Category Archives for Coffee With Greta
Coffee With Greta: Roku’s BIG Revenue Miss
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: +42 (+0.1%) SPX Futures: +7 (+0.1%) NASDAQ Futures: +23 (+0.2%) Good morning friends! Futures are slightly higher after the market tumbled Thursday with the Dow suffering its worst drop of 2022. Let’s get right to it! Roku Plunges After Disappointing Q4 Roku (ROKU) shares are tumbling 27.2% ahead of the open after the company reported slower than expected revenue growth. Roku reported adjusted earnings of $0.17 per share on $865.3 million in revenue. Earnings were ahead of consensus but revenue fell short of analysts’ estimates for $894 million. Roku’s sales rose 33% year-over-year, a sharp slowdown from 51% in Q3 and 81% growth in Q2. The company expects that slowdown to continue. Roku forecast Q1 revenue of $721 million, implying 25% growth. The stock is the second largest holding in Cathie Wood’s Ark Innovation ETF (ARKK). ARKK is down 2.3% in premarket trade. St. Louis Fed President Reiterates Hawkish Stance St Louis Fed President James Bullard warned the U.S. is at risk of “out of control” inflation. In a panel discussion at Columbia University, Bullard repeated his calls to “front-load” rate hikes with a full percentage increase by July 1. He said, “the Fed should move faster and more aggressively than we would have in other circumstances.” CME Group’s FedWatch Tool now shows 69% of traders expect a 0.25% rate hike at the March meeting, 93% expected a 0.5% hike just a week ago. Russia-Ukraine Tensions Escalate The market is continuing to monitor the tensions between Russia and Ukraine as the U.S. calls for a diplomatic solution. Ukraine has accused pro-Russian rebels of attacking a village near the border on Thursday. Russia is continuing to demand the removal of all NATO and U.S. troops from Eastern Europe. President Biden told reporters Thursday it appears Russia is engaged in a “false flag operation” and it is likely Moscow will invade Ukraine “in the next several days”. The VanEck Russia ETF (RSX) tumbled 5.2% on Thursday and is down 1.9% ahead of the open. Senate Avoids Government Shutdown The Senate passed a short-term funding bill in a 65-27 vote Thursday to avoid a government shutdown today. The legislation will now be signed by Biden and maintains current funding levels through March 11. Lawmakers are now hoping to agree on a long-term spending bill which would fund the government through the end of the fiscal year on September 30. Existing Home Sales Preview The National Association of Realtors reports existing home sales for January at 10:00 a.m. ET. Consensus estimates are for sales to fall to a seasonally adjusted annual rate of 6.10 million units from 6.18 million in December. Homebuyers have been squeezed by high prices due to low supply with demand at record highs. Rising mortgage rates have made that affordability issue worse. No Trading Monday Next week will be shortened for traders as the markets are closed Monday in observance of Washington’s Birthday. There will be no Coffee with Greta that morning but I’ll be back in your inbox Tuesday morning! In Case You Missed It Ford’s (F) Mustang Mach-E beat out Tesla’s (TSLA) Model 3 as Consumer Reports’ top EV pick in 2022. The group said the Mach-E is better when it comes to self-driving and ensuring the driver remains alert. Tesla fell seven spots to 23rd out of 32 major auto brands on the list.
Continue Reading -->Coffee With Greta: Walmart Pops, Nvidia Slips
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: -121 (-0.4%) SPX Futures: -20 (-0.4%) NASDAQ Futures: -78 (-0.5%) Good morning friends! Futures are lower as the market digests some key earnings. Let’s get right to it! Walmart Pops on Strong Earnings Walmart (WMT) shares are up 1.5% ahead of the open after the retailer beat Q4 expectations on the top and bottom line. The company reported adjusted earnings of $1.53 per share on $152.87 billion in revenue. That beat analysts’ expectations for adjusted EPS of $1.50 on $151.53 billion in revenue. Walmart’s earnings show the retailer had a strong performance over the holidays. Same-store sales in the U.S. rose 5.6%, in-line with expectations. Walmart hiked its quarterly dividend to $0.56 per share and said it plans to repurchase $10 billion of its stock in fiscal 2023. Nvidia Crushes Q4 Expectations Nvidia (NVDA) shares are down 2% in premarket trade despite reporting a record-breaking fourth quarter. The chipmaker reported adjusted earnings of $1.32 per share on $7.64 billion in revenue. That was higher than analysts’ expectations for EPS of $1.22 on $7.42 billion in revenue. Nvidia’s profits were up 69% year-over-year, while revenue jumped 53%. The company’s gaming business remains its biggest revenue generator. Sales in that division rose 37% year-over-year to $3.42 billion in Q4, driven by sales of its GeForce graphics processors. Nvidia’s data center sales jumped 71% annually to $3.26 billion, while professional visualization sales surged 109% to $643 million. Automotive chip sales fell 14% year-over-year to $125 million amid continued supply constraints for global automakers. The company also had strong Q1 guidance, forecasting $8.10 billion in sales vs the consensus estimate for $7.29 billion. Nvidia also has $9 billion in long-term supply obligations, up from $2.54 billion a year ago. DoorDash Users Hit Record-High DoorDash (DASH) shares are surging 21.5% ahead of the open after reporting record-high user numbers in Q4 even as restaurants reopened. The delivery app reported a steeper profit loss than expected, at $0.45 per share vs the $0.25 loss analysts were expecting. But $1.3 billion in revenue came in higher than estimates for $1.28 billion. The company’s gross-order value jumped 36% year-over-year to $11.2 billion. That was ahead of analysts’ projections for $10.6 billion. DoorDash also had 369 million total orders last quarter vs consensus estimates for 361 million. The company forecast gross-order value this year will range between $48 billion and $50 billion, in-line with analysts’ projections of $49.4 billion. Weekly Jobless Claims Rise Unexpectedly The Labor Department reported 248,000 Americans filed initial claims for unemployment benefits last week. That was up 23,000 from the previous week and higher than expectations for claims to fall to 218,000. It’s the first time claims have risen in a month. Continuing jobless claims fell more than expected to 1.59 million down about 26,000 from the previous week and better than expectations for 1.62 million. Housing Construction Stumbles U.S. home construction pulled back in January as builders struggle with supply chain issues. The Census Bureau reported housing starts fell 4.1% at the beginning of the year, to a seasonally adjusted annualized rate of 1.638 million units. That was a steeper drop than economists’ expectations for a SAAR of 1.69 million units. Single-family starts tumbled 5.6% while multi-family starts fell 2.1%. But permitting activity beat expectations, signaling the pullback in homebuilding may be short-lived. New permits approved in January were at an SAAR of 1.899 million, up 0.7% from December and higher than economists’ forecasts for 1.75 million. Homebuilder sentiment fell 1 point on Wednesday to 82, declining for the second straight month as builders struggle with supply. The average size of a 30-year mortgage in the U.S. also hit a new record high at $453,000 this week. And the average 30-year mortgage rate popped above 4% for the first time since 2019. Higher rates are expected to squeeze more buyers out of the market who are already struggling with high prices. In Case You Missed It The Fed’s January meeting minutes told us what we already know, the bank is ready to raise rates and shrink its balance sheet. But the readout didn’t provide much detail about how many rate hikes officials expect this year. FOMC participants agreed this tightening cycle should be faster than the last and said they will assess moves on a meeting-by-meeting basis. The VanEck Oil Services ETF (OIH) jumped to the highest level in more than two years Wednesday as tensions simmer between Russia and Ukraine. The fund closed 2.3% higher at $248.54 and is up 34.5% YTD. The jump in energy prices comes amid continued tensions between Russia and Ukraine. U.S. officials confirmed Thursday that Russia had increased its troop presence at the Ukraine border by 7,000 in recent days. That contradicts Moscow’s previous claim it was pulling troops back.
Continue Reading -->Coffee With Greta: Inflation Boosts Retail Sales
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: -45 (-0.1%) SPX Futures: -8 (-0.2%) NASDAQ Futures: -38 (-0.3%) Good morning friends! Futures are flat as the market digests a strong retail sales report. Let’s get right to it! Retail Sales Surge Amid Hot Inflation The Census Bureau reported retail sales rose 3.8% in January, beating expectations for a 2.1% increase. Core retail sales, which excludes auto and gas sales, jumped 3.3% vs expectations for 0.8%. The beat comes despite inflation soaring to a 40-year high in January, when the CPI surged 7.5%. Since the data is not adjusted for inflation, those surging prices helped boost the sales total to $649.8 billion, as Americans paid more for most goods. Retail sales were 13% higher compared to January 2021 December’s sales were revised lower to show a 2.5% drop from the previous 1.9% decline. Roblox Tumbles on Earnings Miss Roblox (RBLX) shares are dropping 17.2% ahead of the open after the online gaming company reported a steeper Q4 loss than expected. Roblox reported an adjusted loss of $0.25 per share on $568.8 million in revenue. But analysts had forecast a per share loss of just $0.12. Roblox’s bookings also fell short at $770.1 million vs expectations for $772 million. The company defines bookings as “revenue plus the change in deferred revenue during the period and other non-cash adjustments.” This is an important metric because Roblox games use the digital currency Robux for transactions between players, which may be considered “deferred revenue”. The company did report strong user growth. Average Daily Active Users jumped 33% year-over-year to 49.5 million in Q4. In January, DAUs were already up to 54.7 million. “With nearly 55 million daily active users, Roblox is increasingly an integral part of people’s lives,” said the CEO. “As we look ahead to 2022, we will continue to develop our technology to enable deeper forms of communication, immersion and expression on our platform.” Airbnb Pops on Strong Guidance Airbnb (ABNB) shares are up 2.9% in premarket trade after Q4 earnings and Q1 guidance both beat expectations. The company reported earnings of $0.08 per share on $1.53 billion in revenue. That beat analysts’ expectations for EPS of $0.03 on $1.46 billion in revenue. Airbnb’s strong performance came as bookings continued to rebound from the pandemic. The company said average trip lengths have increased by 15% in the past two years, as remote work becomes more permanent for many in the U.S. Stays of more than seven days now represent nearly half of all gross bookings. Airbnb expects Q1 2022 bookings to exceed Q1 2019 levels. The company also forecast revenue between $1.41 billion and $1.48 billion this quarter, topping consensus estimates for $1.24 billion. High Lumber Prices May Weigh on Homebuilders The National Association of Homebuilders releases its February sentiment index at 10:00 a.m. ET. That survey is expected to slip to 82 this month from 83 in January. Homebuilders have benefited from strong demand and short supply in the housing market. But high costs have weighed on their business. And lumber prices are climbing again after cooling last summer. CNBC reported that lumber prices are three times higher than average pre-pandemic levels. The NAHB has estimated those high prices have added more than $18,600 to the price of a new single-family home. Fed Minutes Ahead The Federal Reserve releases the minutes of its January meeting at 2:00 p.m. ET today. The market is eyeing this report to get more clarity on the Central Bank’s plans to tighten monetary policy. With the CPI hitting a 40-year high and the PPI remaining at a record high in January, many analysts have raised their rate hike expectations for the year. The market has priced in as many as seven rate hikes this year. CME Group’s FedWatch Tool shows 57.9% of traders expect the March rate hike to be 0.5% instead of 0.25%. In Case You Missed It President Biden expressed cautious optimism about Russia pulling troops back from the Ukraine border on Tuesday. In a speech at the White House, Biden said the U.S. is prepared to defend NATO members if needed. He reiterated America’s commitment to Ukraine’s sovereignty. Biden said he has made it clear to Russia that the U.S. “will respond” forcefully if Russia targets Americans or Ukraine. Marriott International (MAR) shares closed at a new record $181.20 per share after strong Q4 earnings Tuesday. The hotel chain beat expectations on both the top and bottom line last quarter. Revenue more than doubled year-over-year as leisure bookings bounced back. Marriott said it expects business demand to continue rebounding as the economy recovers.
Continue Reading -->Coffee With Greta: More HOT Inflation Data
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: +352 (+1.0%) SPX Futures: +55 (+1.3%) NASDAQ Futures: +244 (+1.8%) Good morning friends! Futures are higher as the market digests some more hot inflation data and Russia-Ukraine tensions appear to be cooling. Let’s get right to it! U.S. Producer Prices Surge The Bureau of Labor Statistics released more hot inflation data this morning. The Producer Price Index surged 9.7% year-over-year in January, higher than expectations for 9.1%. On a monthly basis, the PPI rose 1.0% vs expectations for 0.3%. The Core PPI, which excludes food, energy, and trade prices, jumped 0.9% monthly and 6.9% annually. Both of those readings were higher than expected. This comes after the CPI surged 7.5% year-over-year in January, marking the fastest pace of inflation in 40-years. The higher producer prices are expected to contribute to higher consumer inflation down the line, as producers pass down those costs. Russian Troops Pull Back from Ukraine Border Oil prices are retreating, stock futures are higher, and cryptocurrencies are up after Moscow announced it is pulling back some of the troops at the Ukraine border. U.S. crude prices are down nearly 3%, under $93 per barrel. Oil prices hit a seven-year high as tensions appeared to escalate on Monday. Over the past 24 hours, Bitcoin is 3.7% higher while Ethereum has risen 5.7%. The bounce comes as there appears to be a deescalation between Russia and Ukraine. A spokesman for the Russian Ministry of Defense said the troops had completed their military drills along the Ukraine border and will begin moving back to their bases today. But NATO officials are urging caution in taking Russia’s word. NATO Secretary General Jens Stoltenberg said the group had “not seen any sign of de-escalation on the ground from the Russian side.” The tensions stem from Ukraine’s desire to join NATO, while Russia wants that to never be allowed to happen. Moscow also wants NATO to shrink its presence in Eastern Europe. Israeli Chipmaker Soars on Intel Acquisition News Tower Semiconductor (TSEM) shares are up 41% in premarket trade following a report that it is about to acquired by Intel (INTC). The Wall Street Journal reported Monday evening that Intel was looking to buy the chipmaker for nearly $6 billion. The acquisition is reportedly part of Intel’s plans to expand its manufacturing capabilities. TSEM shares soared more than 50% in after-hours trade following the announcement. Tower Semiconductor has manufacturing facilities in Israel, Italy, California, and Texas. It also owns a 51% stake in Tower Partners Semiconductor, which has three locations in Japan. INTC shares are 1.1% higher ahead of the open. In Case You Missed It St Louis Fed President James Bullard reiterated his hawkish stance on monetary policy Monday. He told CNBC the bank is already behind on inflation and needs to “front load” rate hikes. Bullard is calling for interest rates to be a full 1% higher by July, which would mean one 0.5% hike in the next three meetings. He is a voting member of the FOMC this year and said he will try to convince his colleagues that his position is correct. Shares of the major vaccine makers tumbled Monday as COVID cases wane. Moderna (MRNA) shares plunged 11.7%, BioNTech (BNTX) tumbled 9.6%, Pfizer (PFE) fell 1.9%, and Johnson & Johnson (JNJ) closed 1.3% lower. The drop comes as Omicron cases are rapidly dropping across the U.S. The seven-day average of cases in the U.S. plunged 42% in the past week, to 175,000 as of Sunday.
Continue Reading -->Coffee With Greta: The Bulls Disappear
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. DJIA Futures: +6 (+0.02%) SPX Futures: +3 (+0.1%) NASDAQ Futures: +3 (+0.02%) Good morning friends! Futures are flat as the market continues to monitor tensions between Ukraine and Russia. And the market bulls have vanished. Let’s get right to it! Fear Takes Over The market bulls are gone. T3 Live’s weekly market sentiment survey found traders are more bearish than ever. 81% of respondents to this week’s survey said the S&P 500 will go down in the next 30 days. That’s an all-time low in bearish sentiment for the survey. Sentiment flipped on Apple (AAPL), with 68% saying the stock will go down over the next month. And it was even worse for Tesla (TSLA), as 78% are bears on the stock. The risk-off sentiment spread to crypto, with 70% saying they’re bearish on Bitcoin. As traders ditch risk, gold sentiment hit an all-time high for the survey. 81% of traders said they see gold prices going up in the next 30 days. And oil sentiment rose further. 80% of surveyed traders expect those prices to continue rising. Markets Monitor Russia-Ukraine Tensions Global markets are monitoring tensions between Russia and Ukraine. Bloomberg reported this morning that Russian Foreign Minister Sergei Lavrov is proposing a continuation of diplomatic efforts. But Russia is continuing to train along the Ukraine border, with 130,000 troops in the area. The White House says there was no breakthrough from President Biden’s phone call with Russian President Putin over the weekend. Now the German Chancellor is visiting Ukraine and Russia today. A war in Ukraine would add another layer of uncertainty for Wall Street, on top of tightening monetary policy. More Inflation Data, Retail Sales This Week The Bureau of Labor Statistics releases more inflation data Tuesday morning with the January Producer Price Index. All eyes are on that report after the Consumer Price Index surged to a 40-year high last week. Economists expect that report to show prices surged 9.3% year-over-year last month, down from 9.7% in December. Higher producer prices translate into higher consumer prices down the line. The Census Bureau’s retail sales report Wednesday morning will be key to gauge how much January’s inflation pressures hurt consumer activity. Consensus estimates are for that report to show a 2% increase in retail sales last month after a surprise drop in December. In Case You Missed It Pfizer (PFE) and the FDA delayed the company’s emergency request to approve its COVID vaccine for children under 5-years-old. The company had requested the first two doses to be approved while they awaited clinical data for a third dose. But the FDA said they need that data before they will approve the shots. Pfizer expects to release those trial results in April. The first two doses did not produce an adequate immune response in young children. The Los Angeles Rams won Super Bowl LVI at home on Sunday. It’s the team’s first Super Bowl win since 1999 and the second in franchise history. The Rams were losing at the start of the 4th quarter and secured the win with a late comeback drive.
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