Coffee With Greta: Earnings Rush, Fed Day
Register now for next week’s free Q&A on LinkedIn with ProDesk’s Derrick Oldensmith! DJIA Futures: -77 (-0.2%) SPX Futures: -8 (-0.2%) NASDAQ Futures: -41 (-0.3%) Good morning friends! Futures are pulling back as traders digest a rush of earnings reports and gear up for the Fed decision later today. Let’s get right to it! Alphabet Pops Alphabet (GOOGL) shares are up 6.5% ahead of the open after beating Q2 expectations on the top and bottom line. Here’s how the tech giant’s results compared to analysts’ estimates: Adjusted EPS: $1.44 vs $1.34 expected Revenue: $74.6 billion vs $72.82 billion expected YouTube ad revenue: $7.67 billion vs $7.43 billion expected Google Cloud revenue: $8.03 billion vs $7.87 billion expected Revenue was up 7% year over year, the fourth straight quarter of growth in the single digits amid a pullback in digital ad spending. Ad revenue rose just 3.3% from a year ago while Cloud revenue led the gains, up 28% annually. Microsoft Drops Microsoft (MSFT) shares are falling 3.4% in premarket trade after missing fiscal Q4 revenue expectations and issuing weak guidance. Here’s how the tech giant’s results compared to analysts’ estimates: EPS: $2.69 vs $2.55 expected Revenue: $56.19 billion vs $55.47 billion expected Revenue rose 8% year over year, the third straight quarter of single-digit growth for the first time since 2017. Microsoft’s Intelligent Cloud segment brought in $23.99 billion in revenue vs $23.79 billion expected, up 15% annually. Azure revenue jumped 26% year over year vs 25% growth expected. Microsoft’s CFO forecast fiscal Q1 revenue between $53.8 billion and $54.8 billion, implying 8% growth and missing expectations for $54.94 billion. Snap Tumbles Snap (SNAP) are tumbling 17.1% ahead of the open as a weak forecast overshadows better-than-expected Q2 results. Here’s how the social media giant’s results compared to analysts’ estimates: Loss per share: $0.02 vs $0.04 expected Revenue: $1.07 billion vs $1.05 billion expected Global Daily Active Users: 397 million vs 394.9 million expected Average revenue per user: $2.69 vs $2.68 expected Revenue was down 4% year over year, the second consecutive quarter of declining sales. Snap forecast Q3 revenue between $1.07 billion and $1.13 billion, which implies -5% to flat year over year growth. The company expects daily active users to reach between 405 million and 406 million in the current quarter. Analysts were projecting Q3 revenue of $1.13 billion and 406 million daily active users. Coca-Cola Jumps Coca-Cola (KO) shares are up 1.2% in premarket trade after beating Q2 expectations and hiking its full-year outlook. Here’s how the beverage giant’s results compared to analysts’ estimates: Adjusted EPS: $0.78 vs $0.72 expected Revenue: $11.97 billion vs $11.75 billion expected Organic revenue jumped 11% year over year as customers paid higher prices. For the full year, Coke now expects comparable EPS growth of 5% to 6% vs 4% to 5% previously. The company also expects organic revenue growth of 8% to 9% vs 7% to 8% previously. Boeing Beats Boeing (BA) shares are 3.2% higher ahead of the open after beating Q2 expectations on the top and bottom line. Here’s how the planemaker’s results compared to analysts’ estimates: Adjusted loss per share: $0.82 vs $0.88 expected Revenue: $19.75 billion vs $18.45 billion expected Boeing’s revenue was up 18% year over year as the company delivered 136 planes in Q2, up from 121 a year ago. The company also announced it is increasing production of its Max aircraft, to a pace of 38 jets per month from 31 previously. Boeing said it increased output of its 787 Dreamliner to four per month and still plans to increase that to five per month by the end of the year. The CEO said, “With demand strong across our key markets, it is important that we stay focused on execution and on driving stability in our factories and supply chain to ensure we meet our customer commitments.” Boeing reiterated its full-year guidance following the beat. Fed Decision Day The Federal Reserve releases its latest interest rate decision at 2:00 p.m. ET. CME Group’s FedWatch Tool shows 98.9% of traders betting on another 25 basis point rate hike. That would be the 11th increase since March 2022. Focus will be on the Fed Chair’s press conference after the meeting to gauge whether this will be the last rate hike. A 25bps move would put the Federal Funds Rate in a range of 5.25% to 5.5%, the highest level since January 2001. In Case You Missed It Consumer confidence rose to a two-year high this month. The Conference Board’s consumer confidence index rose 6.9 points to 117 vs 112 expected. Confidence about current economic conditions rose 4.7 points to 160, the highest reading since March 2020. The 6-month expectations index jumped 8.3 points to 88.3. The expectations index is now solidly above the 80 threshold that is said to signal a recession ahead.
Continue Reading -->Coffee With Greta: Waiting For MSFT, GOOGL
Register now for today’s free Q&A on LinkedIn with pro trader and podcast host Ben Cahn! DJIA Futures: -11 (-0.03%) SPX Futures: +1 (+0.01%) NASDAQ Futures: +43 (+0.3%) Good morning friends! Futures are mixed as traders await big tech earnings later today and digest the latest results reported this morning. Let’s get right to it! General Motors Hikes Guidance General Motors (GM) shares are flat ahead of the open after beating Q2 estimates and hiking its guidance. Here’s how the automaker’s results compared to analysts’ estimates: Adjusted EPS: $1.91 (not comparable to estimates) Revenue: $44.75 billion vs $42.64 billion expected GM’s net income jumped nearly 52% year over year while revenue rose 25%. The company now expects full-year adjusted earnings between $12 billion and $14 billion vs $11 billion to $13 billion previously. GM also hiked its forecast for adjusted automotive free cash flow to between $7 billion and $9 billion, up from $5.5 billion to $7.5 billion previously. That higher guidance is contingent on GM negotiating new labor agreements with the United Auto Workers and the Canadian Unifor unions without a strike. CEO Mary Barra said, “We have a long history of negotiating fair contracts with both unions that reward our employees and support the long-term success of our business. Our goal this time will be no different. That’s the best possible outcome for all our key stakeholders, including our team, plant communities, dealers, suppliers and investors.” Spotify Drops After Revenue Miss, Weak Guidance Spotify (SPOT) shares are falling 5.6% in premarket trade after missing Q2 revenue expectations and issuing weak guidance. Here’s how the music streaming company’s results compared to analysts’ estimates: Loss per share: 1.55 euros (not comparable) Revenue: 3.18 billion euros vs 3.21 billion euros expected Spotify reported 551 million monthly active users last quarter, up 27% year over year. The company had 220 million paid subscribers during Q2, up 17% from a year ago. Spotify forecast 3.3 billion euros in Q3 revenue vs analysts’ expectations for 3.4 billion euros. The report comes after the company announced price increases for its premium subscription plans on Monday. Premium Individual and Family plans will increase by $1 while Duo plans will go up by $2. Spotify said the market landscape has “continued to evolve” and these changes will help the company “continue to deliver value to fans and artists”. 3M Jumps On Earnings Beat 3M (MMM) shares are up 3.1% ahead of the open after beating Q2 expectations. Here’s how the manufacturing giant’s results compared to analysts’ estimates: Adjusted EPS: $2.17 vs $1.73 expected Revenue: $8 billion vs $7.9 billion expected The company also hiked its full-year outlook, now expected EPS between $8.50 and $9.10 vs $8.50 to $9 previously. That was in line with analysts’ projections for $8.61. General Electric Pops After Earnings Beat, Higher Guidance General Electric (GE) shares are rising 3.8% in premarket trade after crushing Q2 expectations on the top and bottom line. Here’s how the company’s results compared to analysts’ estimates: Adjusted EPS: $0.68 vs $0.46 expected Revenue: $15.9 billion vs $14.8 billion expected Aerospace orders rose 37% year over year, while sales were up 28%. Gas power orders rose 7% annually, sales were flat, and profits jumped 18%. GE’s wind power business reported a record $8.3 billion in new orders, up from $3.1 billion last year. The company now expects full-year EPS between $2.10 and $2.30 vs $1.70 to $2 previously. GE also expects to generate roughly $4.3 billion in free cash flow vs previous guidance for $3.9 billion. In Case You Missed It The U.S. economy grew at the slowest pace in 5 months in July. The S&P Global flash services PMI fell to 52.4 this month vs 54.0 expected. That was the lowest reading since February. The manufacturing PMI rose to 49 vs 46.7 expected, but remains in negative territory.
Continue Reading -->Coffee With Greta: Earnings + Fed In Focus
Register now for tomorrow’s free Q&A on LinkedIn with pro trader and podcast host Ben Cahn! DJIA Futures: +22 (+0.1%) SPX Futures: +6 (+0.1%) NASDAQ Futures: +27 (+0.2%) Good morning friends! Futures are higher as traders gear up for a big earnings week and the upcoming Fed rate decision. Let’s get right to it! AMC Rallies After Big Weekend, Judge’s Ruling AMC Entertainment (AMC) shares are surging 36.1% ahead of the open after a monster opening weekend for Barbie and Oppenheimer. The two movies generated a combined estimate of $235.5 million in ticket sales this weekend. Barbie accounted for $155 million of that total, making it the highest opening of the year. Oppenheimer garnered an estimated $80.5 million during its debut. The success of the Barbie movie is also boosting Mattel (MAT) and Warner Bros (WBD) shares with those stocks up 2.2% and 1.6% respectively ahead of the open. The AMC rally also comes after a judge blocked AMC’s proposed settlement for a stock conversion plan that would allow the company to issue more shares. The judge ruled she cannot approve the settlement “as submitted,” because it would release potential claims by preferred shareholders who were not represented in the lawsuit or settlement. AMC was sued in February for allegedly rigging a shareholder vote that would allow it to convert preferred stock to common stock and issue hundreds of millions of new shares. Domino’s Reports Mixed Q2 Results Domino’s Pizza (DPZ) shares are up 1.7% in premarket trade after reporting mixed Q2 results. Here’s how the pizza chain’s results compared to analysts’ estimates: EPS: $3.08 vs $3.05 expected Revenue: $1.02 billion vs $1.07 billion expected Same-store sales in the U.S. rose just 0.1% year over year while international same-store sales jumped 3.6%. Big Earnings Week Traders are looking ahead to some major earnings later this week with big-tech names on deck. Here’s a look at the highlights: Tuesday AM: General Electric (GE), 3M (MMM), General Motors (GM), Spotify (SPOT) Tuesday PM: Microsoft (MSFT), Alphabet (GOOGL), Snap (SNAP) Wednesday AM: Coca-Cola (KO), Boeing (BA) Wednesday PM: Meta Platforms (META), Thursday AM: Southwest Airlines (LUV) Thursday PM: Intel (INTC), Ford Motor (F), Roku (ROKU) Friday AM: Exxon Mobil (XOM), Chevron (CVX), Procter & Gamble (PG)
Continue Reading -->Coffee With Greta: Mixed Week
Register now for next week’s free Q&A on LinkedIn with pro trader and podcast host Ben Cahn! DJIA Futures: +61 (+0.2%) SPX Futures: +19 (+0.4%) NASDAQ Futures: +101 (+0.7%) Good morning friends! Futures are higher as traders gear up for the final trading day of the week. Let’s get right to it! Dow Extends Win Streak The Dow Jones is on its longest winning streak since 2017. The index closed higher on Thursday for the ninth straight session, at 35,061.21. It’s the longest rally since September 2017 and also the highest closing level since March 2022. The major indices are on track to close out the week mixed. The Dow and S&P 500 are both on track to finish the week higher while the Nasdaq is on track for a weekly decline. Yields Slip Ahead of Fed Next Week Treasury yields are slipping this morning as investors turn their attention to next week’s Fed meeting. Both the 2-year yield and 10-year yield are down 4 basis points. CME Group’s FedWatch Tool shows 99.8% of traders expecting the Fed to hike rates by 25bps next Wednesday. Focus will be on the guidance for future meetings and the Fed Chair’s comments after the meeting. American Express Slides On Revenue Miss American Express (AXP) shares are down 4% ahead of the open after beating Q2 profit expectations but missing on revenue. Here’s how the company’s results compared to analysts’ estimates: EPS: $2.89 vs $2.81 expected Revenue: $15.05 billion vs $15.48 billion expected Revenue was up 12% year over year while network volumes increased 8%. American Express saw an all-time high in spending through its card products during the quarter. The CFO said, “The U.S. consumer just looks really strong” and the company hasn’t seen “any signs of weakness on travel and entertainment habits.” AmEx maintained its full-year outlook. In Case You Missed It Existing home sales dropped to the slowest pace in 14 years in June. The National Association of Realtors reported existing sales fell 3.3% to a seasonally adjusted annual rate of 4.16 million units, in line with expectations. Sales tumbled 18.9% year over year, the slowest sales pace since June 2009 as low supply squeezes buyers. There were 1.08 million homes for sale at the end of June, down 13.6% from a year ago and representing a 3.1-month supply. The median price of a home sold in June was $410,200, the second-highest on record.
Continue Reading -->Coffee With Greta: TSLA, NFLX Drag
Register now for next week’s free Q&A on LinkedIn with pro trader and podcast host Ben Cahn! DJIA Futures: +3 (+0.01%) SPX Futures: -13 (-0.3%) NASDAQ Futures: -130 (-0.8%) Good morning friends! Futures are mostly lower as tech stocks slide following earnings from giants like Tesla and Netflix. Let’s get right to it! Tesla Reports Record Revenue Tesla (TSLA) shares are falling 4.1% ahead of the open despite beating Q2 expectations on the top and bottom line. Here’s how the electric automaker’s results compared to analysts’ estimates: Adjusted EPS: $0.91 vs $0.82 expected Revenue: $24.93 billion vs $24.47 billion expected Tesla’s automotive revenue jumped 46% year over year to $21.27 billion. The company’s operating margin dropped to 9.6%, driven by increased incentives and price cuts on its vehicles. CEO Elon Musk said on the earnings call, “We continue to target 1.8 million vehicle deliveries this year, but expect Q3 production will be a little bit down because we’ve got summer shutdowns for a lot of factory upgrades.” Tesla reported Q2 deliveries earlier this month which topped expectations. Netflix Slides On Weak Outlook Netflix (NFLX) shares are down 6.1% in premarket trade after reporting mixed Q2 results. Here’s how the streaming giant’s results compared to analysts’ estimates: EPS: $3.29 vs $2.86 expected Revenue: $8.19 billion vs $8.3 billion expected Netflix added 5.9 million new subscribers during the quarter as it cracked down on password sharing in the U.S. That sharply beat expectations for 3 million net new subscribers. The company said it will now roll out that new policy to the rest of its customers. Netflix forecast Q3 revenue of $8.52 billion vs $8.67 billion expected, Q3 EPS of $3.52 vs $3.23 expected, and an addition of 4 million new subscribers. The company reiterated its full-year operating margin outlook. IBM Misses Q2 Revenue Estimates International Business Machines (IBM) shares are down 1% ahead of the open after beating Q2 profit expectations but missing on revenue. Here’s how the company’s results compared to analysts’ estimates: Adjusted EPS: $2.18 vs $2.01 expected Revenue: $15.48 billion vs $15.58 billion expected IBM reported an adjusted gross margin of 55.9% vs 54.7% expected. The CFO attributed those higher margins to a more profitable mix of products and “productivity initiatives” like job cuts. He said, “The productivity benefits free up spend for reinvestment and contribute to margin expansion.” IBM reiterated its outlook for between 3% and 5% revenue growth this year and $10.5 billion in free cash flow. United Airlines Rallies On Record Earnings United Airlines (UAL) shares are up 2.6% in premarket trade after reporting record Q2 results. Here’s how the airline’s results compared to analysts’ estimates: Adjusted EPS: $5.03 vs $4.03 expected Revenue: $14.18 billion vs $13.91 billion expected United’s fuel bill tumbled 26% year over year which helped boost the bottom line. Capacity rose 17.5% from a year ago while revenue per available seat mile slipped 0.4%. For the third quarter, the airline expects capacity to expand 16% from last year with revenue growth of 13%. United forecast adjusted Q3 EPS between $3.85 and $4.35 vs $3.70 expected. American Airlines Slips Despite Earnings Beat, Higher Outlook American Airlines (AAL) shares are falling 1.5% ahead of the open despite beating Q2 expectations on the top and bottom line. Here’s how the airline’s results compared to analysts’ estimates: Adjusted EPS: $1.92 vs $1.59 expected Revenue: $14.06 billion vs $13.74 billion expected Revenue was up 4.7% year over year while flying capacity rose 5.3%. American hiked its full-year outlook following the beat. The airline now expects adjusted EPS between $3 and $3.75 this year vs $2.50 to $3.50 previously. That forecast was in line with analysts’ estimates of $3.10 per share. Weekly Jobless Claims Tumble To Nine-Week Low Weekly jobless claims fell unexpectedly last week in the latest sign of strength for the labor market. The Labor Department reported 228,000 Americans filed initial unemployment claims. That was down by 9,000 from the week before and lower than expectations for claims to rise to 240,000. Continuing claims rose by 33,000 to 1.75 million in the week ending July 8. In Case You Missed It Apple (AAPL) shares rose on Wednesday following a Bloomberg report that the company is developing its own equivalent of ChatGPT. That report claims Apple has built a chatbot that some call “Apple GPT”. Some Apple staffers reportedly believe the company is aiming for a significant AI announcement next year.
Continue Reading -->Coffee With Greta: Earnings Anticipation
Register now for today’s free pro trader Q&A on LinkedIn with options specialist Dan Darrow! DJIA Futures: +5 (+0.01%) SPX Futures: +2 (+0.1%) NASDAQ Futures: +33 (+0.2%) Good morning friends! Futures are slightly higher as traders await key earnings later today. Let’s get right to it! Goldman Sachs Misses Profit Estimates Goldman Sachs (GS) shares are down 1.4% ahead of the open after missing Q2 profit expectations. Here’s how the investment bank’s results compared to analysts’ estimates: EPS: $3.08 vs $3.18 expected Revenue: $10.9 billion vs $10.84 billion expected Profit dropped 58% year over year due to steep declines in trading and investment banking plus losses related to commercial real estate deals. The CEO said, “This quarter reflects continued strategic execution of our goals. I remain fully confident that continued execution will enable us to deliver on our through-the-cycle return targets and create significant value for shareholders.” Fixed income trading revenue fell 26% to $2.71 billion vs $2.78 billion expected, equities trading revenue of $2.97 billion topped the $2.42 billion estimate, and investment banking fees fell 20% to $1.43 billion vs $1.49 billion expected. Carvana Reaches Debt Deal Carvana (CVNA) shares are surging 40.1% in premarket trade after announcing a debt restructuring deal. The used car retailer said the agreement will reduce its total debt outstanding by more than $1.2 billion. Carvana said the deal will eliminate over 83% of its 2025 and 2027 unsecured note maturities and lower its required cash interest expense by more than $430 million per year for the next two years. The CFO said, “This transaction significantly increases our financial flexibility by reducing our total debt, extending maturities, and lowering near-term cash interest expense as we continue to execute our plan of driving significant profitability and returning to growth.” The company also announced plans to sell up to $1 billion in shares to raise capital. Carvana reported its second-quarter results alongside the debt announcement. Here’s a look at those numbers vs analysts’ expectations: Loss per share: $0.55 vs $1.15 expected Revenue $2.97 billion vs $2.59 billion expected Carvana’s gross profit per unit jumped 94% year over year to $6,520. The CEO said, “Our strong execution has made the business fundamentally better, and combined with today’s agreement with noteholders that reduces our cash interest expense and total debt outstanding, gives us great confidence that we are on the right path to complete our three-step plan and return to growth.” Housing Starts, Building Permits Drop New home construction slowed more than expected in June. The Census Bureau reported housing starts tumbled 8% last month to a seasonally adjusted annual rate of 1.43 million units vs 1.48 million expected. Single-family starts fell 7% while multi-family starts tumbled 11.6%. The number of new permits issued was also weaker than expected. Building permits fell 3.7% in June to a seasonally adjusted annual rate of 1.44 million units vs 1.48 million expected. Single-family permits rose 2.2% while multi-family permits dropped 13.5%. Mortgage Demand Jumps Mortgage demand rose last week as lower rates boosted refinance activity. The Mortgage Bankers Association reported total application volume rose 1.1% last week. That increase was driven by refinance applications which jumped 7% weekly and were down 32% year over year. Purchase applications fell 1% weekly and were down 21% annually. The refinance share of applications rose to 28.4% vs 26.8% the previous week. In Case You Missed It Microsoft (MSFT) shares hit an all-time high Tuesday after the company announced pricing for its new AI subscription service. The stock hit a high of $366.78 and settled at a new closing high of $359.49 at the end of the day. The new Copilot subscription service adds AI to Microsoft’s Office products like Word, Excel, and Teams. The subscription will cost an additional $30 per month for Office subscribers.
Continue Reading -->Coffee With Greta: Consumer Miss
Register now for tomorrow’s free pro trader Q&A on LinkedIn with options specialist Dan Darrow! DJIA Futures: -20 (-0.1%) SPX Futures: -5 (-0.1%) NASDAQ Futures: -32 (-0.2%) Good morning friends! Futures are flat but lower as traders digest the latest economic data and more big bank earnings. Let’s get right to it! Retail Sales Disappoint Retail sales rose less than expected in June. The Commerce Department reported retail sales rose 0.2% to $689.5 billion vs expectations for a 0.5% increase. Spending rose 2% at miscellaneous retailers, 1.9% online, 1.4% at furniture stores, and 1.1% at electronics stores. Department stores saw the largest drop with spending down 2.4%, receipts fell 1.4% at gas stations, and 1% at sporting goods stores. Excluding autos, retail sales rose 0.2% vs 0.3% expected. Morgan Stanley Slips Despite Earnings Beat Morgan Stanley (MS) shares are slipping 0.2% ahead of the open despite beating Q2 expectations. Here’s how the investment bank’s results compared to analysts’ estimates: EPS: $1.24 vs $1.15 expected Revenue: $13.46 billion vs $13.08 billion expected The bank’s profit dropped 13% year over year while revenue rose 2%. Morgan Stanley’s wealth management revenue jumped 15% from a year ago to a record $6.66 billion vs $6.5 billion expected. The CEO said, “The firm delivered solid results in a challenging market environment. The quarter started with macroeconomic uncertainties and subdued client activity, but ended with a more constructive tone.” But the bank’s Wall Street division saw weaker results. Institutional securities revenue fell 8 to $5.65 billion, Equities trading revenue came in at $2.55 billion in revenue vs $2.37 billion expected, and fixed income revenue of $1.72 billion missed the $1.99 billion estimate. Bank of America Tops Q2 Expectations Bank of America (BAC) shares are down 0.8% in premarket trade despite reporting better-than-expected Q2 earnings and revenue. Here’s how the consumer bank’s results compared to analysts’ estimates: EPS: $0.88 vs $0.84 expected Revenue: $25.33 billion vs $25.05 billion expected Earnings were up 19% from a year ago while revenue rose 11%. That revenue increase was fueled by a 14% jump in net interest income. The CEO said, “We continue to see a healthy U.S. economy that is growing at a slower pace, with a resilient job market. Continued organic client growth and client activity across our businesses complemented beneficial impacts of higher interest rates.” Bank of America’s Wall Street division also helped boost revenue. Fixed income trading revenue jumped 18% to $2.8 billion vs $2.77 billion expected while equities trading slipped 2% to $1.6 billion vs $1.48 billion expected.
Continue Reading -->Coffee With Greta: Waiting For Earnings
Register now for Wednesday’s free pro trader Q&A on LinkedIn with options specialist Dan Darrow! DJIA Futures: -88 (-0.3%) SPX Futures: -6 (-0.1%) NASDAQ Futures: +1 (+0.01%) Good morning friends! Futures are mixed as a new week begins and traders look ahead to more key second-quarter earnings this week. Let’s get right to it! Ford Cuts F-150 Lightning Prices Ford (F) shares are down 0.7% ahead of the open after slashing prices on its electric F-150 Lightning pickup truck. The automaker said some of the least expensive versions of the truck would see prices fall by nearly $10,000 while the higher trim versions will fall by at least $6,000. The cuts reduce the entry-level price to about $50,000 and the extended-range Platinum trim starting price to about $92,000. Ford says the cuts come after its efforts to boost production and lower costs for battery minerals were successful. The company is also implementing factory upgrades that are expected to triple its output of the truck. Ford’s Dearborn factory where the Lightning is made will be closed for several weeks to make those upgrades. Tesla Builds First Cybertruck Tesla (TSLA) shares are rising 1.9% in premarket trade after the company successfully built its first Cybertruck. In a tweet over the weekend, the electric automaker said, “First Cybertruck built at Giga Texas!” The announcement came four years after CEO Elon Musk unveiled the prototype and two years behind schedule. Tesla was initially supposed to begin in late 2021. Musk has blamed supply chain issues for the delays. Microsoft, Sony Sign Call of Duty Deal Activision Blizzard (ATVI) shares are up 3.9% ahead of the open amid hopes Microsoft’s (MSFT) acquisition of the company will go through. This comes after Microsoft signed a binding, 10-year agreement with Sony (SONY) to keep Activision’s Call of Duty games on Playstation consoles after the acquisition. Microsoft’s Gaming CEO said, “We are pleased to announce that Microsoft and PlayStation have signed a binding agreement to keep Call of Duty on PlayStation following the acquisition of Activision Blizzard.” Regulators had previously expressed concern about Microsoft’s power over the gaming market if the acquisition was approved, with fears the company would make Activision’s games “exclusive” to its own consoles. Microsoft’s vice chair said even after the deal closes it “will remain focused on ensuring that Call of Duty remains available on more platforms and for more consumers than ever before.” Big Earnings This Week Second-quarter earnings season will pick up steam this week with some big reports set to be released. The main focus will be on Wednesday afternoon, here’s a look at what’s scheduled: Tuesday AM: Bank of America (BAC), Morgan Stanley (MS) Wednesday AM: Goldman Sachs (GS) Wednesday PM: Tesla (TSLA), Netflix (NFLX), United Airlines (UAL) Thursday AM: Johnson & Johnson (JNJ), American Airlines (AAL)
Continue Reading -->Coffee With Greta: Bank Earnings Beat
Register now for next week’s free pro trader Q&A on LinkedIn with options specialist Dan Darrow! DJIA Futures: +173 (+0.5%) SPX Futures: +7 (+0.2%) NASDAQ Futures: +4 (+0.03%) Good morning friends! Futures are higher as the second-quarter earnings season officially kicks off with big banks. Let’s get right to it! JPMorgan Tops Q2 Expectations JPMorgan Chase (JPM) shares are up 2.9% ahead of the open after beating Q2 expectations on the top and bottom line. Here’s how the largest bank in the U.S. did compared to analysts’ estimates: Adjusted EPS: $4.37 vs $4 expected Revenue: $42.4 billion vs $38.96 billion expected Net income surged 67% year over year while revenue jumped 34%. That growth was driven by higher rates with net interest income rising 44%. CEO Jamie Dimon said, “The U.S. economy continues to be resilient. Consumer balance sheets remain healthy, and consumers are spending, albeit a little more slowly. Labor markets have softened somewhat, but job growth remains strong.” Chase also reported better-than-expected trading and investment banking results. Fixed income trading revenue dipped 3% to $4.6 billion vs $4.1 billion expected. Equity trading revenue came in at $2.5 billion vs $2.41 billion expected. And investment banking revenue of $1.5 billion topped the $1.42 billion estimate. Citigroup Rises On Earnings Beat Citigroup (C) shares are rising 1.5% in premarket trade after reporting better-than-expected second-quarter results. Here’s how the investment bank’s performance compared to analysts’ estimates: EPS: $1.33 vs $1.30 expected Revenue: $19.44 billion vs $19.29 billion expected The CEO said, “Amid a challenging macroeconomic backdrop, we continued to see the benefits of our diversified business model and strong balance sheet.” Total revenue dipped 1% year over year as the markets and investment banking business weighed on results. But personal banking and wealth management revenue rose 6% from a year ago. Wells Fargo Jumps After Earnings Wells Fargo (WFC) shares are up 3.0% ahead of the open after beating Q2 expectations on the top and bottom line. Here’s how the consumer bank’s results compared to analysts’ estimates: EPS: $1.25 vs $1.16 expected Revenue: $20.53 billion vs $20.12 billion expected Higher interest rates fueled that beat as net interest income jumped 29% from a year ago. Consumer and small business banking earnings rose 19% year over year. Wells Fargo’s CEO said, “Our company remains strong and we have significant opportunities to continue to improve how we serve our customers. The U.S. economy continues to perform better than many had expected, and although there will likely be continued economic slowing and uncertainty remains, it is quite possible the range of scenarios will narrow over the next few quarters.” The bank set aside $1.7 billion in credit loss reserves, up from $1.2 billion in the first quarter. UnitedHealth Beats Earnings Estimates, Hikes Outlook UnitedHealth Group (UNH) shares are rising 2.9% in premarket trade after beating Q2 expectations and raising its outlook. Here’s how the health insurance giant’s results compared to analysts’ estimates: EPS: $6.14 vs $6.02 expected Revenue: $92.9 billion vs $90.6 billion expected UnitedHealth’s medical loss ratio rose to 83.2% from 81.5% a year ago, in-line with expectations. That number reflects the proportion of premiums paid out to cover medical expenses and a higher number means more spending on medical costs. The company now expects full-year EPS of $24.70 to $25.00 vs $24.50 to $25.00 previously. In Case You Missed It The federal budget deficit widened more than expected in June. That gap jumped to $227.76 billion last month compared to $88.8 billion in June 2022. Government receipts fell $42 billion to $418 billion while spending rose $96 billion to $646 billion. Through the first nine months of the fiscal year, the deficit was $1.39 trillion, up $515.1 billion compared to the same period last year.
Continue Reading -->Coffee With Greta: Disinflation Trend
Register now for next week’s free pro trader Q&A on LinkedIn with options specialist Dan Darrow! DJIA Futures: +70 (+0.2%) SPX Futures:+17 (+0.4%) NASDAQ Futures: +114 (+0.7%) Good morning friends! Futures are higher as more data shows the disinflationary trend continuing and Q2 earnings begin to trickle in. Let’s get right to it! Wholesale Inflation Cooler Than Expected Wholesale inflation pressures were cooler than expected in June. The Bureau of Labor Statistics’ producer price index rose 0.1% monthly and 0.1% year over year. That was better than expectations for 0.2% monthly and 0.4% annually. It was the lowest headline number since August 2020. The core PPI also cooled more than expected, rising 0.1% monthly and 2.4% annually. Economists were expecting core PPI to rise 0.2% monthly and 2.6% annually. This data is good news for consumer inflation as producer prices are a leading indicator for consumer price trends. Weekly Jobless Claims Slide Weekly jobless claims fell unexpectedly last week in another sign the labor market is maintaining strength. The Labor Department reported 237,000 Americans filed initial claims for unemployment benefits. That was down by 12,000 from the previous week and lower than expectations for claims to rise to 250,000. But continuing claims rose unexpectedly in the week ending July 1, up by 9,000 to 1.729 million vs expectations for that number to be unchanged. Delta Jumps On Record Earnings, Revenue Delta Airlines (DAL) shares are up 3.8% ahead of the open after reporting record second quarter earnings and revenue. Here’s how the airline’s results compared to analysts’ estimates: Adjusted EPS: $2.64 vs $2.40 expected Adjusted revenue: $14.61 billion vs $14.49 billion expected International travel surged during the quarter with revenue from trans-Atlantic trips up more than 60% year over year. Domestic revenue rose 8% while overall passenger revenue was up 21%. Fuel costs tumbled 22% during the quarter which boosted the company’s bottom line. Delta forecast Q3 earnings between $2.20 and $2.50 per share. The company expects capacity to increase 16% this quarter and revenue to jump as much as 14% from a year ago. Delta also hiked its full-year outlook, now expecting adjusted EPS of $6 to $7. PepsiCo Up After Earnings Beat, Higher Guidance PepsiCo (PEP) shares are rising 2.3% in premarket trade after beating Q2 expectations and hiking its full-year outlook. Here’s how the beverage maker’s results compared to analysts’ estimates: Adjusted EPS: $2.09 vs $1.96 expected Revenue: $22.32 billion vs $21.73 billion expected But sales volume dropped 3% in Pepsi’s food division and 1% in the beverage division as higher prices hurt demand. The company still raised its outlook for the second consecutive quarter. For 2023, Pepsi expects 10% organic revenue growth vs 8% previously. The company also forecast core constant currency earnings growth of 12% vs 9% previously. In Case You Missed It The Fed’s latest beige book shows economic growth continuing to slow across the country. The central bank released that report Wednesday afternoon. Five of the 12 Fed districts reported slight or modest growth, five reported flat growth, and two reported slight or modest declines. The report said labor markets are healthy with hiring more “targeting and selective”. Wage growth continued at a more moderate pace while price increases also slowed.
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