Category Archives for Coffee With Greta
Coffee With Greta: Too Many Jobs for the Fed
DJIA Futures: -97 (-0.3%) SPX Futures: -8 (-0.2%) NASDAQ Futures: -11 (-0.1%) Good morning friends! Futures are slipping as traders digest new labor market data and look ahead to today’s Fed decision. Let’s get right to it! Private Job Growth Comes in Hot Private employers in the U.S. added more jobs than expected in October. Payroll firm ADP reported today the U.S. private sector added 239,000 jobs last month vs expectations for just 195,000. That was up from the downwardly revised 192,000 in September. The leisure and hospitality sector saw the strongest growth, adding 210,000 jobs. The report showed wages jumped 7.7% year over year in October This data comes a day after the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) came in hot. That survey showed the number of job openings jumped to 10.7 million in September from a revised 10.3 million in August. That was higher than economists’ expectations for a decline to 9.85 million and is bad news for the Fed as it works to cool the hot labor market. The official October jobs report on Friday is expected to show the U.S. economy added 205,000 jobs with the unemployment rate unchanged at 3.5%. Fed Decision Day Stocks are slipping ahead of the Fed’s latest interest rate hike. The Central Bank releases that decision at 2:00 p.m. ET. CME Group’s FedWatch Tool shows 92.2% of traders expecting another 75 basis point hike, which is in line with the Fed’s dot plot. But the market is more focused on what the bank says about the future. FedWatch shows 47.7% of traders expecting the Fed to pivot to a 50bps hike in December, with 48.7% anticipating another 75bps move. AMD Rallies Despite Q3 Miss Advanced Micro Devices (AMD) shares are up 5.4% ahead of the open despite missing Q3 expectations. Here’s how the chipmaker’s results compared to analysts’ estimates: Adjusted EPS: $0.67 vs $0.68 expected Revenue: $5.57 billion vs $5.62 billion expected Revenue was up 29% year over year but even weaker than AMD’s preliminary results from early October. The chipmaker forecast $23.5 billion in full-year revenue, down from $26.3 billion previously and lower than analysts’ expectations for $23.88 billion. Airbnb Slides On Guidance Airbnb (ABNB) shares are down 4.9% in premarket trade despite beating Q3 expectations on the top and bottom line. Here’s how the company’s results compared to analysts’ expectations: EPS: $1.79 vs $1.47 expected Revenue: $2.88 billion vs $2.85 billion expected Gross bookings: $15.6 billion vs $15.37 billion expected Airbnb’s adjusted EBITDA hit a record high $1.5 billion in the quarter. But the company forecast lower revenue in Q4, “consistent with historical seasonality”. Airbnb expects revenue between $1.8 billion and $1.88 billion next quarter, in line with estimates of $1.87 billion. CVS Hikes Outlook CVS (CVS) shares are up 1.4% ahead of the open after beating Q3 estimates and hiking its outlook. Here’s how the pharmacy giant’s results compared to analysts’ estimates: EPS: $2.09 vs $1.99 expected Revenue: $81.16 billion vs $76.75 billion expected Revenue was up 10% year over year and that marked the 3rd straight quarter CVS has beat profit expectations. The company raised its full-year outlook following the beat. CVS now expects adjusted EPS between $8.55 and $8.65, up from $8.40 to $8.60 previously. Mortgage Demand Slides Further U.S. mortgage demand fell last week despite rates dropping for the first time in 2 months. The Mortgage Bankers Association reported overall application volume slipped 0.5%. Purchase applications fell 1% weekly and were down 41% year over year. Refinance applications rose 0.2% weekly but were down 85% compared to a year ago. The average 30-year contract rate decreased to 7.06% from 7.16% the previous week. That’s the first decline in 2 months but still hovering near a 22-year high.
Continue Reading -->Coffee With Greta: New Month, Same Rally?
DJIA Futures: +225 (+0.7%) SPX Futures: +42 (+1.1%) NASDAQ Futures: +158 (+1.4%) Good morning friends! Futures are rising as a new month of trade kicks off on Wall Street and this week’s Fed meeting is set to begin. Let’s get right to it! Can The October Rally Extend? October was the best month for the Dow Jones since January 1976. The blue chip index rallied 14% last month, the S&P 500 jumped 8%, and the Nasdaq rose 3.9%. The new month begins with all eyes on the Fed as the Central Bank kicks off its two-day policy meeting today. CME Group’s FedWatch tool shows 89.8% of traders expecting another 75 basis point hike on Wednesday. Pfizer Tops Q3 Expectations, Hikes Guidance Pfizer (PFE) shares are up 3.9% in premarket trade after beating Q3 expectations and hiking its guidance. Here’s how the pharmaceutical giant’s results compared to analysts’ expectations: Adjusted EPS: $1.78 vs $1.39 expected Revenue: $22.6 billion vs $21 billion expected Covid vaccine sales fell sharply in the quarter to $4.4 billion globally, down 66% from Q3 2021. But the weaker global demand was offset by strong demand in the U.S. where sales jumped 83% year over year due to the rollout of new omicron specific boosters. Pfizer’s antiviral pill Paxlovid also generated $7.5 billion in global sales last quarter. The company now expects EPS of $6.40 to $6.50 in 2022, up from the previous forecast of $6.30 to $6.45. Pfizer raised its full-year guidance for Covid vaccine sales to $34 billion, up $2 billion from the previous forecast. It maintained revenue expectations of $22 billion for Paxlovid. Uber Rallies On Revenue Beat Uber (UBER) shares are rallying 11.7% ahead of the open after beating Q3 revenue expectations. Here’s a look at the ride share giant’s results: Loss per share: $0.61 Revenue $8.34 billion vs $8.12 billion expected Revenue jumped 72% year over year. Uber’s adjusted EBITDA came in at a record $516 million, beating prior guidance for $440 million to $470 million and topping analysts’ estimates for $457.7 million. Gross bookings jumped to $29.1 billion, up 26% compared to a year ago. Uber expects gross bookings to grow between 23% and 27% year over year in Q4 with adjusted EBITDA of $600 million to $630 million. Oil Prices Rise Oil prices are higher today as a weakening dollar offsets demand concerns in China. West Texas Intermediate crude futures are up 2.3% to $88.50 bbl while Brent crude futures are up 2.1% to $94.75 bbl. Both contracts posted their first monthly gains since May in October. September JOLTS On Deck The first piece of this week’s labor market data will be out today. The Labor Department releases its September Job Openings and Labor Turnover Survey (JOLTS) at 10:00 a.m. ET. That survey is expected to show the number of job openings fell to 9.8 million from 10.1 million. Key Earnings After the Close This is the busiest week of Q3 earnings season so far. Here are the companies scheduled to report after the close today: Advanced Micro Devices (AMD) Airbnb (ABNB)
Continue Reading -->Coffee With Greta: Yields Spike, Stocks Fall As Fed Week Begins
DJIA Futures: -177 (-0.5%) SPX Futures: -23 (-0.6%) NASDAQ Futures: -81 (-0.7%) Good morning friends! Futures are falling as Treasury yields spike at the start of Fed week. Let’s get right to it! Treasury Yields Climb Ahead of the Fed Treasury yields are rallying with stocks falling ahead of this week’s Fed meeting. The 2-year yield is up 15 basis points at 4.49% while the 10-year yield is up 10 basis points at 4.05%. Traders widely expect the Fed to hike rates by another 75 basis points on Wednesday. But the market is also looking for some clarity on the bank’s future plans. Dow on Track for Best Month Since 1976 The Dow Jones is on track for its best month since 1976, up 14.4% so far in October. The S&P 500 and the Nasdaq are also up for the month. That puts Wall Street on track to snap its two-month losing streak. Today is the final day of October before key economic data comes out later this week. Jobs data begins on Tuesday with the release of the Labor Department’s Job Openings and Labor Turnover Survey. ADP reports private payroll numbers for October on Wednesday. The Fed decision is also on Wednesday. And then the official October jobs report on Friday. The central bank is looking for signs of slowing strength in the labor market amid its fight against inflation. Oil Prices Drop Oil prices are falling today after weaker-than-expected factory data in China and demand concerns due to the country’s COVID restrictions. West Texas Intermediate crude futures are down 1.9% to just over $86 bbl while Brent crude futures are down 1.3% to $94.50 bbl. But both contracts are still on track for their first monthly gains since May. A new survey shows factory activity in China fell unexpectedly in October. Earnings Heat Up We’ve gotten a mix of earnings so far this season but this will be the busiest week so far. Here are some highlights: Tuesday AM: Pfizer (PFE), Uber (UBER) Tuesday PM: Advanced Micro Devices (AMD), Airbnb (ABNB) Wednesday AM: CVS (CVS) Thursday AM: Regeneron (REGN), Moderna (MRNA), Marriott (MAR) Thursday PM: Starbucks (SBUX), PayPal (PYPL), Block (SQ), Coinbase (COIN)
Continue Reading -->Coffee With Greta: Inflation Is Still Hot
DJIA Futures: +69 (+0.2%) SPX Futures: -11 (-0.3%) NASDAQ Futures: -90 (-0.8%) Good morning friends! Futures are mixed as traders digest new inflation data and Amazon’s (AMZN) big Q3 miss puts more pressure on tech stocks. Let’s get right to it! PCE Inflation Is Still Hot U.S. inflation pressures were still running hot in September as the Fed’s rate hikes show no signs of slowing price gains. The Bureau of Economic Analysis’ personal consumption expenditures (PCE) price index rose 0.3% monthly and 5.1% year over year. But it’s not just high gas prices fueling those gains anymore. The core PCE price index – which excludes food and energy prices – rose 0.5% monthly and 5.1% annually. That was up from the 4.9% annual gain in August and that index is the Fed’s preferred measure of inflation. Musk Cleans House at Twitter Twitter (TWTR) shares are up 0.3% in premarket trade after Tesla (TSLA) CEO Elon Musk closed his purchase of the company. Musk reportedly took over at the social media giant Thursday night and quickly fired top executives. CEO Parag Agrawal, CFO Ned Segal, and head of legal policy Vijaya Gadde were all reportedly fired upon the deal closing. Musk named himself CEO after making those moves. He sent out a tweet after the deal closed, saying “the bird is freed”. Amazon Craters on Revenue Miss, Disappointing Guidance Amazon (AMZN) shares are plunging 13.8% ahead of the open after missing Q3 revenue expectations and issuing disappointing Q4 guidance. Here’s how the tech giant’s results compared to analysts’ expectations: EPS: $0.28 Revenue: $127.10 billion vs $127.46 billion expected Amazon Web Services Revenue: $20.5 billion vs $21.1 billion expected Ad Revenue: $9.55 billion vs $9.48 billion expected Amazon expects Q4 revenue between $140 billion and $148 billion vs $155.15 expected. That’s a disappointing outlook for the company’s key holiday shopping quarter. Apple Tops Fiscal Q4 Expectations, iPhone Sales Fall Short Apple (AAPL) shares are up 0.3% in premarket trade after narrowly beating fiscal Q4 expectations. Here’s how the iPhone maker’s results compared to analysts’ expectations: EPS: $1.29 vs. $1.27 expected Revenue: $90.15 billion vs. $88.90 billion expected iPhone revenue: $42.63 billion vs. $43.21 billion expected Mac revenue: $11.51 billion vs. $9.36 billion expected iPad revenue: $7.17 billion vs. $7.94 billion expected Other Products revenue: $9.65 billion vs. $9.17 billion expected Services revenue: $19.19 billion vs. $20.10 billion expected Gross margin: 42.3% vs. 42.1% expected Apple did not provide official guidance for fiscal Q1, which is the company’s biggest sales season of the year. But the CFO said the company expects slower annual revenue growth with Mac sales expected to decline year over year. Intel Beats Q3 Expectations Intel (INTC) shares are rallying 6.7% ahead of the open after beating Q3 expectations on the top and bottom line. Here’s how the chipmaker’s results compared to analysts’ estimates: Adjusted EPS: $0.59 vs $0.32 expected Revenue: $15.34 billion vs $15.25 billion expected Revenue declined 15% year over year, improving from the 22% decline in Q2. Intel trimmed its full-year forecast, now expecting adjusted EPS of $1.95 and $63 billion to $64 billion in revenue. That’s down from the prior forecast for $2.30 in adjusted EPS and $65 billion to $68 billion in revenue. Analysts were expecting guidance for $2.15 in adjusted EPS and $65.26 billion in sales. Intel’s CEO said, “We are planning for the economic uncertainty to persist into 2023.” Amid that uncertainty, the company said it’s aiming to reduce its cost of sales and operating expenses by $3 billion in 2023. Those annual savings are expected to reach $8 billion to $10 billion by the end of 2025. Pinterest Soars On Earnings Beat Pinterest (PINS) shares are jumping 9.1% in premarket trade after beating Q3 estimates. Here’s how the social media company’s results compared to analysts’ expectations: Adjusted EPS: $0.11 vs $0.06 expected Revenue: $684.6 million vs $666.7 million expected Revenue was up 8% year over year while monthly average users remained flat. Pinterest expects Q4 revenue growth in the mid-single digits as it continues to face foreign exchange headwinds. Exxon Mobil Reports Record Profits Exxon Mobil (XOM) shares are up 2.1% ahead of the open after reporting record profits in Q3. Here’s how the oil giant’s results compared to analysts’ expectations: EPS: $4.45 vs $3.86 expected Revenue: $112 billion vs $105 billion expected Exxon’s $18.7 billion profit was a new company record. It’s the second quarter in a row of record earnings which has caused criticism from Democrats as Americans pay high gas prices at the pump. Chevron Reports Near Record Profits Chevron (CVX) shares are up 2.1% in premarket trade after reporting its second-highest quarterly profit ever in Q3. Here’s how the oil company’s results compared to analysts’ estimates: Adjusted EPS: $5.56 vs $4.89 expected Revenue: $66.6 billion vs $57.4 billion expected Profits were up 90% year over year to $10.8 billion, down slightly from $11.4 billion in Q2. Chevron said higher oil and natural gas prices contributed to that surge.
Continue Reading -->Coffee With Greta: META’s Mega Miss
DJIA Futures: +274 (+0.9%) SPX Futures: +6 (+0.2%) NASDAQ Futures: -36 (-0.3%) Good morning friends! Futures are mixed as disappointing tech earnings weigh on the Nasdaq and a higher-than-expected GDP reading boosts the DJIA. Let’s get right to it! Meta Plummets After Earnings Miss Meta (META) shares are plummeting 22.9% ahead of the open after missing Q3 profit expectations and issuing weak guidance. Here’s how the social media giant’s results compared to analysts’ expectations: EPS: $1.64 vs $1.89 expected Revenue: $27.71 billion vs $27.38 billion expected Daily Active Users: 1.98 billion, in line with expectations Monthly Active Users: 2.96 billion vs 2.94 billion expected Average Revenue per User: $9.41 vs $9.83 expected Revenue dropped 4%, the second straight quarter of revenue declines as Meta struggles with a broad slowdown in online ad spending. Costs and expenses jumped 19% compared to a year ago. The company forecast Q4 revenue will be between $30 billion and $32.5 billion vs analysts’ expectations for $32.2 billion. Revenue in Meta’s virtual reality division, Reality Labs, fell to $285 million with its loss widening to $3.67 billion from $2.63 billion a year earlier. Ford Weighed Down by Supply Chain Issues Ford (F) shares are down 2% in premarket trade despite narrowly beating Q3 expectations. Here’s how the automaker’s results compared to analysts’ estimates: Adjusted EPS: $0.30 vs $0.27 expected Revenue: $37.2 billion vs $36.25 billion expected Ford recorded a net loss of $827 million due to continued supply chain issues and costs related to disbanding its autonomous vehicle unit. Adjusted profits were down 40% year over year. Ford updated its full-year guidance, expecting adjusted earnings before interest and taxes of about $11.5 billion vs $11.5 billion to $12.5 billion previously. The company raised its full-year adjusted cash flow forecast to between $9.5 billion and $10 billion vs $5.5 billion to $6.5 billion previously. Higher Prices Boost McDonald’s Profits McDonald’s (MCD) shares are up 2.1% ahead of the open after beating Q3 expectations. Here’s how the fast food giant’s results compared to analysts’ expectations: EPS: $2.68 vs $2.58 expected Revenue: $5.87 billion vs $5.69 billion expected McDonald’s did not see a slowdown in traffic even as it raised its menu prices to mitigate higher costs. Global same-store sales jumped 9.5%, crushing estimates of 5.8% growth. Same-store sales in the U.S. rose 6.1%. U.S. Economy Expands More than Expected The U.S. economy expanded more than expected in Q3 as the shrinking trade deficit boosted GDP. The Bureau of Economic Analysis’ first estimate of Q3 GDP shows 2.6% annualized growth vs 2.3% expected. That’s the first positive reading of this year after the economy contracted in Q1 and Q2. Weekly Jobless Claims Tick Higher Weekly jobless claims rose less than expected last week. The Labor Department reported 217,000 Americans filed initial claims for unemployment benefits. That was up by 3,000 from the previous week but lower than expectations for 220,000. Continuing claims rose by 55,000 to 1.44 million in the week ending October 15. ECB Hikes Rates The European Central Bank announced its another 75-basis point rate hike today. That’s the second 0.75% rate hike in a row and puts the main benchmark rate in at 1.5%, the highest level seen since 2009. The ECB confirmed more rate hikes are ahead. In its statement, the bank said, “The Governing Council… expects to raise interest rates further, to ensure the timely return of inflation to its 2% medium-term inflation target.” The Eurozone is experiencing record-high inflation and a slowing economy. Several economists have projected a 50-basis point hike in December but the ECB did not indicate the level of future hikes. Key Earnings After the Close Here are the key companies set to report earnings after the close today: Apple (AAPL) Amazon (AMZN) Intel (INTC)
Continue Reading -->Coffee With Greta: Big Tech Stumbles
DJIA Futures: -102 (-0.3%) SPX Futures: -36 (-0.9%) NASDAQ Futures: -223 (-1.9%) Good morning friends! Futures are falling as traders digest disappointing earnings from big tech companies. Let’s get right to it! Alphabet Disappoints Alphabet (GOOGL) shares are dropping 6.7% after missing Q3 expectations on the top and bottom line. Here’s how the Google parent company’s results compared to analysts’ expectations: EPS: $1.06 vs $1.25 expected Revenue: $69.09 billion vs $70.58 billion expected YouTube ad revenue: $7.07 billion vs $7.42 billion expected Google Cloud revenue: $6.9 billion vs $6.69 billion expected Revenue growth slowed to just 6% in the quarter vs 41% in the same quarter a year ago. That’s the weakest quarter of growth since 2013 excluding early in the pandemic. The CFO said hiring in Q4 will slow to less than half of the additions in Q3. Microsoft Tops Fiscal Q1 Expectations, Guidance Falls Short Microsoft (MSFT) shares are falling 6.8% in premarket trade despite beating fiscal Q1 expectations after guidance came in weak. Here’s how the tech giant’s results compared to analysts’ expectations: EPS: $2.35 vs $2.30 expected Revenue: $50.12 billion vs $49.61 billion expected Revenue was up 11% year over year. But revenue in the Intelligent Cloud business segment missed expectations at $20.33 billion vs $20.36 billion estimated. Azure revenue grew just 35% in fiscal Q1, down from 40% in the previous quarter and lower than analysts’ expectations for growth over 36%. Microsoft forecast fiscal Q2 revenue between $52.35 billion and $53.35 billion vs analysts’ estimates of $56.05 billion. The company expects Azure revenue growth of 37% next quarter vs the 39.4% estimate from analysts. Price Hikes Boost Chipotle Earnings Chipotle Mexican Grill (CMG) shares are slipping 0.6% ahead of the open after reporting mixed Q3 results. Here’s how the restaurant chains results compared to analysts’ expectations: Adjusted EPS: $9.51 vs $9.21 expected Revenue: $2.22 billion vs $2.23 billion expected Same-store sales rose 7.6% year over year vs 7.3% expected. Total transactions declined 1% but the CEO said Chipotle saw “minimal resistance” to higher menu prices. Chipotle forecast Q4 same-store sales growth in the mid-to-high single digits and expects to open between 235 and 250 new restaurants by year-end. Boeing Reports Surprise Loss Boeing (BA) shares are down 0.7% in premarket trade after reporting an unexpected Q3 loss. Here’s how the plane maker’s results compared to analysts’ expectations: Loss per share: $6.18 vs $0.07 in earnings expected Revenue: $15.96 billion vs $17.76 billion expected Boeing reported a $2.8 billion loss in its defense unit due to the KC-46 tanker and Air Force One. Commercial revenue rose 40% from a year ago as Boeing delivered 112 planes during the quarter vs 85 in Q3 2021. The company generated nearly $3 billion in free cash flow, up from $507 million a year earlier. Boeing reiterated its forecast to achieve positive free cash flow for the year. Bed Bath & Beyond Appoints Interim CEO to Position Permanently Bed Bath & Beyond (BBBY) shares are tumbling 7.4% ahead of the open after naming its interim CEO, Sue Gove, to the position permanently. Gove was appointed to the position over the summer after the company’s board pushed out the former CEO. Bed Bath is still searching for a new CFO. The prior chief accounting officer is serving in that role on an interim basis. Mortgage Demand Falls Further Mortgage demand continued to drop last week as rates surged. The Mortgage Bankers Association reported purchase application fell 2% weekly and were down 42% year over year. Refinance applications slipped just 0.1% weekly and were down 86% annually. Demand is at the lowest level since 1997. The average 30-year contract rate rose to 7.16% from 6.94%, a 21-year high. New Home Sales Expected to Fall The Commerce Department reports new home sales for September at 10:00 a.m. ET. That report is expected to show the pace of sales fell last month to a seasonally adjusted annual rate of 593,000 units vs 685,000 in August. Key Earnings After the Close Here are the key companies set to report earnings after the close today: Meta (META) Ford (F)
Continue Reading -->Coffee With Greta: Traders Await Big Tech Earnings
DJIA Futures: -161 (-0.5%) SPX Futures: -14 (-0.4%) NASDAQ Futures: -15 (-0.1%) Good morning friends! Futures are falling as traders digest a barrage of Q3 earnings and await big tech earnings later today. Let’s get right to it! Coca-Cola Beats Q3 Expectations, Hikes Outlook Coca-Cola (KO) shares are up 2.4% ahead of the open after beating Q3 expectations and hiking its full-year outlook. Here’s how the beverage giant’s results compared to analysts’ expectations: Adjusted EPS: $0.69 vs $0.64 expected Revenue: $11.05 billion vs $10.52 billion expected Sales rose 10% while organic revenue jumped 16%, field by higher prices for the company’s products. Coke now expects comparable earnings growth of 6% to 7% this year vs 5% to 6% previously. UPS Reports Mixed Q3 Results UPS (UPS) shares are up 2.6% in premarket trade after reporting mixed Q3 results. Here’s how the shipping giant’s results compared to analysts’ expectations: EPS: $2.99 vs $2.84 expected Revenue: $24.16 billion vs $24.30 billion expected UPS reaffirmed its full-year outlook for revenue of $102 billion. The company’s shipping volumes decline in the quarter but that drop was partially offset by higher rates. General Motors Crushes Q3 Profit Expectations General Motors (GM) shares are up 3% ahead of the open after sharply beating Q3 earnings expectations. Here’s how the automaker’s results compared to analysts’ estimates: Adjusted EPS: $2.25 vs $1.88 expected Revenue: $41.89 billion vs $42.22 billion expected GM maintained its full-year guidance with the CFO saying the company expects to hit the “mid-point” of that outlook. In a letter to investors, CEO Mary Barra said “demand continues to be strong for GM products and we are actively managing the headwinds we face.” JetBlue Misses Q3 Profit Estimates JetBlue (JBLU) shares are slipping 3.6% in premarket trade after missing Q3 profit expectations. Here’s how the airline’s results compared to analysts’ estimates: Adjusted EPS: $0.21 vs $0.23 expected Revenue: $2.56 billion, in line with estimates Revenue rose 30% year over year as travelers paid higher fares. But JetBlue’s operating margin narrowed to 5.4% vs 9.4% a year ago as expenses surged 36%. In a note to employees, the CFO said, “we have to continue to be thoughtful about every penny we spend, particularly in today’s environment, since our entire business model of competing with lower fares is based on having lower costs relative to the legacy airlines.” She also said the airline won’t post a full-year profit “after the bumps we faced in the first half of the year with the Omicron variant and operational challenges.” General Electric Jumps Despite Profit Miss General Electric (GE) shares are up 1.9% ahead of the open despite missing Q3 expectations. Here’s how the company’s results compared to analysts’ expectations: Adjusted EPS: $0.35 vs $0.47 expected Revenue: $18.4 billion, in line with estimates GE cut its full-year EPS outlook to between $2.40 and $2.80 vs $2.80 to $3.50 previously. That updated forecast includes a $500 million warranty charge in the company’s renewable power division. The outlook implies $1.23 per share in Q4 earnings vs analysts’ expectations for $1.17. 3M Slashes Outlook 3M (MMM) shares are slipping 2.9% in premarket trade after mixed Q3 results and cutting its full-year outlook. Here’s how the company’s results compared to analysts’ estimates: EPS: $2.69 vs $2.60 expected Revenue: $8.6 billion vs $8.7 billion expected 3M now expects full-year EPS between $10.10 to $10.35 vs $10.30 to $10.80 previously. That implies roughly $8.1 billion in Q4 sales and $2.40 EPS vs Wall Street’s expectations for $8.4 billion in revenue and EPS of $2.55. Key Earnings After the Close Here are the key companies set to report earnings after the close today: Microsoft (MSFT) Alphabet (GOOGL) Chipotle Mexican Grill (CMG) Spotify (SPOT)
Continue Reading -->Coffee With Greta: Stocks Build on Best Week Since June
DJIA Futures: +212 (+0.7%) SPX Futures: +24 (+0.6%) NASDAQ Futures: +37 (+0.3%) Good morning friends! Futures are rising as traders try to build on the market’s best week since June. Let’s get right to it! Big Week of Earnings, Inflation Data The market is looking to build on last week’s rally after the major indexes all logged their largest weekly gains since June. Megacap tech names are all set to report Q3 results this week. Microsoft (MSFT) and Alphabet (GOOGL) report Tuesday, Meta (META) Wednesday, with Apple (AAPL) and Amazon (AMZN) on Thursday. The focus is on GOOGL and META after Snap’s (SNAP) revenue miss last week. This week will also cap off with the Fed’s preferred inflation gauge coming out Friday morning. The core PCE price index is expected to have slowed in September after accelerating more than expected in August. Tesla Cuts Car Prices in China Tesla (TSLA) shares are down 2.8% ahead of the open after the electric automaker cut some of its car prices in China. The starting price for the Model 3 is now 265,900 Chinese yuan ($36,615) from 279,900 yuan ($38,415.99). The Model Y price dropped to 288,900 yuan ($39,779.14) from 316,900 yuan ($43,634.51). The cuts reverse some of the earlier price increases Tesla implemented due to inflation of raw material costs. They also come after CEO Elon Musk said “China is experiencing a recession of sorts” last week. Tesla delivered a record 83,135 vehicles in China in September, a monthly record for the company. Chinese Tech Stocks Tumble Chinese tech stocks listed in the U.S. are tumbling as President Xi Jinping tightens his grip on power in the country. Alibaba (BABA) shares are dropping 10.9% in premarket trade with Baidu (BIDU) tumbling 11.9%. Xi paved the way for his third term as president over the weekend and packed the core committee of power with loyalists. The private tech sector in China has been under threat from Xi in recent years and those policies are expected to continue with him remaining in power. Oil Prices Drop on Weak China Demand Oil prices are falling this morning after Chinese data showed weak demand in September. West Texas Intermediate crude futures are down 2% to $83 bbl while Brent crude futures are down 1.6% to $92 bbl. China imported 9.79 million barrels per day of crude in September, down 2% year over year. Eurozone Business Activity Drops European business activity contracted further this month as surging energy costs put pressure on the economy. The euro zone’s flash composite PMI fell to 47.1 in October from 48.1 last month. Any reading below 50 represents a contraction. Germany is seeing the worst slowdown so far with business activity falling to 44.1 from 45.7. The euro dropped against the U.S. dollar following that data, trading at $0.982.
Continue Reading -->Coffee With Greta: Social Media Stocks Slide After SNAP’s Q3 Miss
DJIA Futures: -200 (-0.7%) SPX Futures: -27 (-0.7%) NASDAQ Futures: -133 (-1.3%) Good morning friends! Futures are slipping as traders digest the latest batch of earnings. Let’s get right to it! Snap Plunges on Revenue Miss Snap Inc (SNAP) shares are plunging 28% ahead of the open after missing Q3 revenue expectations. Here’s how the social media giant’s results compared to analysts’ expectations: EPS: $0.08 vs a small loss expected Revenue: $1.13 billion vs $1.14 billion expected Global Daily Active Users: 363 million vs 358.2 million expected Revenue was up just 6% year over year, the first single-digit growth since Snap went public in 2017. Even as daily active users rose 19% compared to a year ago, average revenue per user dropped 11%. In its letter to investors, the company said it is struggling with reduced spending from advertisers. The letter said, “We are finding that our advertising partners across many industries are decreasing their marketing budgets, especially in the face of operating environment headwinds, inflation-driven cost pressures, and rising costs of capital. The company declined to give Q4 guidance. Snap’s revenue miss is dragging down other stocks in premarket trade with Pinterest (PINS) tumbling 8.2%, Meta (META) down 4%, and Alphabet (GOOGL) falling 2%. American Express Slips Despite Earnings Beat American Express (AXP) shares are falling 4.8% in premarket trade despite beating Q3 expectations on the top and bottom line. Here’s how the credit card company’s results compared to analysts’ expectations: EPS $2.47 vs $2.40 expected Revenue: $13.56 billion vs $13.52 billion expected Card-member spending jumped 21% in the quarter, with travel spending surging 57%. American Express built up its loan loss reserves by $387 million in anticipation of a weakening economy. The company hiked its full-year EPS forecast to $9.25 to $9.65. Treasury Yields Extend Rally Treasury yields are up again today with the 10-year hitting a fresh 14-year high. The 10-year yield is up 6 basis points to 4.3% while the 2-year yield is up just about 1 basis point to 4.61%. The recent rally in yields comes amid ramped-up concerns about a recession. Philadelphia Fed President Patrick Harker said in a speech Thursday, “We are going to keep raising rates for a while. Given our frankly disappointing lack of progress on curtailing inflation, I expect we will be well above 4% by the end of the year.” Fed Governor Lisa Cooke echoed those comments, saying inflation is “too high” and the Fed will continue rate hikes “until the job is done.” Oil Prices Steady Oil prices are flat today as concerns about higher interest rates offset hopes of higher Chinese demand and production cuts. West Texas Intermediate crude futures are down 0.1% to $84 bbl while Brent crude futures are slipping 0.1% to $92 bbl. Several Fed officials made hawkish comments this week, tamping down optimism about increased demand in China as the country loosens Covid restrictions. Key Earnings Next Week Several mega-cap names are set to report Q3 results next week, here’s a look at the key reports on the calendar: Tuesday AM: Coca-Cola (KO), General Electric (GE), UPS (UPS), General Motors (GM), 3M (MMM) Tuesday PM: Microsoft (MSFT), Alphabet (GOOGL), Twitter (TWTR) Wednesday AM: Boeing (BA) Wednesday PM: Meta (META), Ford (F) Thursday AM: Caterpillar (CAT), Shopify (SHOP), Southwest Airlines (LUV) Thursday PM: Apple (AAPL), Amazon (AMZN), Pinterest (PINS) Friday AM: Exxon Mobil (XOM), Chevron (CVX)
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DJIA Futures: +60 (+0.2%) SPX Futures: +1 (+0.01%) NASDAQ Futures: -21 (-0.2%) Good morning friends! Futures are mixed as traders digest the latest batch of Q3 earnings. Let’s get right to it! U.K. Prime Minister Resigns U.K. Prime Minister Liz Truss resigned from her position today after implementing a failed tax-cutting budget that rocked financial markets. In a statement, Truss said, “We set out a vision for a low-tax, high-growth economy that would take advantage of Brexit. I recognize though, given the situation, I cannot deliver the mandate on which I was elected by the Conservative Party. I have therefore spoken to His Majesty the King to announce that I am resigning as leader of the Conservative Party.” Truss had faced pressure from her own party to step down with reports saying more than 100 MPs had written letters of no confidence in the prime minister. On September 23, her finance minister announced a “mini-budget” that included a series of unfunded tax cuts. That plan caused extreme turmoil in the British bond market and imploded the value of the pound. Most of the policies have since been reversed by the new finance minister. Tesla Slips As Q3 Revenue Falls Short Tesla (TSLA) shares are falling 5.7% ahead of the open after reporting mixed Q3 results. Here’s how the electric automaker’s results compared to analysts’ expectations: Adjusted EPS: $1.05 vs $0.99 expected Revenue: $21.45 billion vs $21.96 billion expected Automotive gross margins were unchanged from Q2 at 27.9%. CEO Elon Musk was upbeat about Tesla’s future on the earnings call. He said, “I can’t emphasize enough we have excellent demand for Q4 and we expect to sell every car that we make for as far into the future as we can see. The factories are running at full speed and we’re delivering every car we make, and keeping operating margins strong.” The automaker reiterated its previous guidance saying, “Over a multi-year horizon, we expect to achieve 50% annual growth in vehicle deliveries.” IBM Tops Q3 Expectations IBM (IBM) shares are up 4.2% in premarket trade after beating Q3 expectations on the top and bottom line. Here’s how the tech company’s results compared to analysts’ expectations: Adjusted EPS: $1.81 vs $1.77 expected Revenue: $14.11 billion vs $13.51 billion expected The company hiked its full-year revenue forecast following that beat. The CEO said, “With our year-to-date performance, we now expect full-year revenue growth above our mid-single digit model.” American Airlines Returns to Profitability American Airlines (AAL) shares are up 1.4% ahead of the open after topping Q3 estimates. Here’s how the airline’s results compared to analysts’ expectations: Adjusted EPS: $0.69 vs $0.56 expected Revenue: $13.46 billion vs $13.42 billion expected Revenue hit a record-high during the quarter and was up 13% from 2019 levels. That jump came even as American flew 10% less as travelers paid higher prices. The airline forecast total Q4 revenue will be up 13% compared to 2019 with adjusted EPS between $0.50 and $0.70. Weekly Jobless Claims Drop to 3-Week Low Weekly jobless claims dropped to a 3-week low last week as the impact of Hurricane Ian fades away. The Labor Department reported 214,000 Americans filed initial claims for unemployment benefits last week. That was down by 12,000 from the previous week and lower than economists’ expectations for an increase to 230,000. Existing Home Sales Expected to Fall The National Association of Realtors reports existing home sales for September at 10:00 a.m. ET. Economists expect that report to show sales slowed last month to a seasonally adjusted annual rate of 4.70 million units from 4.80 million in August. The housing market has slowed rapidly in recent months as mortgage rates hit the highest levels seen in more than 20 years. Upcoming Earnings Here are the key companies set to report earnings after the market close today: Snap (SNAP)
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