Category Archives for Coffee With Greta
Coffee With Greta: Retail Sales Beat, Target Flops
DJIA Futures: -29 (-0.1%) SPX Futures: -6 (-0.1%) NASDAQ Futures: -21 (-0.2%) Good morning friends! Futures are lower as traders digest strong retail sales data against Target’s big earnings miss. Let’s get right to it! October Retail Sales Jump Retail sales rose more than expected in October as the U.S. consumer continues to pay higher prices. The Commerce Department reported retail sales rose 1.3% to $694.5 billion. That was better than economists’ expectations for a 1.2% gain. Retail sales jumped 8.3% year over year. Gasoline stations saw the largest increase with sales up 4.1% as prices rose, grocery store sales jumped 1.4%, and vehicles sales were up 1.5%. Core retail sales, excluding vehicles and gas stations, rose 0.9%. Target Tumbles As Profits Drop Target (TGT) shares are tumbling 15.1% ahead of the open after missing Q3 expectations and warning of a weak holiday quarter. Here’s how the retailer’s results compared to analysts’ expectations: EPS: $1.54 vs $2.13 expected Revenue: $26.52 billion vs $26.38 billion expected Profit was down about 50% year over year as the company cleared excess inventory. Inventory was up 14% compared to Q3 2021 vs 36% in Q2 and 43% in Q1. Target said it plans to cut up to $3 billion in total costs over the next three years. The company said it is planning for a weaker Q4, forecasting a low single-digit decline in comparable sales and operating margins around 3%. Lowe’s Beats Q3 Expectations Lowe’s (LOW) shares are up 1.5% in premarket trade after beating Q3 estimates. Here’s how the home improvement retailer’s results compared to analysts’ expectations: EPS: $3.27 vs $3.10 expected Revenue: $23.48 billion vs $23.13 billion expected Lowe’s reported 19% growth in its professional segment while online sales rose 12%. But the company did update its full-year guidance, lowering the top end of its revenue forecast to between $97 billion and $98 billion vs $99 billion previously. Lowe’s also expects comparable sales to be flat or down 1% vs the prior outlook for down 1% to up 1%. Homebuilder Sentiment Expected to Slide Further The National Association of Homebuilders releases its November sentiment index at 10:00 a.m. ET today. That index is expected to have fallen 2 points this month to 36. That extends a steep decline seen in recent months as mortgage rates have surged. Homebuilders have cited higher rates and continued labor and supply chain shortages for their decreased confidence.
Continue Reading -->Coffee With Greta: Inflation Party 2.0
DJIA Futures: +348 (+1%) SPX Futures: +73 (+1.8%) NASDAQ Futures: +331 (+2.8%) Good morning friends! Futures are rallying after another inflation report shows price pressures are cooling. Let’s get right to it! Wholesale Inflation Cools More Than Expected Wholesale inflation pressures cooled more than expected in October. The Bureau of Labor Statistics’ producer price index rose 0.2% monthly vs 0.4% expected. The PPI rose 8% annually vs expectations for an 8.4% increase. The Core PPI – which excludes food, energy, and trade services – rose 0.2% monthly and 5.4% year over year. PPI is considered a leading indicator for CPI as prices are passed down to consumers. This data is another sign the Fed’s rate hikes are working to cool inflation. CME Group’s FedWatch Tool shows 83% of traders expecting the bank to approve a 50bps rate hike in December. Walmart Beats Fiscal Q3 Estimates, Hikes Outlook Walmart (WMT) shares are up 7.7% ahead of the open after beating fiscal Q3 expectations and raising its outlook. Here’s how the retailer’s results compared to analysts’ expectations: Adjusted EPS: $1.50 vs $1.32 expected Revenue: $152.81 billion vs $147.75 billion expected Walmart’s CFO said consumers have shifted their spending to less-expensive options as “pocketbooks are stretched”. The company also made progress on clearing excess inventory during the quarter. Walmart’s inventory was up 13% year over year last quarter, down from 25% in Q2 and 32% in Q1. Comparable sales rose 8.2% year over year vs 3.6% expected while Sam’s Club comparable sales jumped 10% vs 8.7% expected. The company expects that growth to slow to 3% in Q4 vs analysts’ expectations for 3.5%. Walmart also forecast adjusted EPS will drop by 3% to 5% in Q4 due to the impact of currency fluctuations. Home Depot Slips Despite Earnings Beat Home Depot (HD) shares are slipping 0.8% in premarket trade despite topping Q3 expectations. Here’s how the home improvement retailer’s results compared to analysts’ expectations: EPS: $4.24 vs $4.12 expected Revenue: $38.87 billion vs $37.96 billion expected Revenue was up 6% year over year. Home Depot reiterated its full-year guidance, expecting EPS growth in the mid-single digits next quarter. The company said customer transactions fell about 4% but average ticket prices rose 9% as shoppers paid higher prices. Empire State Manufacturing Index Turns Positive The New York Fed’s factory gauge jumped more than expected this month. The Empire State Manufacturing Index rose 13.6 points to 4.5, the first positive reading since July. That beat economists’ expectations for a reading of -6. That jump came as the shipments index rose 8.3 points to 8. Unfilled orders also slipped 3.1% to -6.8, in a sign that metric is improving. Labor market conditions rose solidly and the price indices were flat. But manufacturers were more pessimistic about the next 6 months with the future business conditions index falling 4 points to -6.1. This index is considered a barometer for the broader U.S. manufacturing sector. Lucid Unveils Lower-Cost Car Lucid (LCID) shares are up 3.7% ahead of the open after the electric automaker unveiled new Air sedan models, including a new lower-cost option. The CEO told CNBC the new Lucid Air Pure will start at $87,400. An all-wheel-drive version with a 410-mile range is expected to ship by the end of this year with the rear-wheel-drive version arriving in 2023. Lucid also unveiled a new Air Touring model with all-wheel-drive, 620 horsepower, and a 425 mile range. That model will start at $107,400 with deliveries beginning shortly.
Continue Reading -->Coffee With Greta: Stocks Slip While Yields Pop
DJIA Futures: -31 (-0.1%) SPX Futures: -10 (-0.2%) NASDAQ Futures: -59 (-0.5%) Good morning friends! Futures are slipping as traders gear up for a busy week of earnings and economic data. Let’s get right to it! Yields Pop Higher Treasury yields are rising again today after the bond market was closed on Friday. The 2-year yield is up 9 basis points to 4.41% while the 10-year yield is up 4 basis points to 3.88%. Traders are looking ahead to the release of the New York Fed’s Survey of Consumer Expectations at 11:00 a.m. ET today. That survey includes consumers’ 1-year and 5-year expectations for inflation. Busy Week of Data Traders will get more insight into the inflation picture this week as well as some other key data on the housing market. The Bureau of Labor Statistics releases its October producer price index Tuesday morning while the New York Fed releases its November manufacturing index at the same time. Then the Commerce Department reports October retail sales Wednesday morning. The National Association of Homebuilders November sentiment index comes out later on Wednesday. The Census Bureau then reports October housing starts and building permits Thursday morning. And finally the National Association of Realtors reports October existing home sales on Friday. Key Retail Earnings Ahead The biggest retailers in the U.S. report Q3 earnings this week. Walmart (WMT) and Home Depot (HD) report ahead of the open on Tuesday. Then Target (TGT) and Lowe’s (LOW) report Wednesday morning. Macy’s (M) and Kohl’s (KSS) report Thursday morning with Gap (GPS) after the close. And then Foot Locker (FL) on Friday morning. Retail earnings have been key to gauge the impact of inflation on consumer activity. The market will be focused on future guidance from these retailers. Oil Prices Drop Amid China’s Covid Surge Oil prices are falling today on demand concerns as Covid cases surge in China. West Texas Intermediate crude futures are down 1.2% to under $88 bbl while Brent crude futures are down 1% to just under $95 bbl. Beijing and other big cities across China reported record new Covid infections today after easing restrictions last week. Tyson Tops Q4 Sales Expectations Tyson Foods (TSN) shares are up 1.7% ahead of the open after reporting stronger than expected Q4 sales. Here’s how the meat processor’s results compared to analysts’ expectations: Adjusted EPS: $1.63 vs $1.70 expected Revenue: $13.7 billion vs $13.5 billion expected The CEO said, “We delivered record sales and earnings for the full year, which was supported by our diverse portfolio and continued strength in consumer demand for protein.” Average prices rose 5.1% overall with chicken prices jumping 18.2% while beef prices fell 8.2%.
Continue Reading -->Coffee With Greta: Extending The CPI Rally
DJIA Futures: +160 (+0.5%) SPX Futures: +21 (+0.5%) NASDAQ Futures: +69 (+0.6%) Good morning friends! Futures are higher, extending the market’s big post-CPI rally. Let’s get right to it! Biggest One-Day Rally Since 2020 Stocks are rising again today after the major indexes skyrocketed on Thursday following the cooler-than-expected CPI. The Dow Jones jumped more than 1,200 points or 3.7% on Thursday. While the S&P 500 surged 5.5% and the Nasdaq skyrocketed 7.4%. It was the largest one-day gain for all three since 2020. ARKK’s Best Day Ever ARK Innovation ETF (ARKK) shares are slipping 0.2% ahead of the open after logging its best day ever on Thursday. The fund surged 14.5% as tech stocks rallied. Its biggest holding Zoom Video (ZM) jumped 14.5%, while Tesla (TSLA) rallied 7.4%, and Roku (ROKU) surged 15.4%. Trading volume also surged with more than 48 million ARKK shares being traded on Thursday vs the 30-day average of about 25 million. The fund is still down 61% YTD. Bond Market Closed The bond market is closed today in observance of Veterans Day. The closure comes after Treasury yields plunged on Thursday. The 2-year yield ended the session down 33 basis points at 4.32% while the 10-year yield dropped 32 basis points to 3.82%. Investors poured back into bonds after the CPI showed inflation pressures may have peaked. That hope also caused traders to lower their expectations for the next Fed meeting. CME Group’s FedWatch Tool shows 85.4% now anticipating a smaller 50bps hike at the December 14 meeting. Mortgage Rates Tumble Below 7% Mortgage rates fell sharply alongside the 10-year Treasury yield Thursday. Mortgage News Daily shows the average 30-year fixed rate plunged 60 basis points and settled at 6.62%. That was the largest one-day drop since the start of the pandemic. Oil Prices Jump As China Eases Covid Restrictions Oil prices are rising today after Chinese authorities eased some Covid restrictions in the country. West Texas Intermediate crude futures are up 3.2% to over $89 bbl while Brent crude futures are up 2.9% to over $96 bbl. The changes include shorter quarantined times for international travelers and those who’ve been in contact with an infected individual. China also narrowed its contact tracing to just close contacts of Covid infections.
Continue Reading -->Coffee With Greta: Inflation Party on Wall Street
DJIA Futures: +832 (+2.6%) SPX Futures: +119 (+3.2%) NASDAQ Futures: +438 (+4.1%) Good morning friends! Futures are surging after the October CPI came in lighter than expected. Let’s get right to it! Inflation Cools More Than Expected U.S. inflation pressures cooled more than expected in October, in a sign the Fed’s rate hikes are starting to impact prices. The Bureau of Labor Statistics consumer price index rose 0.4% monthly last month and 7.7% year over year. That was cooler than economists’ expectations for a 0.6% monthly gain and 7.9% annual jump. That cooldown came despite higher food, gas, and rent prices. Grocery prices rose 0.4% monthly, 12.4% annually. Gas prices were up 4% monthly, 17.5% annually. And rent prices rose 0.8% monthly, 6.9% annually. Utility gas prices tumbled 4.6%, used car prices fell 2.4%, and apparel prices were down 0.7%. The core CPI, which excludes food and energy prices, was also cooler than expected. That index rose 0.3% monthly and 6.3% annually vs 0.5% monthly, 6.5% annually expected. Binance Backs Out of FTX Deal The second-largest crypto exchange in the world is now on the brink of collapse after Binance ditched its plans to acquire FTX. The company reversed course on Wednesday after announcing a nonbinding deal on Tuesday to buy FTX amid a “significant liquidity crunch” at the exchange. In a tweet, Binance said, “In the beginning, our hope was to be able to support FTX’s customers to provide liquidity. But the issues are beyond our control or ability to help. FTX CEO Sam Bankman-Fried has reportedly told investor the company is facing a shortfall of up to $8 billion from withdrawal requests. Rivian Tops Q3 Expectations Rivian (RIVN) shares are rallying 14.8% ahead of the open after reporting a smaller Q3 loss than expected. Here’s how the electric truck maker’s results compared to analysts’ estimates: Adjusted loss per share: $1.57 vs $1.82 expected Revenue: $536 million vs $551.6 million expected Rivian reaffirmed its full-year production target for 25,000 vehicles. But the company said it plans to reduce spending, now expecting full-year capital expenditures to total $1.75 billion vs $2 billion guidance after Q2. Rivian said it has over 114,000 preorders for its R1-series trucks and SUVs, up from 98,000 in August. Unity Software Shakes Off Revenue Miss Unity Software (U) shares are up 10.9% in premarket trade despite reporting less revenue than expected in Q3. Here’s how the software company’s results compared to analysts’ expectations: Adjusted loss per share: $0.14 vs $0.15 expected Revenue: $322.9 million vs $326.1 million expected Unity forecast Q4 revenue between $425 million and $445 million. The company also hiked its full-year outlook, now expecting revenue between $1.37 billion and $1.39 billion vs $1.3 billion to $1.35 billion previously. Beyond Meat Jumps Despite Q3 Miss Beyond Meat (BYND) shares are up 6.6% ahead of the open despite missing Q3 expectations on the top and bottom line. Here’s how the meat substitute company’s results compared to analysts’ estimates: Loss per share: $1.60 vs $1.14 expected Revenue: $82.5 million vs $98.1 million expected Revenue tumbled 22.5% compared to Q3 2021. The miss prompted Beyond Meat to cut its guidance for the second straight quarter. The company now expects full-year revenue between $400 million and $425 million vs $470 million to $520 million previously.
Continue Reading -->Coffee With Greta: Election Question Weighs on Stocks
DJIA Futures: -124 (-0.4%) SPX Futures: -13 (-0.3%) NASDAQ Futures: -46 (-0.4%) Good morning friends! Futures are falling as it remains unclear which party will control Congress after Tuesday’s midterm elections. Let’s get right to it! Disney Slumps On Profit Miss Walt Disney (DIS) shares are dropping 8.1% ahead of the open after missing fiscal Q4 profit expectations. Here’s how the company’s results compared to analysts’ estimates: Adjusted EPS: $0.30 vs $0.55 expected Revenue: $20.15 billion vs $21.24 billion expected The company saw revenue growth of 22% in fiscal 2022 and forecast growth of less than 10% in fiscal 2023. Revenue in Disney’s key media and entertainment division fell 3% year over year to $12.7 billion in fiscal Q4, missing expectations for $13.9 billion. Its streaming platform Disney+ grew more than expected, adding 12.1 million subscribers during the quarter. That put total subscribers at 164.2 million vs 160.45 million expected. But Disney warned that growth is expected to slow in fiscal Q1. Disney reported record revenue of $7.4 billion in its parks, experiences, and products segment. That was up 34% year over year but shy of analysts’ expectations for $7.5 billion. AMC Losses Widen AMC Entertainment (AMC) shares are falling 3.7% in premarket trade after reporting losses in Q3. Here’s how the theater chain’s results compared to analysts’ expectations: Adjusted loss per share: $0.20 vs $0.23 expected Revenue: $968.4 million vs $961 million Although those results were better than expected, it was the 12th consecutive quarterly loss for the company. AMC reported an adjusted EBITDA loss of $12.9 million vs $5.4 million a year ago. CEO Adam Aron said, “Our third-quarter results were impacted by a particularly soft industry-wide box office in the latter two-thirds of the 2022 third quarter.” The losses come as AMC’s spending on food and beverages jumped 30% compared to Q3 2019. Roblox Sinks On Big Q3 Loss Roblox (RBLX) shares are tumbling 15.5% ahead of the open after reporting a wider Q3 loss than analysts anticipated. Here’s how the company’s results compared to analysts’ expectations: Loss per share: $0.50 vs $0.35 expected Revenue/Bookings: $702 million vs $686 million expected Bookings were up 10% year over year with average daily active users rising 24% to 58.8 million. But average bookings per daily active user fell 11% to $11.94. Lucid Reservations Drop Lucid Group (LCID) shares are falling 7.8% in premarket trade after missing Q3 expectations. Here’s how the electric automaker’s results compared to analysts’ estimates: Loss per share: $0.40 vs $0.31 expected Revenue: $195.5 million vs $209 million expected Revenue was down from $232 million in Q3 2021. Lucid said it has more than 34,000 reservations for its Lucid Air EV, down from the 37,000 it reported after Q2. The company said it is on track to meet its 2022 production target of 6,000 to 7,000 vehicles. Lucid also announced it will open reservations for its second vehicle, an SUV, in early 2023. Meta Announces Mass Layoffs Meta Platforms (META) shares are up 4.5% after the company announced mass layoffs this morning. In a letter to employees, CEO Mark Zuckerberg said, “I’ve decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go.” Zuckerberg also said Meta is cutting discretionary spending and extending its hiring freeze through Q1 2023. He said the recruiting department will see the largest impact from those moves. Key Earnings After The Close Here are the companies scheduled to report Q3 earnings after the close today: Rivian (RIVN) Unity Software (U)
Continue Reading -->Coffee With Greta: Election Day
DJIA Futures: +107 (+0.3%) SPX Futures: +14 (+0.4%) NASDAQ Futures: +75 (+0.7%) Good morning friends! Futures are rising as the market gears up for today’s midterm election results and traders digest the latest batch of Q3 earnings. Let’s get right to it! Kohl’s CEO to Step Down Kohl’s (KSS) shares are up 7.6% in premarket trade after announcing its CEO will step down. Michelle Gass will leave the company on December 2 to pursue a new opportunity. Levi Strauss (LEVI) separately announced she will serve as president of that company. Kohl’s director Tom Kingsbury will serve as interim CEO. The company has been under pressure from activist investors to remove Gass after terminating takeover talks over the summer. Lyft Sinks On Slowing Growth Lyft (LYFT) shares are plunging 17.8% ahead of the open despite beating Q3 expectations as the report showed growth is slowing. Here’s how the ride share company’s results compared to analysts’ expectations: Adjusted EPS: $0.10 vs $0.07 expected Revenue: $1.054 billion vs $1.056 billion expected Adjusted EBITDA: $66 million vs $62 million expected Lyft had 20.3 million active riders in the quarter, up 2% from Q2 and 7% year over year. That missed analysts’ expectations for 21.3 million. Revenue per active ride rose to a record $51.88, up 14% annually and 4% quarterly. Lyft forecast Q4 revenue between $1.145 billion and $1.165 billion with adjusted EBITDA between $80 million and $100 million. Analysts were estimating revenue of $1.159 billion and adjusted EBITDA of $85 million. TripAdvisor Plummets After Earnings Miss TripAdvisor (TRIP) shares are plummeting 22.4% in premarket trade after missing Q3 expectations. Here’s how the company’s results compared to analysts’ estimates: Adjusted EPS: $0.28 vs $0.39 expected Revenue: $459 million vs $444.3 million TripAdvisor said foreign currency fluctuations impacted revenue by $34 million in Q3. Despite the miss, in its letter to shareholders the company said, “Our results reflect a sustained demand for travel and dining, and another quarter of steady progress to full recovery.” Take-Two Interactive Tanks After Cutting Outlook Take-Two Interactive (TTWO) shares are plunging 17.3% ahead of the open after cutting its full-year outlook. Here’s how the video game company’s fiscal Q2 results compared to analysts’ expectations: GAAP net loss: $1.54 per share Net bookings: $1.5 billion, in line with expectations Bookings were up 53% year over year but Take-Two cut its forecast for full-year bookings. The company now expects fiscal 2023 net bookings to be between $5.4 billion and $5.5 billion. That’s down from $5.8 billion to $5.9 billion previously. Lordstown Rallies On New Foxconn Investment Lordstown Motors (RIDE) shares are rallying 17.3% in premarket trade after announcing a new investment from Taiwanese contract manufacturer Foxconn. The electric truck maker said it still plans to deliver the first models of its Endurance pickup truck before year-end. The company said Foxconn will invest an additional $170 million in Lordstown over three phases. The first $52.7 million is due later this month. Following that investment, Foxconn will own about 18% of Lordstown and be the company’s largest shareholder. Foxconn bought Lordstown’s Ohio factory for $230 million in May, where the company is building its Endurance pickup. Lordstown said it will use part of that investment from Foxconn to develop a new vehicle. The company said it is actively seeking an automaker partner to help it scale up production of the Endurance. Lordstown now expects to build only 30 of the trucks by year-end, down from its previous target for 50. Key Earnings After The Close Here are the companies scheduled to report Q3 earnings after the close today: Walt Disney (DIS) AMC Entertainment (AMC) Lucid Group (LCID) Lordstown Motors (RIDE)
Continue Reading -->Coffee With Greta: New Week Kicks Off Higher
DJIA Futures: +68 (+0.2%) SPX Futures: +7 (+0.2%) NASDAQ Futures: +26 (+0.2%) Good morning friends! Futures are higher as traders kick off a new week. Let’s get right to it! Apple Drops After iPhone 14 Production Warning Apple (AAPL) shares are down 1.3% ahead of the open after the tech giant said Sunday it has temporarily reduced iPhone 14 production. That production cut comes amid Covid-19 restrictions at its main Foxconn plant in China. Apple said the factory is operating at “significantly reduced capacity”. The company said it will ship fewer iPhone 14 units and customers will experience longer wait times. Meta Reportedly Set for Massive Layoffs Meta (META) shares are up 3% in premarket trade following a Wall Street Journal report the company is set to begin large-scale layoffs. Those layoffs are reportedly set to begin as soon as Wednesday and are expected to impact thousands of employees. CEO Mark Zuckerberg hinted toward planned layoffs on Meta’s earnings call last month. He said, “we expect to end 2023 as either roughly the same size, or even a slightly smaller organization than we are today.” BioNTech Profit Slides BioNTech (BNTX) shares are down 2.7% ahead of the open despite beating Q3 expectations as profits and sales tumbled year over year. Here’s how the German pharmaceutical company’s results compared to analysts’ expectations: EPS: €6.98 vs €3.42 expected Revenue: €3.461 billion vs €2.065 billion expected Both profit and revenue dropped more than 40% compared to a year ago as Covid vaccine sales slowed. But BioNTech did raise its full-year Covid vaccine sales forecast to between €16 billion and €17 billion from €13 billion to €17 billion previously. Inflation Week Traders are focused on inflation this week with the October consumer price index set to be released Thursday morning. That report is expected to show both headline and core inflation pressures slowed last month. The headline CPI is expected to show a 7.9% annual gain while the core CPI is expected to rise 6.5% year over year. Although both would be a slight slowdown from September, that’s still near a 40-year high. Following last week’s rate hike the Fed Chair said it is “premature” to start thinking about a pause in rate hikes as inflation remains far above the bank’s 2% target.
Continue Reading -->Coffee With Greta: Hot Jobs Report Vindicates Powell
DJIA Futures: +206 (+0.7%) SPX Futures: +33 (+0.9%) NASDAQ Futures: +107 (+1%) Good morning friends! Futures are higher as a hot October jobs report supports the Fed’s continued hawkish stance. Let’s get right to it! Hot Jobs Report Job growth surged higher in October as hiring remains strong. The Labor Department reported the U.S. economy added 261,000 jobs last month vs 205,000 expected. But the unemployment rate unexpectedly increased to 3.7% from 3.5%. Economists were expecting that rate to be unchanged. The rising unemployment rate alongside strong hiring indicates more people have resumed actively looking for work. Average hourly earnings were up 4.7% year over year and 0.4% on a monthly basis. The labor force participation rate ticked lower to 62.2%, still down sharply from 63.4% pre-pandemic. September’s job growth was also revised higher by 52,000 to +315,000 while August was revised lower by 23,000 to +292,000. PayPal Drops On Q4 Outlook PayPal (PYPL) shares are down 5.8% ahead of the open despite beating Q3 expectations as the market focused on its forecast. Here’s how the company’s results compared to analysts’ expectations: Adjusted EPS: $1.08 vs $0.96 expected Revenue: $6.85 billion vs $6.82 billion expected PayPal expects $7.83 billion in Q4 revenue, less than estimates for $7.74 billion. But the company did hike its full-year EPS guidance as it expects to add between 8 and 10 million net new active users this fiscal year. Block Rallies On Earnings Beat Block (SQ) shares are rallying 11.3% in premarket trade after beating Q3 expectations. Here’s how the payments company’s results compared to analysts’ estimates: Adjusted EPS: $0.42 vs $0.23 expected Revenue: $4.52 billion vs $4.49 billion expected Gross profit jumped 38% year over year to $1.57 billion vs $1.53 billion expected. Gross profit at Block’s Cash App business surged 51% annually to $774 million. The company also said over 18 million people were actively using its Cash debit card in September, up 40% compared to a year ago. Its point-of-sale business, Square, brought in gross profit of $783 million, up 29% year over year. Coinbase User Numbers Beat Coinbase (COIN) shares are up 5.7% ahead of the open after topping Q3 user expectations. Here’s how the crypto platform’s results compared to analysts’ expectations: Adjusted loss per share: $2.43 vs $2.40 expected Revenue: $590 million vs $654 million expected Revenue plummeted more than 50% year over year as traders ditched crypto. In its investor letter the company said, “Transaction revenue was significantly impacted by stronger macroeconomic and crypto market headwinds, as well as trading volume moving offshore.” Coinbase said it had 8.5 million monthly transacting users in Q3. That topped analysts’ expectations for 7.84 million but was down from 9 million in Q2 and 9.2 million in Q1. The company expects its monthly user numbers to be “slightly below” 9 million for the full year Starbucks Rallies On Earnings Beat Starbucks (SBUX) shares are up 6% in premarket trade after beating fiscal Q4 expectations. Here’s how the coffee chain’s results compared to analysts’ expectations: Adjusted EPS: $0.81 vs $0.72 expected Revenue: $8.41 billion vs $8.31 billion expected Global same-store sales jumped 7% as U.S. sales surged. Same-store sales in the U.S. jumped 11% as customers paid higher prices. Prices were up 6% year over year but Starbucks said it does not plan to increase prices anymore for the time being. Active membership in the company’s loyalty program jumped 16% to 28.7 million people. Starbucks forecast fiscal 2023 revenue growth of 10% to 12% and global same-store sales growth on the high end of its previous range of 7% to 9%. Carvana Plunges On Big Q3 Loss Carvana (CVNA) shares are plunging 11.8% ahead of the open after reporting a steep loss in Q3. Here’s how the car reseller’s results compared to analysts’ expectations: Loss per share: $2.67 vs $1.94 expected Revenue: $3.39 billion vs $3.71 billion expected Gross profit dropped 31% year over year while retail units sold fell 8%. Gross profit per unit also tumbled by more than $1,100 to $3,500 as used car prices have cooled compared to a year ago.
Continue Reading -->Coffee With Greta: Fed Hangover Weighs on Stocks
DJIA Futures: -238 (-0.7%) SPX Futures: -38 (-1%) NASDAQ Futures: -141 (-1.3%) Good morning friends! Futures are falling after the Fed seemed to strike down market expectations for a pivot in the near future. Let’s get right to it! Fed Dashes Hopes for a Pivot The Federal Open Market Committee approved its fourth consecutive 75bps rate hike on Wednesday. That puts the Federal Funds Rate in a range of 3.75% to 4%, the highest level since January 2008. The FOMC statement also seemed to hint at the bank slowing the pace of its tightening. The Fed said it “will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments” when determining future rate hikes. But Chairman Jerome Powell maintained his hawkish tone in the post-meeting press conference, saying inflation is still well above target and the bank will “stay the course until the job is done”. Powell told reporters he doesn’t think they have overtightened and it is “very premature to think about pausing rate hikes”. CME Group’s FedWatch Tool shows 52% of traders expecting a 50bps rate hike at the December meeting with 48% anticipating another 75bps move. Bank of England Approves Large Rate Hike The Bank of England followed the Fed’s lead overnight, hiking its benchmark interest rate by 75 basis points. That’s the largest hike in 33 years and the eighth in a row. U.K. inflation spiked to 10.1% in September and is expected to rise to 11% in Q4. But the economy is also slowing. U.K. GDP is projected to decline 0.75% in the second half of 2022 and continue falling throughout 2023 and early 2024. Weekly Jobless Claims Dip Weekly jobless claims dipped in late October as the labor market maintains strength in the face of the Fed’s inflation fight. The Labor Department reported 217,000 Americans filed initial unemployment claims last week. That was down 1,000 from the week before and better than expectations for an increase to 220,000. Continuing claims rose by 50,000 to 1.49 million in the week ending October 22. Roku Plummets on Outlook Roku (ROKU) shares are plunging 21% ahead of the open despite beating Q3 expectations. Here’s how the streaming platform’s results compared to analysts’ expectations: Loss per share: $0.88 vs $1.29 expected Revenue: $761.4 million vs $696.1 million expected But Roku’s Q4 forecast came in weak, dragging the stock down. The company expects revenue of $800 million this quarter and an adjusted EBIDTA loss of $135 million. That would mark a decline of 8% year over year and missed analysts’ estimates of $899 million in revenue and an adjusted EBITDA loss of $48 million. The stock is on track to open at a new 52-week low. Qualcomm Issues Weak Guidance, Announces Hiring Freeze Qualcomm (QCOM) shares are falling 8.1% in premarket trade after reporting fiscal Q4 results that were in line with expectations and weak Q1 guidance. Here’s how the chipmaker’s results compared to analysts’ estimates: Adjusted EPS: $3.13, as expected Revenue: $11.39 billion vs $11.37 billion expected Revenue was up 22% year over year. Qualcomm forecast fiscal Q1 adjusted EPS of $2.25 to $2.45 on $9.2 billion to $10 billion in revenue. That was weaker than analysts’ estimates for adjusted EPS of $3.42 on $12.02 billion in revenue. The company also announced it implemented a hiring freeze at the start of the current quarter due to macroeconomic headwinds. Peloton Collapses on Weak Outlook Peloton (PTON) shares are plunging 15.4% ahead of the open after missing Q3 estimates and issuing weak guidance. Here’s how the exercise device maker’s results compared to analysts’ estimates: Loss per share: $1.20 vs $0.64 expected Revenue: $616.5 million vs $650.1 million expected Revenue fell 23% compared to a year ago. The company lost members during the quarter, reporting 6.7 million total members vs 6.9 million in Q2. But its free cash flow continued to improve to negative $246.3 million vs negative $411.9 million in Q2. Peloton forecast Q4 revenue between $700 million and $725 million. That would mark an increase from Q3 but was sharply lower than analysts’ estimates of $874 million. The company said, “Given macro economic uncertainties we believe near-term demand for Connected Fitness hardware is likely to remain challenged.” Moderna Tumbles After Q3 Miss Moderna (MRNA) shares are tumbling 8.3% in premarket trade after missing Q3 expectations and lowering its full-year guidance for Covid vaccine sales. Here’s how the pharmaceutical giant’s results compared to analysts’ expectations: Adjusted EPS: $2.53 vs $3.29 expected Revenue: $3.36 billion vs $3.53 billion expected Revenue was down 32% year over year while profits plunged 68%, due to lower Covid vaccine sales. Moderna now expects $18 billion to $19 billion in revenue from the vaccine this year, down from previous guidance for $21 billion. Key Earnings After the Close Here are the key companies scheduled to report Q3 results after the close today: Starbucks (SBUX) PayPal (PYPL) Block (SQ) DoorDash (DASH) Coinbase (COIN)
Continue Reading -->