Coffee With Greta: Oil Surges, Stocks Rally
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: +154 (+0.5%) SPX Futures: +15 (+0.4%) NASDAQ Futures: +43 (+0.3%) Good morning friends! Futures are higher as oil prices continue to surge and new jobs data beat expectations. Let’s get right to it! Oil, Commodity Prices Soar Oil prices jumped to a 9-year high today as the war in Ukraine intensifies. West Texas Intermediate crude futures rose more than 8% to $112.51 per barrel, the highest price since May 2011. Brent crude futures are also up more than 8% to nearly $114 per barrel, the highest price since June 2014. OPEC+ is set to meet today to discuss April’s output. The group has not yet hinted if it will increase production to offset expected supply shortages from Russia. The International Energy Agency agreed Tuesday to release 60 million barrels of oil from global reserves. That includes 30 million from the U.S. strategic reserves. The U.S. alone consumes more than 20 million barrels of oil per day. Other commodity prices are also soaring, with wheat futures at a 14-year high of $10.59 per bushel. Trading was halted after wheat prices hit limit-up for the second straight day. Private Job Growth Beats Expectations Payroll firm ADP reports U.S. private employers added 475,000 workers in February. That was better than economists’ expectations for 400,000 and a sharp reversal from January’s loss of 301,000. Companies with 500 or more employees added the most jobs at 552,000, while businesses with 50 or less employees lost 96,000. The leisure and hospitality sector added 170,000 jobs. Today’s report comes ahead of the official Labor Department jobs report on Friday. That’s expected to show the economy added 440,000 jobs last month with the unemployment rate dipping to 3.9% Dollar Tree Slips After Earnings Dollar Tree (DLTR) shares are down 2.7% in premarket trade after mixed Q4 results. The discount store reported earnings of $1.78 per share on revenue of $7.12 billion. For the full-year, EPS came in at $5.80 on $26.3 billion in revenue. Analysts expected full-year earnings of $5.57 per share on $26.4 billion. But Dollar Tree’s outlook missed expectations. The company forecast revenue between $6.63 billion and $6.78 billion in Q1 vs analysts’ projections for $6.8 billion. AMC Reports Strong Q4 AMC Entertainment (AMC) shares are down 0.9% ahead of the open despite beating Q4 expectations. The movie theater chain reported a loss of $0.11 per share on $1.17 billion in revenue. That was better than analysts’ expectations for a loss of $0.16 on $1.16 billion in revenue. Attendance at AMC Theaters rose to 59.68 million guests, up sharply from 8.09 million in Q4 2020. SoFi Pops on Outlook SoFi Technologies (SOFI) shares are jumping 15.7% in premarket trade after a record-breaking Q4. The fintech company reported a per share loss of $0.15 at the end of 2021 on $285.6 million in revenue. That was better than analysts’ forecasts for a loss of $0.16 per share on $279 million in revenue. SoFi said it added a record-high 523,000 new members in Q4. The company forecast Q1 adjusted net revenue between $280 million and $285 million with adjusted EBITDA of $5 million. Analysts were projecting adjusted EBITDA of $3 million. For the full-year, SoFi forecast adjusted EBITDA of $180 million vs analysts’ expectations for $147 million. Salesforce Beats Q4 Expectations Salesforce (CRM) shares are up 3.5% ahead of the open after beating fiscal Q4 expectations. The cloud software company reported adjusted earnings of $0.84 per share on $7.33 billion in revenue. That topped expectations for adjusted EPS of $0.74 on $7.24 billion in revenue. Salesforce projected Q1 revenue between $7.37 billion and $7.38 billion, better than analysts’ expectations for $7.26 billion. The company also hiked its full-year fiscal 2023 forecast. Nordstrom Soars on Strong Guidance Nordstrom (JWN) shares are surging 29.1% ahead of the open after issuing strong full-year guidance. The retailer reported Q4 earnings of $1.23 per share on $4.49 billion in revenue. That was better than analysts’ expectations for EPS of $1.02 on $4.35 billion in revenue. Net sales were up 21% year-over-year, but still down 1% compared to 2019. Nordstrom Rack sales continued to improve, down 5% compared to 2019 vs 8% in Q3. Nordstrom forecast revenue growth of 5% to 7% in fiscal 2022, with earnings ranging between $3.15/share to $3.50/share. That topped analysts’ projections for 3.7% revenue growth and EPS of $2.01. Fed Chair to Testify Fed Chair Jerome Powell testifies on monetary policy in the House Financial Services Committee at 10:00 a.m. ET today. Powell must tread a tight line with the war in Ukraine complicating the inflation picture for the Fed. The market has dialed back its rate hike expectations amid uncertainty surrounding the conflict. Most traders now expect a 0.25% hike at the March meeting after previously betting on a 0.5% rate hike. The Fed meets again March 15-16. The Central Bank also releases its Beige book at 2:00 p.m. ET today, which will give the market more clarity on the state of the economy across all 12 Fed districts. Powell testifies in the Senate Banking Committee Thursday. In Case You Missed It Apple (AAPL) halted its product sales in Russia Tuesday. All Apple products listed online through the Apple Store are now unavailable for purchase or delivery in the country. Russia’s state-owned news outlets RT News and Sputnik News are also only available on the App Store within Russia. Mortgage rates are diving as Treasury yields drop amid the Russia-Ukraine war. Data from Mortgage News Daily shows the average 30-year rate dropped to 3.9% Tuesday, after hitting 4.18% Friday. That’s the largest two-day drop since March 2020.
Continue Reading -->Coffee With Greta: Oil Hits 7-Year High on Ukraine Crisis
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: -174 (-0.5%) SPX Futures: -20 (-0.5%) NASDAQ Futures: -63 (-0.4%) Good morning friends! Futures are lower as the market gears up for a new month of trade and all eyes remain on Russia’s attack on Ukraine. Let’s get right to it! Oil Prices Hit 7-Year High U.S. crude prices surged to the highest level since July 2014 amid supply concerns as Russia continues its attack on Ukraine. West Texas Intermediate crude futures jumped 5.7% to $101.17 per barrel. At the same time, Brent crude futures rose 6.3% to $104.16 per barrel. Canada became the first country to ban Russian oil imports Monday. The International Energy Agency is meeting today to discuss “the impact of Russia’s invasion of Ukraine on oil supply and how IEA members can play a role in stabilizing energy markets.” Morgan Stanley hiked its oil price forecasts, expecting Brent to average $110 bbl in Q2. Russia Bears Down on Ukraine Capital Russia is continuing its assault on Ukraine with a massive convoy approaching the capital city of Kyiv. Satellite images showed a 40 mile long convoy of Russian military vehicles approaching the city Monday. Ukrainian and Russian officials held talks in Belarus Monday which ended with no resolution. The ruble is down again today after recovering some losses Monday. The exchange rate is over 102 ruble to $1 USD. The Russian Central Bank kept the Moscow Stock Exchange closed again today. Russia-linked ETFs in the U.S. are continuing to plummet today. The VanEck Russia ETF (RSX) is down 15.8% ahead of the open, with the iShares MSCI Russia ETF (ERUS) falling 11.2%. Russians Rush to Crypto Russians flooded the crypto market Monday as the ruble collapsed in response to new sanctions. Trading volume between the ruble and Bitcoin jumped to a nine-month high, pushing BTC’s value above $41,000. The global crypto market cap is up 12.3% over the past 24 hours to $2.04 trillion. Bitcoin is up 17% at $44,600 with Ethereum rising 13% to $2,900. Crypto exchange Binance confirmed Monday it is blocking the accounts of any Russians targeted by sanctions. Binance said it will not freeze the accounts of other Russian users. Target Rallies on Earnings Target (TGT) shares are surging 12.5% ahead of the open after reporting strong fiscal Q4 earnings. The retailer reported adjusted earnings of $3.19 per share on $31 billion in revenue. Analysts had forecast adjusted EPS of $2.86 on $31.39 billion in revenue. Overall sales were up 9% year-over-year last quarter. Target’s online services expanded 45% in the full-year, after surging 235% the prior year. The company forecast revenue growth in the low to mid single-digits this year and earnings growth in the high single-digits. Domino’s Slides on Weak Q4 Results Domino’s Pizza (DPZ) shares are sliding 6% in premarket trade after missing Q4 expectations The pizza chain reported earnings of $4.25 per share on $1.34 billion in revenue. That was short of analysts’ expectations for EPS of $4.28 on $1.38 billion in revenue. Domino’s also announced CEO Ritch Allison will retire. He will be succeeded by COO Russell Weiner. Zoom Warns of Growth Slowdown Zoom (ZM) shares are down 2.2% ahead of the open after the company’s 2022 revenue forecast disappointed. Zoom reported adjusted Q4 earnings of $1.29 per share on $1.07 billion in revenue after the market closed Monday. That beat analysts’ expectations for adjusted EPS of $1.06 on $1.05 billion in revenue. But traders sold off the stock as revenue growth continues to slow. Zoom’s Q4 revenue was up 21% year-over-year, a slowdown from 35% in Q3. The company forecast Q1 revenue between $1.07 billion and $1.075 billion, which would represent growth of just 12%. For the full year, Zoom expects revenue of $4.53 billion to $4.55 billion, lower than analysts’ expectations for $4.71 billion. Zoom is the 4th largest holding in Cathie Wood’s Ark Innovation ETF (ARKK) which is down 0.4% in premarket trade. Lucid Slashes Production Forecast Lucid Group (LCID) shares are tumbling 12.2% ahead of the open after the electric automaker slashed its 2022 production forecast. The company now expects to produce between 12,000 and 14,000 vehicles this year, down from 20,000 previously. The company cited supply chain constraints for the cut. CEO Peter Rawlinson said, “This reflects the extraordinary supply chain and logistics challenges we’ve encountered and our unrelenting focus on delivering the highest-quality products.” Lucid said it has received over 25,000 customer reservations for its vehicles. In Case You Missed It Tesla (TSLA) shares rallied 7.5% Monday as the company’s new factory in Germany appears close to opening. German newspaper Tagesspiegel reported Tesla is expected to receive its final environmental approvals by the end of this week. That is the last hurdle before Tesla can start producing Model Y’s at Gigafactory Berlin. Tesla is said to be planning a grand opening ceremony in the third week of March. A shipment of SpaceX Starlink satellite internet dishes arrived in Ukraine Monday. Ukraine’s digital minister confirmed the deliveries in a tweet, thanking Elon Musk. Musk responded saying “you are most welcome”. SpaceX sent the satellites to Ukraine following a request over the weekend, to alleviate the impact of suspected Russian cyber attacks on the country.
Continue Reading -->Signs of a Recession?
The market had a significant drop last week, and Sami believes that if Thursday’s low doesn’t hold, we could be in for a recession. But knowing exactly where we go from here is a different story. Find out what Sami’s watching in the week ahead. In this video, Sami explains: – The number one pattern showing up on charts right now – Why CIEN looks different from other stocks – Which name he thinks is going to the moon – The oil stocks that are looking bullish – How his bearish idea list compares to his bullish list
Continue Reading -->Scott Redler’s Dog Bytes: Crypto Capitulation
SPX futures are -60 handles after a big 6.5% move from Thursday’s lows. Friday gave nice follow-through to that. Now we’ll see if the 4287 area holds to give some commitment. We have the Fed later this week and a jobs report that will be turned in after the Belarus meeting.Bitcoin: some accumulated into that 1/20-1/21 capitulation decline with me. Others waited for the Feb 3 buy signal when it cleared the downtrend line and cleared the $39K area. It hit $45K. I trimmed a lot, and held some of my alt coins which were up 30%-90%+ in that bounce. But i went back to 50% cash. I’ve traded it a bit since then and it made a higher low at $34k. It acts decent amid the volatility. It would be nice if the double bottom builds to something bigger. Ethereum: some accumulated on the 1/20-1/21 capitulation when it hit a low of $2159. On Feb 3, it broke above the downtrend line to reclaim the 8/21 day. It hit a high of $3250+ where I reduced. I did trade around it. It looks like it made a double bottom last week but we will need time to confirm that.Positions Disclosure as of 2/28/2022 at 8:59 a.m. ET
Continue Reading -->Coffee With Greta: Russia Slammed by Sanctions
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: -463 (-1.4%) SPX Futures: -67 (-1.5%) NASDAQ Futures: -194 (-1.4%) Good morning friends! Futures are sharply lower as the market assesses the impact of the latest sanctions against Russia. Let’s get right to it! Russian Ruble Plunges The Russian ruble plummeted 29% against the U.S. dollar today after new financial sanctions were imposed against Moscow over the weekend. The ruble hit an all-time low of 119 per dollar but has since pared some of those losses and is now trading at 96 ruble per dollar. Russia’s central bank hiked interest rates from 9.5% to 20% in response and shut down the Moscow Stock Exchange for the day. The U.S. Treasury Department banned transactions with the Russian Central Bank this morning, effectively cutting off the bank from the U.S. dollar. This comes after the U.S., Europe, and Canada imposed limits on the Russian Central Bank’s use of international reserves over the weekend. Officials also removed key Russian banks from the SWIFT interbank messaging system. Russian, Ukrainian Officials Meet Russian and Ukrainian officials are meeting at the Ukraine-Belarus border today. Ukrainian President Volodymyr Zelenskyy has said he does not believe there will be a breakthrough from that meeting. Russia continued its attacks on Ukraine over the weekend, with a focus on the capital city of Kyiv. But Ukrainian forces have so far maintained control of the country. Ukraine’s interior ministry says dozens of civilians have been killed and hundreds have been wounded in the city of Kharkiv. Russian President Vladimir Putin dramatically escalated tensions with the West Sunday, by putting his country’s nuclear deterrence forces on high alert. Putin cited “aggressive statements” by NATO for that decision. Oil Prices Surge Oil prices are rallying again amid renewed uncertainty about how the Russia-Ukraine conflict will impact global supply. West Texas Intermediate crude prices are up 4.6% at $95.74 per barrel. Brent crude prices are up 3.1% at $101 per barrel. Goldman Sachs analysts hiked their forecast for Brent crude prices today to $115 per barrel. U.S. gas prices are expected to hit a new record high amid the surge in oil prices. BP to Sell Stake in Russian Oil Producer BP (BP) shares are down 8.2% ahead of the open after announcing its plan to sell its stake in Russia’s state-owned oil company. BP has held a 19.75% stake in Rosneft since 2013. BP’s CEO is also resigning from the Rosneft board effective immediately.’ Crypto Slips Cryptocurrency prices slid over the weekend amid uncertainty surrounding the financial sanctions against Russia. The global crypto market cap is down 4.4% in the past 24 hours, to $1.8 trillion. Bitcoin is down 3.8% at $38,200 with Ethereum falling 6.6% to $2,600. Trade Deficit Surges to New Record The U.S. trade deficit surged 7.1% in January to a new record $107.6 billion. That’s according to new data from the Commerce Department and is up from $100.5 billion in December. Goods imports jumped 1.8% at the start of the year to a record high $262 billion. Goods exports dropped 1.8% to $154.8 billion. The trade deficit has soared as the U.S. economy opens faster than our global trading partners. The Russia-Ukraine war is expected to make the supply chain issue worse. In Case You Missed It The CDC relaxed its indoor masking recommendations for most Americans on Friday. The agency now recommends wearing a mask only in areas where risk is “high”. The CDC released a new color-coded map for Americans to determine the risk level of their community. About 63% of all U.S. counties are considered low or medium risk. The CDC is now putting heavier weight on hospitalizations and hospital capacity in determining community risk, rather than just case rate.
Continue Reading -->People Still LOVE Oil
Traders remain somewhat cautious towards risk assets, as judged by our latest sentiment survey. And in fact, they seem to view the SPX, Bitcoin, Apple (AAPL), and Tesla (TSLA) as one big asset. But the biggest takeaway is that traders still love oil… which is no surprise given the Ukraine situation. Let’s jump in. IMPORTANT: when we reference “traders” in this article, we are specifically referring to T3 Sentiment Survey respondents. SPX: Bulls Easing Back In Two weeks ago, SPX sentiment fell to an all-time low of 19%. It’s since more than doubled to 40%, which still counts as bearish. Bitcoin Sentiment Bounces Bitcoin sentiment bounced up to 40% this week, exactly matching the SPX. The bounce is to be expected given that Bitcoin came off the lows. Apple: Right in Line Apple (AAPL) sentiment is right in line with the SPX and Bitcoin at 39%. Again, off the lows but definitely not bullish. Tesla: Also In-Line Tesla (TSLA) sentiment fell to 22%, an all-time lows, two weeks ago. It’s since bounced up to 36%, roughly in-line with the SPX, Bitcoin, and Apple. Gold Still Feeling Some Optimism Gold sentiment hit a record high of 81% two weeks ago, and it’s since fallen to 67%. Still, that leans towards optimism. Oil Still Feels the Love Oil has led the market in 2022, with OIH up 31% and XLE up 24%. So as you would expect, traders have been very bullish on oil. And with the Ukraine situation continuing to unfold, oil is up big to start the new week. What Happens Now? Traders are not bullish, but they are definitely not as negative as they were two weeks ago. We’ll soon see if the small rise in optimism is warranted.
Continue Reading -->How Stock Splits Work, and Why You Should Care About Them
10 Things to Know About Stock Splits Alphabet (GOOGL) announced a 20-for-1 stock split on February 1, 2022. And the next day everyone Googled, “what is a stock split?” No, really. You can see the spike in searches in this Google Trends chart: (source: Google Trends) So, let’s break down all the nitty gritty details about stock splits and how they benefit traders! What Is a Stock Split? A stock split is when a company increases the amount of its shares without changing the company’s market value. The most common type is a 2-for-1 forward stock split. But a company’s board of directors can choose any ratio for a split, like Alphabet’s aforementioned 20-for-1 split. How Does a Stock Split Work? Let’s use a 2-for-1 split on a $100 stock. Assume a company has 1,000 shares outstanding that are worth $100 each. That’s a market value of $100,000. (1,000 * $100) The board of directors approves a 2-for-1 stock split. So each $100 share would be split into 2 shares worth $50 each. And the company’s total number of shares outstanding would increase from 1,000 to 2,000. But the market value of the company remains the same: 1,000 shares x $100 = $100,000 market value 2,000 shares x $50 = $100,000 market value Anyone who owned the stock before the split own the same dollar amount worth of stock, just divided into more shares. It’s like slicing a pie into 16 slices instead of 8. If someone had 5 shares worth $100 each ahead of the stock split, they would then have 10 shares worth $50 each after the split. What is the Point of a Stock Split? You may be wondering why a company would do a stock split if there is no change in value. Although a split itself does not make a company more or less valuable, it has the potential to push the stock higher. Splitting a large stock makes it easier for smaller traders and investors to buy and increases the number of shares available to be purchased. What Does a Stock Split Signal About a Company? A stock split signals to the market that a company believes it will continue to grow and attract new investors. By splitting the stock, the company makes it easier for more traders and investors to buy. How Do Companies Typically Perform After a Split? According to Zacks Investment Research, stock prices usually go up after a split. The firm cites two studies which found split stocks outperformed the overall market by 8% the year after the split and 12% the following three years. This could be partly caused by more investors buying the stock, because they feel like they are getting it for a lower price. And more people buying the stock drives the value up over time. Are There Other Kinds of Stock Splits? There is another kind of split — a reverse stock split. In a reverse split, the number of shares is reduced and the share price is increased. Say a company has 1,000 shares worth $100 each, and implements a 1-for-2 reverse split. Every two shares of the stock would be turned into one, leaving the company with 500 total shares worth $200 each. The value of the company stays at $100,000. But the number of shares shrinks and the individual share price is boosted. Why Would a Company Do a Reverse Stock Split? A reverse split is typically used to prevent delisting from an exchange. The New York Stock Exchange, for example, has a minimum share price of $4 for a stock to be listed. If a stock does not maintain that minimum, it can be delisted from the NYSE and sent to an over-the-counter (OTC) market. Reverse splits are also used to boost a company’s image. Many traders and investors look at single-digit stocks as risky investments. So a company can use a reverse split to avoid that stigma. Which Notable Companies Have Done Splits? In the first week of February 2022 alone, there were 60 total splits. Most of them didn’t get any attention. But back in 2020, two of the biggest companies on Wall Street split their stock on the same day. In August 2020, Tesla (TSLA) implemented a 5-for-1 split, while Apple (AAPL) did a 4-for-1 split. Both companies began trading on a split-adjusted basis on Monday, August 31. TSLA shares closed at $2,213.40 on Friday, August 28, making the 5-for-1 split equivalent to $442.68 per share. Tesla’s stock hit new all-time highs of over $1,200 per share in November 2021, up more than 170% from the split. AAPL has also seen success since its 4-for-1 split. The iPhone maker’s stock closed at $499.23 on Friday, August 28, making the 4-for-1 split price $124.81 per share. Apple became the first company in history with a $3 trillion market cap in January 2022 as shares rose to $182.94. The tech giant said the goal of its split was to make the stock “more accessible to a broader base of investors.” What Will GOOGL’s 20-for-1 Stock Split Look Like? Up next for big stock splits is Google-parent Alphabet (GOOGL). In its Q4 earnings report, the company announced a 20-for-1 stock split for Class A (GOOGL) and Class C (GOOG) shares. The decision for such a big stock split comes as Alphabet shares are nearing $3,000 each. To break down what this split will look like, let’s use that price. Alphabet said the stock will begin trading on a split-adjusted basis on July 15, 2022, based on shareholders on July 1. That means one must own the stock on or before July 1 in order to participate in the split. Those who buy shares after that date, will buy based on the split-adjusted price. So if GOOGL shares are worth $3,000 each when the split is implemented, every one share will split into 20 that are worth $150 each. That keeps the value the same for current shareholders, but makes the
Continue Reading -->Coffee With Greta: Traders Buy a Scary Dip
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: +171 (+0.5%) SPX Futures: +28 (+0.7%) NASDAQ Futures: +124 (+0.9%) Good morning friends! Futures are up as the market continues to monitor the conflict in Ukraine and digests new economic data. Let’s get right to it! PCE Inflation Surges in January The Bureau of Economic Analysis reported the PCE price index rose 0.6% monthly in January and surged 6.1% year-over-year. That was in-line with economists’ expectations and is the fastest pace of annual inflation since 1984. The Core PCE Index, which excludes food and energy prices, rose 0.5% monthly and 5.2% annually. That’s the fastest year-over-year increase since 1983. Core PCE is the Fed’s preferred measure of inflation. Consumer Spending Bounces Back The Bureau of Economic Analysis reported consumer spending jumped 2.1% in January. That was higher than expectations for a 1.6% increase and a rebound from the 0.6% decline in December. Americans spent $285.4 billion more on goods in January and $51.8 billion more on services. Russia Closes In on Kyiv Russia continued its offensive on Ukraine overnight. Russian forces are now said to be closing in on the capital city of Kyiv. Ukraine’s Foreign Minister says the city has been hit by “horrific Russian rocket strikes”. This comes as EU leaders agreed to freeze European assets held by Russian President Vladimir Putin and Foreign Minister Sergei Lavrov. Russia says it will impose retaliatory sanctions on the West, after the U.S. and its European partners announced Russian sanctions Thursday. The UN says there have been at least 127 civilian casualties in Ukraine. President Biden is set to participate in an emergency virtual NATO summit this morning. Russia linked stocks in the U.S. are rebounding ahead of the open, with the VanEck Russia ETF (RSX) up 8.5% after plunging in recent sessions. Block Jumps on Q4 Earnings Beat Block (SQ) – formerly Square – shares are surging 19.6% in premarket trade after the digital payments company beat Q4 expectations. The company reported adjusted earnings of $0.27 per share on $4.08 billion in revenue. That beat consensus expectations for adjusted EPS of $0.23 on $4.04 billion in revenue. Block’s Square seller business brought in gross profits of $657 million while Cash App saw gross profit of $518 million, both beat expectations. The company said, “we saw strength in recurring paycheck deposits, which we view as a key barometer of customers using Cash App for their primary banking needs.” Coinbase Crushes Q4 Expectations Coinbase (COIN) shares are up 1.9% ahead of the open after a huge Q4 earnings beat on the top and bottom line. The cryptocurrency exchange reported earnings of $3.32 per share on $2.5 billion in revenue. That crushed analysts’ expectations for EPS of $1.85 on $1.94 billion in revenue. But Coinbase forecast its retail Monthly Transaction Users and total trading volume will be lower this quarter compared to Q4. The company cited the decreased volatility in crypto and the 20% drop in the global crypto market cap so far this quarter for that outlook. Beyond Meat Tumbles on Earnings Miss Beyond Meat (BYND) shares are dropping 11.2% in premarket trade after the alternative meat company sharply missed Q expectations. Beyond Meat reported a loss of $1.27 per share on $100.7 million in revenue. That was worse than analysts’ expectations for a $0.71 per share loss on $101.4 million in revenue. Revenue was down 1.2% compared to Q3 as U.S. grocery store sales tumbled 19.5%. Beyond Meat forecast revenue between $560 million and $620 million this year, shy of analysts’ expectations. Consumer Sentiment Preview The University of Michigan reports Consumer Sentiment at 10:00 a.m. ET. Economists expect the index to be unchanged from the earlier flash reading of 61.7. The survey also includes consumer expectations for inflation over the next year and 5-years. Pending Home Sales Preview The National Association of Realtors reports January pending home sales at 10:00 a.m. ET. Consensus expectations are that contract signings rose 1.0% last month after tumbling 3.1% in December. Pending sales represent home sales that will close in 30 to 90 days. In Case You Missed It Wall Street staged a stunning reversal of losses Thursday. The Dow ended the session 92 points higher after being down 859 points at its session low. The Nasdaq closed the day 3.3% higher after dropping 3.5% earlier in the session. And the S&P 500 settled 1.5% higher after falling 2.6% earlier in the day. All three indexes remain in correction, but the Nasdaq rebounded from bear market territory.
Continue Reading -->Coffee With Greta: Russia Attacks Ukraine
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: -812 (-2.5%) SPX Futures: -108 (-2.6%) NASDAQ Futures: -432 (-3.2%) Good morning friends! Futures are sharply lower after Russia attacked Ukraine overnight. Let’s get right to it! Russia Attacks Ukraine Russia invaded Ukraine overnight after President Vladimir Putin announced a special “military operation” in the country. Putin claims the goal was to demilitarize Ukraine, not occupy the country. He also warned countries that try to interfere will face “consequences they have never seen.” Airstrikes have been reported in the capital city of Kyiv, Odessa, Kharkiv, and Mariupol. Ukraine says Russia has conducted more than 30 strikes on civilian and military infrastructure. NATO Secretary General Jens Stoltenberg said the military alliance will increase its presence in eastern Europe in response. President Biden is meeting virtually with G7 leaders today and is expected to announce severe sanctions against Russia. Oil, Metal Prices Surge Oil prices are surging amid the Russian attack on Ukraine. Brent crude futures are up more than 8%, at nearly $105 per barrel. It’s the first time prices have topped $100 since 2014. U.S. West Texas Intermediate futures are also up 8% and hovering just below $100. Natural gas prices are up 6%. Russia is the second-largest oil exporter in the world and largest natural gas exporter. The conflict is expected to cause gas prices in the U.S. to rise sharply. Fears of a supply disruption are also rocking the metals market. Aluminum prices jumped more than 3% to a record high $3,450 per ton on the London Metal Exchange. Nickel is trading at $25,000 per ton, the highest level in more than a decade. Platinum prices are up more than 2% with palladium surging more than 6%. The conflict is expected to cause gas prices in the U.S. to rise sharply. Russia is a producer of all four metals. The country supplies 35% of global palladium, 10% of platinum, 6% of aluminum, and 5% of nickel. Weekly Jobless Claims Beat Expectations The Labor Department says 232,000 Americans filed initial claims for unemployment benefits last week. That was down 17,000 from the previous week and better than 235,000 expected. Continuing jobless claims fell by 112,000 to 1.48 million vs 1.58 million expected. That’s the lowest level of continuing claims since March 1970. Q4 GDP Revision The Bureau of Economic Analysis revised Q4 GDP growth higher to 7% annually from 6.9%. For all of 2021, GDP rose 5.7%. That’s the fastest calendar-year growth since 7.2% in 1984. Today’s revision included increases in private inventory investment, exports, PCE, and nonresidential fixed investment. Those increases were partly offset by decreases in federal, state and local government spending. Alibaba Earnings Alibaba (BABA) shares are down 8.6% ahead of the open after reporting its slowest revenue growth ever. The Chinese e-commerce giant reported earnings of 16.87 yuan per share on 242.58 billion yuan in revenue. EPS beat expectations but revenue fell short. Sales were up 10% year-over-year, which is the company slowest quarterly growth rate since listing in the U.S. Moderna Earnings Moderna (MRNA) shares are down 4.1% in premarket trade despite beating Q4 expectations. The pharmaceutical giant reported earnings of $11.29 per share on $7.2 billion in revenue. That beat expectations for EPS of $9.90 on $6.78 billion in revenue. Full-year revenue totaled $18.5 billion in 2021, including $17.7 billion from its Covid vaccine. Moderna hiked its 2022 sales forecast for the vaccine by $2 billion to $19 billion. Market Correction Deepens The major indexes fell sharply on Wednesday as the market continues to monitor the conflict between Russia and Ukraine. The S&P 500 slid for the fourth straight session, closing 1.6% lower. The Dow and the Nasdaq both notched a five-day losing streak. The Dow closed at its lowest level yet in 2022. The Nasdaq is nearing bear market territory, down more than 18% from its last closing record in November 2021. New Home Sales Preview The Census Bureau reports January new home sales at 10:00 a.m. ET. Consensus expectations are that sales fell to a seasonally adjusted annual rate (SAAR) of 803,000 units last month. But existing home sales jumped unexpectedly in January. The National Association of Realtors reported existing sales rose 6.7% last month to a seasonally adjusted annual rate of 6.5 million units. Many economists attributed that surprise increase to buyers rushing to get into the market before mortgage rates rise further. The average 30-year rate is now above 4% for the first time since 2019. In Case You Missed It Lowe’s (LOW) beat Q4 expectations as the home improvement retailer benefits from high home values. The company hiked its full-year forecast after beating expectations on the top and bottom line. Lowe’s brought in earnings of $1.78 per share on $21.34 billion in revenue at the end of 2021. LOW shares closed 0.2% higher Wednesday. The market has adjusted its expectations for Fed rate hikes. CME Group’s FedWatch Tool shows 71% of traders believe the Central Bank will raise rates by 0.25% in March. That’s a reversal from 89% who expected a 0.5% rate increase one month ago.
Continue Reading -->Coffee With Greta: S&P Falls Into Correction Territory
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: +196 (+0.6%) SPX Futures: +28 (+0.6%) NASDAQ Futures: +135 (+0.9%) Good morning friends! Futures are bouncing back after the S&P slipped into correction territory for the first time in nearly two years. Let’s get right to it! S&P 500 Falls into Correction The S&P 500 closed in correction Tuesday for the first time in nearly two-years. The index ended the session down 1% at 4,304. That’s down more than 10% from the last record close at 4,796 on January 3, 2022. It’s the first time the S&P has been in a correction since February 27, 2020. Russia Invades Ukraine President Biden declared that Russia’s latest movement into eastern Ukraine is “the beginning of a Russian invasion.” Biden announced economic sanctions against Russia after Moscow moved troops into Ukraine’s Donbas region. The U.S. is also increasing its troop presence in the Baltics in what Biden called a “defensive measure”. The White House is working with Germany to ensure the Nord Stream 2 pipeline project does not move ahead. In an address with Secretary of State Antony Blinken, Ukraine’s Foreign Minister called on the world to “hit Russia’s economy now and hit it hard”. Russian President Putin threatened war against Ukraine in a nationwide address, unless Kyiv abandons its desire to join NATO. Ukrainian President Volodymyr Zelenskyy has activated reservists in response to the Russian troop movement but has not ordered a full military mobilization. Russia-linked stocks fell sharply amid the conflict, the VanEck Russia ETF (RSX) closed 8.9% lower on Tuesday. Virgin Galactic Beats Q4 Expectations Virgin Galactic (SPCE) shares are up 3.3% ahead of the open after the company reported a smaller Q4 loss than expected. The space-tourism company lost $0.31 per share on $141,000 in revenue. That was better than consensus estimates for a loss of $0.35 per share. Although revenue fell short of expectations for $300,000, it was up sharply from zero revenue in Q4 2020. The CEO said, “We remain on track and on schedule to complete our enhancement program and launch commercial service later this year.” Teladoc Slips After Q4 Earnings Teladoc (TDOC) shares are down 0.8% in premarket trade after reporting a smaller Q4 loss than expected. The telemedicine company lost $0.07 per share on $554.2 million in revenue. Analysts had forecast a loss of $0.57 per share on $547 million in revenue. Teladoc forecast full-year sales growth between 25% to 30%, in-line with expectations. The stock is the third largest holding in Cathie Wood’s Ark Innovation ETF (ARKK), which is up 1.6% ahead of the open. Mortgage Rates Tumble as Rates Rise Mortgage application volume fell to the lowest level since December 2019 last week. The Mortgage Bankers Association reports total application volume tumbled 13.1%. Refinance applications were down 15% weekly and 56% compared to a year ago. New purchase applications fell 10% weekly and 6% annually. It was the third straight week of purchase applications falling. The average 30-year rate rose to 4.06% from 4.05%. Covid Cases Plummet 90% Data from Johns Hopkins University shows the U.S. is seeing an average of 84,000 new Covid cases per day. That’s down 90% from the record high of 800,000 per day on January 15. Hospitalizations are also down sharply. The latest seven-day average shows 66,000 patients hospitalized with Covid in the U.S., down from 159,000 on January 20. Average daily deaths have fallen below 2,000 after peaking at 2,600 on February 1. With cases falling, many states are switching to an endemic posture on policy. New York and California, two of the strictest states on Covid policy, both allowed their indoor mask mandates to expire. The CDC is expected to update its mask guidance soon. In Case You Missed It U.S. consumer confidence slipped this month amid continued inflation pressures. The Conference Board’s consumer confidence index fell to 110.5 from January’s downwardly revised 111.1. Confidence in current economic conditions rose to 145.1 from 144.5, expectations index fell to 87.5 from 88.8. Former President Trump’s new social media app Truth Social was #1 on the Apple (AAPL) app store Tuesday. Digital World Acquisition (DWAC) shares closed 10.2% higher. DWAC is the SPAC Trump Media & Technology Group is set to merge with to go public.
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