key jobs data, something the Fed has been watching closely. The official January jobs report comes out Friday morning, with ADP’s private employment report on Wednesday morning. And it will be the busiest week of earnings yet starting with results from Exxon Mobil (XOM), Pfizer (PFE), UPS (UPS), McDonald’s (MCD), Caterpillar (CAT), and General Motors (GM) Tuesday morning. Yields Rise Ahead Of Fed Meeting Treasury yields are rising today as traders sell off bonds ahead of the Fed meeting. The 2-year yield is up 5 basis points to 4.25% while the 10-year yield is up 3 basis points to 3.55%. The market is anticipating the smallest rate hike from the Fed since it began the current tightening cycle last May. But concern is rising on Wall Street that the bank will over-tighten and plunge the economy into a recession. The latest inflation data has shown the Fed’s rate hikes having an impact on prices. But Fed officials have maintained the bank’s stance that rates still need to rise further before pausing. Ford Cuts Mustang Mach-E Prices Ford (F) shares are slipping 2.4% ahead of the open after announcing it will increase production and cut prices of its electric Mustang Mach-E. The automaker said this morning that the price cuts will range from $600 to $5,000 depending on the model. The Mach-E starting price will now range from $46,000 to $64,000. The move follows Tesla’s (TSLA) decision to cut prices on its Model Y earlier this month. The chief customer officer of Ford’s EV business said, “We are responding to changes in the marketplace. As we look and want to stay competitive in the marketplace, we’re having to respond.” But the cuts mean some models of the Mach-E will not be profitable on a per-unit basis. The company will also increase production to 130,000 units annually from 78,000 currently. Philips Cuts 6,000 Jobs Philips (PHG) shares are rallying 5.7% in premarket trade after announcing job cuts. The Dutch health technology company said today it will lay off 6,000 employees. The move is meant to lower costs and restore its profitability after a recall of respiratory devices knocked 70% off of its market value. Half of those cuts will be made this year with the other half by 2025. The company’s new CEO said the cuts are a “necessary intervention to help us to become competitive and lean in the way we go forward in the market.” The latest move comes on top of Philips’ announcement to cut 4,000 jobs last October. In Case You Missed It Lucid Group (LCID) shares skyrocketed 43% on Friday amid takeover rumors. The stock was halted several times throughout the session as trading volume jumped to nearly eight times the average. A stock research blog speculated that Saudi Arabia Public Investment Fund would acquire the electric automaker. LCID shares are up 0.9% ahead of the open today.
Continue Reading -->Coffee With Greta: PCE Inflation Cools
DJIA Futures: -24 (-0.1%) SPX Futures: -16 (-0.4%) NASDAQ Futures: -69 (-0.6%) Good morning friends! Futures are slipping despite new data showing inflation pressures continued to cool at the end of 2022 as disappointing earnings weigh on the market. Let’s get right to it! PCE Inflation Cools The Fed’s favorite inflation gauge continued to cool in December. The Bureau of Economic Analysis’ personal consumption expenditures price index rose 0.1% monthly and 5% year over year. That was down from the 5.5% annual gain in November. The core PCE price index, which excludes food, energy, and trade services, rose 0.3% monthly and 4.4% year over year. That was also down from the 4.7% annual gain in November and in line with economists’ expectations. Intel Tumbles After Earnings Miss, Weak Guidance Intel (INTC) shares are tumbling 9.8% ahead of the open after missing Q4 expectations and issuing weak guidance. Here’s how the chipmaker’s results compared to analysts’ expectations: Adjusted EPS: $0.10 vs $0.21 expected Revenue: $14.04 billion vs $14.49 billion expected Intel missed its own prior forecast of EPS of $0.20 on $14 billion to $15 billion in revenue. The tech company forecast an adjusted loss of $0.15 per share on revenue of about $10.5 billion to $11.5 billion in Q1. Intel also expects gross margins of just 34.1% in the current quarter, far off from the 51% to 53% goal the company set last year and down from 55.1% in Q1 2022. The company blamed an inventory glut for the expected struggles this quarter as customers work through an oversupply of chips. The CEO told investors, “While we know this dynamic will reverse, predicting when is difficult.” Chevron Slips As Earnings Come Up Short Chevron (CVX) shares are down 1.4% in premarket trade after missing Q4 profit expectations. Here’s how the oil giant’s results compared to analysts’ expectations: Adjusted EPS: $4.09 vs $4.33 expected Revenue: $56.47 billion vs $52.68 billion expected For the full year, Chevron earned a record $36.5 billion in profit. That was about $10 billion higher than its previous record set in 2011. The CEO said, “We delivered record earnings and cash flow in 2022, while increasing investments and growing U.S. production to a company record.” Bed Bath & Beyond Defaults On Credit Line Bed Bath & Beyond (BBBY) shares are up 1.5% ahead of the open as potential bankruptcy hopes rise after the retailer defaulted on its credit line with JPMorgan. In an SEC filing, Bed Bath said it “does not have sufficient resources to repay the amounts under the Credit Facilities and this will lead the Company to consider all strategic alternatives, including restructuring its debt under the U.S. Bankruptcy Code.” The company’s debt load includes a $550 million asset-backed loan with JPMorgan, $375 million with lender Sixth Street, and nearly $1.2 billion in unsecured Treasury notes. In a separate filing today, Bed Bath said its Board has named restructuring expert Carol Flaton as an independent director. Key Earnings Next Week Earnings season continues to pick up steam next week. Here’s some of the major companies set to report: SoFi (SOFI) Exxon Mobil (XOM) Pfizer (PFE) McDonald’s (MCD) UPS (UPS) Caterpillar (CAT) Advanced Micro Devices (AMD) General Motors (GM) Spotify (SPOT) Snap (SNAP) Meta Platforms (META) Apple (AAPL) Alphabet (GOOGL) Amazon (AMZN) Ford (F)
Continue Reading -->Coffee With Greta: Stocks Rise As GDP Beats
DJIA Futures: +87 (+0.3%) SPX Futures: +23 (+0.6%) NASDAQ Futures: +116 (+1.0%) Good morning friends! Futures are higher as traders digest strong Q4 GDP data and an earnings beat from Tesla. Let’s get right to it! U.S. Economy Expands More Than Expected The U.S. economy grew more than expected at the end of 2022. The Commerce Department’s first estimate shows GDP rose at a 2.9% annualized pace in Q4. That was better than economists’ expectations for 2.8% but still down from 3.2% growth in Q3. The data showed consumer spending remained strong at the end of the year, up 2.1% on a quarterly basis. Inflation pressures also cooled with the personal consumption expenditures price index increasing 3.2%, down from 4.8% in Q3. The slowdown in GDP growth from Q3 to Q4 was largely driven by lower residential fixed investment which plunged 26.7% as the housing market slowed. Exports also declined 1.3% in the quarter. Tesla Beats Q4 Expectations Tesla (TSLA) shares are rallying 8.8% ahead of the open after reporting record revenue in Q4 and beating earnings expectations. Here’s how the electric automaker’s results compared to analysts’ estimates: Adjusted EPS: $1.19 vs $1.13 expected Revenue: $24.32 billion vs $24.16 billion expected Automotive revenue jumped 33% year over year but gross margins came in at 25.9%, the lowest figure in five years. Tesla blamed those smaller margins on lower sales prices, saying average sales prices have “generally been on a downward trajectory for many years”. The company most recently cut prices on its cars in the U.S. and China in late 2022. IBM Sales Top Estimates IBM (IBM) shares are slipping 2.2% in premarket trade despite reporting better-than-expected sales in the fourth quarter. Here’s how the company’s results compared to analysts’ estimates: Adjusted EPS: $3.60 as expected Revenue: $16.69 billion vs $16.4 billion expected IBM’s total revenue was flat year over year, beating expectations for the first decline in two years. For the full year, the company’s revenue jumped 6% to $60.5 billion. IBM reiterated its previous forecast for 2023 revenue growth in the mid-single digits, suggesting a total of about $63.5 billion vs $60.8 billion expected. The company is projecting $10.5 billion in free cash flow this year vs $11.1 billion expected. American Airlines Beats Earnings Estimates American Airlines (AAL) shares are up 1.9% ahead of the open after beating Q4 earnings estimates. Here’s how the airline’s results compared to analysts’ expectations: Adjusted EPS: $1.17 vs $1.14 expected Revenue: $13.19 billion vs $13.20 billion expected Revenue jumped 16.6% compared to the same quarter in 2019 as travelers paid higher fare prices. That revenue total was a new record for the company despite operating 6.1% less capacity than Q4 2019. American brought in $127 million in net income for all of 2022, its first full-year profit since 2019. The carrier forecast Q1 capacity will be 8% to 10% higher year over year. Southwest Reports Worse-Than-Expected Q4 Loss Southwest Airlines (LUV) shares are dropping 2.6% in premarket trade after reporting a steeper Q4 loss than expected. Here’s how the carrier’s results compared to analysts’ estimates: Adjusted loss per share: $0.38 vs $0.12 expected Revenue: $6.17 billion vs $6.16 billion expected That loss was driven by the mass cancellation of about 16,700 Southwest flights between December 21 and December 31. The company said it expects that meltdown to continue weighing on its bottom line in Q1. Southwest said it expects to post another loss in Q1, sharply missing analysts’ expectations for a profit of $0.19 per share. The airline reported a $529 million profit for the full-year 2022, down 45% from a year earlier. Key Earnings After The Close Here’s a look at the companies set to report earnings after the close today: Intel (INTC) Visa (V)
Continue Reading -->Coffee With Greta: Microsoft’s Gloomy Outlook Weighs On Tech
DJIA Futures: -273 (-0.8%) SPX Futures: -42 (-1.0%) NASDAQ Futures: -194 (-1.6%) Good morning friends! Futures are falling as Microsoft’s gloomy forecast drags down the tech sector. Let’s get right to it! Microsoft Drops On Weak Forecast Microsoft (MSFT) shares are falling 3% ahead of the open after weak guidance overshadows a fiscal Q2 earnings beat. Here’s how the tech giant’s results compared to analysts’ estimates: Adjusted EPS: $2.32 vs $2.29 expected Revenue: $52.75 billion vs $52.94 billion expected Total revenue rose just 2% year over year which was the slowest rate since 2016. Microsoft’s Intelligent Cloud segment brought in $21.51 billion in revenue, up 18% from a year ago and better than analysts’ expectations of $21.44 billion. But executives told analysts on the conference call that they expect the weakening tech environment to continue. Microsoft said it expects $50.5 billion to $51.5 billion in fiscal Q3 revenue, falling short of estimates for $52.43 billion. Boeing Slips After Surprise Q4 Loss Boeing (BA) shares are down 2.6% in premarket trade after reporting an unexpected Q4 loss. Here’s how the plane maker’s results compared to analysts’ expectations: Adjusted loss per share: $1.26 vs $0.26 EPS expected Revenue: $19.98 billion vs $20.38 billion expected The profit loss was caused by supply chain issues which caused higher costs. Boeing’s commercial aircraft unit generated $9.2 billion in Q4 sales, up 94% year over year. The company generated $3.1 billion in free-cash flow last quarter, better than expected. It had $2.3 billion in cash flow for the full-year, the best since 2018. Boeing reiterated its forecast to generate between $3 billion and $5 billion in free-cash flow this year. Kimberly-Clark Falls After Q4 Sales Miss Kimberly-Clark (KMB) shares are down 4% ahead of the open after reporting mixed Q4 results. Here’s how the consumer goods giant’s results compared to analysts’ expectations: Adjusted EPS: $1.54 vs $1.51 expected Revenue: $4.96 billion vs $4.99 billion expected The drop in revenue came as sales volume declined 7% but pricing rose 10%. Kimberly-Clark forecast sales will be flat to up 2% in 2023 vs analysts’ expectations for 1% growth. AT&T Jumps On Earnings Beat AT&T (T) shares are up 2.4% in premarket trade after beating Q4 profit expectations. Here’s how the company’s results compared to analysts’ estimates: Adjusted EPS: $0.61 vs $0.57 expected Revenue: $31.3 billion vs $31.4 billion expected AT&T added 656,000 monthly cell phone subscribers in the quarter vs 570,000 expected, bringing the 2022 total to nearly 2.9 million. The company forecast adjusted EPS of $2.35 to $2.45 for the full-year 2023 vs $2.53 expected. AT&T is targeting $16 billion or more in free-cash flow this year vs $16.2 billion estimates Mortgage Demand Rises As Rates Hit 4-Month Low Mortgage demand jumped last week as rates fell for the third week in a row. The Mortgage Bankers Association reported total application volume rose 7% last week. Purchase applications rose 3% weekly and were down 39% year over year. Refinance applications jumped 15% weekly and were down 77% annually. The jump came as the average 30-year contract rate fell to 6.2% from 6.23%, the lowest since September. Key Earnings After The Close Here’s a look at the companies set to report earnings after the close today: Tesla (TSLA) IBM (IBM) ServiceNow (NOW) Levi Strauss (LEVI)
Continue Reading -->Coffee With Greta: Traders Focus On Guidance In Earnings
DJIA Futures: -150 (-0.4%) SPX Futures: -20 (-0.5%) NASDAQ Futures: -86 (-0.7%) Good morning friends! Futures are falling as traders digest new Q4 earnings. Let’s get right to it! 3M Drops After Earnings Miss, Weak Outlook 3M (MMM) shares are down 4.5% ahead of the open after the company missed Q4 expectations and issued weak guidance. Here’s how the manufacturing giant’s results compared to analysts’ expectations: Adjusted EPS: $2.28 vs $2.36 expected Revenue: $8.1 billion as expected For the full year, 3M earned $10.10 per share in 2022. But the company expects profits to fall this year. 3M forecast 2023 earnings will be between $8.50 and $9 per share vs analysts’ expectations of $10.20. Sales are expected to fall between 2% and 6% compared to last year as consumer electronics demand is down “significantly”. The company also cited “near-term weakness in consumer discretionary spending.” 3M also announced plans to cut about 2,500 manufacturing jobs around the world as the company prepares for those challenges. Johnson & Johnson Slips Despite Earnings Beat Johnson & Johnson (JNJ) shares are falling 1.1% in premarket trade despite reporting better-than-expected Q4 results and issuing strong guidance. Here’s how the pharmaceutical giant’s results compared to analysts’ expectations: Adjusted EPS: $2.35 vs $2.23 expected Revenue: $23.71 billion vs $23.896 billion expected Revenue fell 4.4% year over year while unadjusted profits were down 25.7%. Johnson & Johnson forecast full-year 2023 EPS between $10.45 to $10.65 vs $10.33 expected. General Electric Earnings Beat, Outlook Falls Short General Electric (GE) shares are down 0.4% ahead of the open after beating Q4 earnings expectations but issuing weak guidance. Here’s how the company’s results compared to analysts’ expectations: Adjusted EPS: $1.24 vs $1.15 expected Revenue: $21.79 billion vs $21.25 billion expected Free cash flow: $4.3 billion vs $3.98 billion expected Total revenue jumped 7% year over year. That growth was largely driven by GE’s aerospace division which saw revenue rise 25.7%, power revenue rose 26.4%, renewable energy revenue increased 3.7%, and healthcare revenue slipped 0.4%. The company forecast 2023 adjusted EPS between $1.60 and $2.00 vs analysts’ expectations of $2.37. Verizon Falls On Disappointing Outlook Verizon (VZ) shares are falling 2.3% ahead of the open after its 2023 outlook disappointed. Here’s how the cell phone giant’s Q4 results compared to analysts’ expectations: EPS: $1.19 as expected Revenue: $35.3 billion vs $35.1 billion expected Verizon added 41,000 new monthly wireless subscribers last quarter after losing 189,000 in Q3 and 215,000 in Q2. The company also added 416,000 broadband users in Q4, up from 377,000 in Q3 and is best performance in more than a decade. Verizon forecast full-year 2023 adjusted EPS of $4.55 to $4.85 vs $4.96 expected. In Case You Missed It The Conference Board’s leading economic indicators index fell more than expected in December. The index slumped 1% vs economists’ expectations for a 0.7% decline. That drop was due to a softening labor market, a slowdown in manufacturing activity, and fewer homes being built. The continued decline in LEI signals a recession is likely in the near term.
Continue Reading -->Coffee With Greta: Traders Anticipate Fed Pivot
DJIA Futures: +70 (+0.2%) SPX Futures: +4 (+0.1%) NASDAQ Futures: +13 (+0.1%) Good morning friends! Futures are rising as traders gear up for a busy earnings week and look ahead to a smaller rate hike next week. Let’s get right to it! Fed Pivot Expected Wall Street is feeling confident the Fed will continue to dial back the size of its rate hikes at the next meeting. CME Group’s FedWatch Tool shows 98.7% of traders expect the central bank to approve a 25 basis point move at the February 1st meeting. That would be the smallest rate hike since the current tightening cycle started in spring 2022. Spotify To Cut 6% Of Workforce Spotify (SPOT) shares are up 5.6% ahead of the open after announcing layoffs this morning. The streaming giant said it plans to cut 6% of its workforce or roughly 600 jobs. The chief content and advertising business officer will also depart the company as part of a broader reorganization. Spotify is the latest tech company to cut jobs in the face of lower ad spending amid the current demand downturn. Activist Investor Takes A Stake In Salesforce Salesforce (CRM) shares are rising 4.5% in premarket trade following reports that activist investor Elliott Management has bought a large stake in the company. Elliott’s managing partner told Reuters, “We look forward to working constructively with Salesforce to realize the value befitting a company of its stature.” He also called Salesforce “one of the preeminent software companies in the world.” It’s unclear what Elliott may push for at Salesforce but the investment comes after the company announced job cuts and office closures earlier this year. Big Banks Team Up On New Digital Wallet PayPal (PYPL) shares are falling 1.8% ahead of the open following reports that the nation’s largest banks are teaming up to create a new digital wallet. JPMorgan Chase (JPM), Bank of America (BAC), and Wells Fargo (WFC) are all reportedly part of the project with four other banks. The Wall Street Journal reported the digital wallet would be managed by Early Warning Services LLC, which is the bank-owned company that operates Zelle. The digital wallet would be linked to shoppers’ debit and credit cards and the goal is to compete with PayPal and Apple’s (AAPL) Apple Pay. Busy Earnings Week Earnings season picks up steam this week with several key companies reporting. Here’s a look at the highlights: Tuesday AM: 3M (MMM), Johnson & Johnson (J&J), General Electric (GM) Tuesday PM: Microsoft (MSFT) Wednesday AM: Boeing (BA), Kimberly-Clark (KMB) Wednesday PM: Tesla (TSLA) Thursday AM: American Airlines (AAL) Thursday PM: Intel (INTC) Friday AM: Chevron (CVX)
Continue Reading -->Coffee With Greta: Netflix Subscribers Surge
DJIA Futures: -3 (-0.01%) SPX Futures: +9 (+0.2%) NASDAQ Futures: +72 (+0.6%) Good morning friends! Futures are mostly higher as Netflix shares boost the tech sector. Let’s get right to it! Netflix Rallies As Subscribers Surge Netflix (NFLX) shares are jumping 6.2% ahead of the open after sharply beating Q4 subscriber growth expectations. Here’s how the streaming giant’s results compared to analysts’ estimates: EPS: $0.12 vs $0.45 expected Revenue: $7.85 billion as expected New global paid net subscribers: 7.66 million vs 4.57 million expected The profit miss was largely due to a loss related to euro-denominated debt but the company’s 7% margins topped analysts’ expectations. Netflix also announced founder Reed Hastings will step down as CEO. Hastings will remain with the company as executive chairman and co-CEO Ted Sarandos will remain in his position. Current COO Greg Peters will take over Hastings’ spot as co-CEO with Saranados. Google Announces Layoffs, Delays Portion Of Bonuses Alphabet (GOOGL) shares are up 3.2% in premarket trade after announcing layoffs this morning. The tech giant’s CEO Sundar Pichai sent an email to employees saying they plan to layoff 12,000 workers. Pichai said layoffs in the U.S. will begin immediately but “will take longer due to local law and practices” in other countries. U.S.-based employees will receive 16 weeks of severance pay plus two weeks for each additional year they’ve worked for Google. The company is also delaying a portion of its annual employee bonus checks. Google employees usually receive their full bonus in January. But now, the tech giant is paying full-time employees 80% of their bonus this month and the remaining 20% in March or April. Moving forward, full bonuses will be paid in March. Nordstrom Sinks After Slashing Guidance After Weak Holiday Sales Nordstrom (JNW) shares are falling 6.9% ahead of the open after reporting weak holiday sales and slashing its guidance. The retailer said net sales dropped 3.5% year over year in the nine-week holiday shopping period that ended December 31. Nordstrom’s net sales fell 1.7% while Nordstrom Rack sales tumbled 7.6%. Those weak sales caused the company to cut its earnings and margin expectations for the full fiscal year. Nordstrom expects full-year revenue growth to be at the low end of its previously announced range of 5% to 7%. The retailer expected adjusted EPS to range between $1.50 and $1.70 vs $2.30 to $2.60 previously. CEO Erik Nordstrom said, “While we continue to see greater resilience in our higher income cohorts, it is clear that consumers are being more selective with their spending given the broader macro environment.” The company was also forced to mark down merchandise more than expected during the holiday season in order to clear excess inventory. Nordstrom reports Q4 results on March 2. The disappointing holiday results from Nordstrom are dragging down other retail stocks in premarket trade. Macy’s (M) is down 2.6%, Kohl’s (KSS) is falling 3.5%, and Dillard’s (DDS) is down 1.3%. Existing Home Sales Expected To Fall The National Association of Realtors reports existing home sales for December at 10:00 a.m. ET. That report is expected to show sales fell to a seasonally adjusted annual rate of 3.95 million units last month from 4.09 million in November. That would be the 11th straight month of declining sales as the housing market has weakened due to higher mortgage rates. Key Earnings Next Week Earnings season picks up steam next week with several key companies reporting. Here’s a look at the highlights: Tuesday AM: 3M (MMM), Johnson & Johnson (J&J), General Electric (GM) Tuesday PM: Microsoft (MSFT) Wednesday AM: Boeing (BA), Kimberly-Clark (KMB) Wednesday PM: Tesla (TSLA) Thursday AM: American Airlines (AAL) Thursday PM: Intel (INTC) Friday AM: Chevron (CVX) In Case You Missed It Fed Vice Chair Lael Brainard reiterated the bank’s hawkish stance during a speech in Chicago on Thursday. Brainard said, “Even with the recent moderation, inflation remains high, and policy will need to be sufficiently restrictive for some time to make sure inflation returns to 2% on a sustained basis.” Her comments echo other recent speeches from Fed officials insisting they will stick to plans to maintain high rates through early 2024. The comments have prompted fears on Wall Street that the bank will overtighten and send the U.S. economy into a deep recession. The Treasury Department began taking “extraordinary measures” as the U.S. hit its $31.4 trillion debt limit. Treasury Secretary Janet Yellen said the department should be able to pay the U.S. government’s bills through June. She is pushing Congress to raise the debt ceiling “without concession”. But many House Republicans have suggested they will push for spending cuts as part of the debt ceiling bill. Want to hear insight from pro traders about this market? Register for my upcoming virtual live event: Conversations With A Pro Trader!
Continue Reading -->Coffee With Greta: New Year Rally Fizzles
DJIA Futures: -268 (-0.8%) SPX Futures: -32 (-0.8%) NASDAQ Futures: -101 (-0.9%) Good morning friends! Futures are falling as the January rally fizzles out amid fears the Fed will over-tighten. Let’s get right to it! December Housing Starts & Building Permits New home construction fell less than expected at the end of 2022. The Census Bureau reported housing starts slumped 1.4% to a seasonally adjusted annual rate of 1.382 million units from a revised 1.401 million in November. That was better than expectations for a drop to 1.359 million units. But it was still the fourth straight month of declining building activity. Single-family starts surged 11.3% monthly but were still down 25% year over year while multi-family starts tumbled 18.9% monthly and were 16.3% lower compared to a year ago. The slowdown in building is expected to continue as permits fell in December. The number of new permits authorized dropped 1.6% last month to a seasonally adjusted annual rate of 1.33 million units from a revised 1.351 million in November. Permits were expected to rise to 1.37 million. Single-family permits fell 6.5% monthly and 34.7% year over year while multi-family permits rose 7.1% monthly but were down 21.8% from a year ago. Weekly Jobless Claims Fall Unexpectedly Weekly jobless claims fell unexpectedly last week to a four-month low. The Labor Department reported 190,000 Americans filed initial claims for unemployment benefits. That was down by 15,000 from the week before and lower than expectations for an increase to 215,000. It was the lowest total since September. Procter & Gamble Profits Fall Procter & Gamble (PG) shares are falling 3.0% ahead of the open despite reporting fiscal Q2 results that were in line with expectations. Here’s how the consumer goods giant’s results compared to analysts’ estimates: Adjusted EPS: $1.59, as expected Revenue: $20.77 billion vs $20.73 billion expected Profits fell by $320 million year over year while revenue was down 1%. All of Procter & Gamble’s divisions reported lower sales volumes in the quarter as consumer demand falls. The company is still planning to hike prices further in the months ahead to make up for that lower sales volume. The CFO said consumers have reacted to higher prices “generally better than expected” and “consumers don’t stop washing their hands or doing their laundry.” P&G expects 2023 sales growth between 4% and 5%, up from 3% to 5% previously. Bed Bath & Beyond Reportedly Looking For Buyer Bed Bath & Beyond (BBBY) shares are up 1.0% in premarket trade amid reports the retailer has been in discussions with potential buyers and lenders ahead of a likely bankruptcy filing. Sources say the company is hoping to find a buyer that would keep both its major chains, Bed Bath & Beyond and Buybuy Baby, open. Bed Bath has also reportedly been looking for a lender to provide capital to keep it afloat through a bankruptcy filing. A company spokeswoman said Wednesday, “Multiple paths are being explored and we are determining our next steps thoroughly, and in a timely manner,” but declined to comment further. Key Earnings After The Close Here are the major companies set to report earnings after the close today: Netflix (NFLX) In Case You Missed It Homebuilder sentiment rose unexpectedly this month. The National Association of Homebuilders’ sentiment index improved to 35 from 31 in December. That broke a 12-month losing streak and was better than expectations for a decline to 30. The gain comes as mortgage rates have fallen at the start of the year and as the typically busy spring homebuying season approaches.
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