Coffee With Greta: Short Week
Register now for tomorrow’s free trading Q&A on LinkedIn with me and Sami Abusaad! DJIA Futures: +21 (+0.1%) SPX Futures: -4 (-0.1%) NASDAQ Futures: -32 (-0.2%) Good morning friends! Futures are mostly lower as traders begin the holiday-shortened week. Let’s get right to it! September Begins The major indices are coming off a strong week as new data showed the economy slowing. The Dow rose 1.4% last week while the Nasdaq was up 3.3%, their best weekly performances since July. The S&P 500 rose 2.5%, its best week since June. But September is historically the weakest month for stocks and will include some key data ahead of the Fed’s next rate decision on September 20. CME Group’s FedWatch Tool currently shows 93% of traders expecting no rate hike at that meeting. Airbnb, Blackstone To Join S&P 500 Airbnb (ABNB) shares are rallying 5.8% ahead of the open while Blackstone (BX) shares are up 3.7% after S&P Dow Jones Indices announced the two companies will join the S&P 500. Airbnb will replace Lincoln National Corp (LNC) and Blackstone will replace Newell Brands Inc (NWL). The change is expected to take place later this month. Lincoln National and Newell will both be moved to the S&P SmallCap 600, replacing UNIQURE N.V. (QURE) and Universal Insurance Holdings (UVE) respectively. NextGen Healthcare Jumps NextGen Healthcare Inc (NXGN) shares are up 8.0% in premarket trade following a Bloomberg report a private equity firm is in talks to buy the company. Sources say Thoma Bravo could reportedly announce a deal for the health records software company as soon as this week. The talks are still ongoing and both companies did not respond to requests for comment. NextGen has a market cap of about $1.3 billion as of Friday’s close.
Continue Reading -->Coffee With Greta: Jobs Report Boost
Register now for next week’s free trading Q&A on LinkedIn with me and Sami Abusaad! DJIA Futures: +154 (+0.4%) SPX Futures: +25 (+0.5%) NASDAQ Futures: +88 (+0.6%) Good morning friends! Futures are rising as traders hope higher unemployment will keep the Fed from hiking rates further. Let’s get right to it! Unemployment Rate Rises U.S. job growth was stronger than expected in August while the unemployment rate rose unexpectedly. The Labor Department reported the U.S. economy added 187,000 jobs last month vs 170,000 expected. The unemployment rate rose to 3.8% from 3.6%, the highest since February 2022. Economists were expecting the unemployment rate to dip to 3.5% in August. Traders are hoping that will be a good sign for the Fed that the labor market is cooling. The labor force participation rate increased to 62.8%, the highest since February 2020. Average hourly earnings rose 0.2% monthly and 4.3% year over year, below estimates for 0.3% monthly and 4.4% annually. The jobs report also included downward revisions to previous months. June was revised lower by 80,000 to +105,000 and July was revised down by 30,000 to +157,000. Lululemon Beats Expectations, Boosts Outlook Lululemon (LULU) shares are up 2.4% ahead of the open after beating Q2 expectations and raising its full-year guidance. Here’s how the athletic apparel retailer’s results compared to analysts’ estimates: EPS: $2.68 vs $2.54 expected Revenue: $2.21 billion vs $2.17 billion expected Sales jumped 18% year over year with comparable sales rising 11% vs 12.1% expected. Lululemon’s gross margin during the quarter was 58.8% vs 58.5% expected. The company forecast Q3 EPS between $2.23 and $2.28 on revenue of $2.17 billion to $2.19 billion, in line with estimates. Lululemon expects full-year profits to be between $12.02 and $12.17 per share vs previous guidance of $11.74 to $11.94. The company also sees full-year sales between $9.51 billion and $9.57 billion, up from $9.44 billion to $9.51 billion previously. Dell Rallies On Earnings Beat Dell (DELL) shares are rallying 12.4% in premarket trade after sharply beating Q2 expectations on the top and bottom line. Here’s how the PC maker’s results compared to analysts’ estimates: Adjusted EPS: $1.74 vs $1.10 expected Revenue: $22.9 billion vs $20.9 billion expected Revenue was down 13% from a year ago but up 10% from Q1 and stronger than the company’s own forecast. Dell reported $3.2 billion in cash flow from operations vs analysts’ estimates for a $465 million loss. The company’s PC business, the Client Solutions Group, reported $12.9 billion in revenue vs $12.1 billion expected. That was up 8% from the first quarter. The company’s vice chairman and COO said, “With a better demand environment and strong execution, we delivered extraordinary Q2 results. We continue to focus on the most profitable segments of the market where we have a leading position.” Dell forecast fiscal Q3 adjusted EPS of $1.45 on $22.5 billion to $23.5 billion in revenue. That topped analysts’ estimates for $1.37 EPS on $21.7 billion in revenue. The company sees full-year profits of $6.30 per share on $89.5 billion to $91.5 billion in revenue. Analysts were forecasting full-year earnings of $5.56 per share on $86.9 billion in revenue. In Case You Missed It Shopify (SHOP) shares rallied 10.8% on Thursday after the company struck a deal with Amazon (AMZN). Shopify will offer Amazon’s “Buy with Prime” program to merchants on the site. This will allow merchants to add the Prime logo and offer Amazon’s quick delivery service options on their Shopify storefronts. Members of Amazon Prime will be able to checkout on Shopify sites using their Amazon accounts. AMZN shares close 2.2% higher on the news.
Continue Reading -->Coffee With Greta: Closing August
Register now for next week’s free trading Q&A on LinkedIn with me and Sami Abusaad! DJIA Futures: +154 (+0.4%) SPX Futures: +8 (+0.2%) NASDAQ Futures: -1 (-0.01%) Good morning friends! Futures are mostly higher as traders digest new economic data. Let’s get right to it! PCE Inflation Ticks Higher, As Expected The Fed’s preferred inflation gauge rose as expected in July. The Bureau of Economic Analysis’ PCE price index rose 0.2% monthly and 3.3% annually. That was in line with economists’ estimates but higher than the 3% annual rate in June. The core PCE price index rose 0.2% monthly and 4.2% year over year. That was also in line with economists’ expectations but a tick higher from the 4.1% annual rate in June. Prices for services rose 0.4% last month while goods price fell 0.3%. Food prices were up 0.3% and energy prices rose 0.1%. The report also showed consumer spending was stronger than expected. Personal spending rose 0.8% monthly vs 0.7% expected and up from 0.5% in June. But income growth pulled back slightly. Personal incomes rose 0.2% monthly in July vs 0.3% expected and 0.3% in June. Weekly Jobless Claims Hit 4-Week Low Weekly jobless claims fell unexpectedly last week. The Labor Department reported 228,000 Americans filed initial claims for unemployment benefits. That was down by 4,000 from the previous week and lower than 235,000 expected. It was the lowest level of claims since the week ended July 29. The previous week was also revised higher to 232,000 vs 230,000 previously. Continuing claims rose by 28,000 to 1.73 million in the week ending August 19. Dollar General Tumbles On Earnings Miss Dollar General (DG) shares are tumbling 16.2% ahead of the open after missing Q2 expectations. Here’s how the discount retailer’s results compared to analysts’ estimates: EPS: $2.13 vs $2.47 expected Revenue: $9.80 billion vs $9.93 billion expected Same-store sales decreased 0.1% from Q1 as customer traffic slowed. The CEO said, “While we are not satisfied with our overall financial results, we made significant progress in the second quarter improving execution in our supply chain and our stores, as well as reducing our inventory growth rate and further strengthening our price position.” But Dollar General slashed its full-year outlook after the miss. The company now sees net sales growth between 1.3% and 3.3% this year compared to 3.3% to 5% previously. Dollar General also expects full-year earnings to decline between 34% and 22% compared to previous guidance for an 8% drop to flat growth. Salesforce Jumps After Earnings Beat, Strong Guidance Salesforce (CRM) shares are up 6.5% in premarket trade after beating Q2 expectations on the top and bottom line. Here’s how the software company’s results compared to analysts’ estimates: Adjusted EPS: $2.12 vs $1.90 expected Revenue: $8.60 billion vs $8.53 billion expected Revenue increased 11% year over year. Salesforce forecast Q3 adjusted EPS between $2.05 and $2.06 on revenue between $8.7 billion and $8.72 billion vs $1.83 EPS and $8.66 billion in revenue expected. The company also hiked its full-year outlook, now expecting adjusted EPS between $8.04 and $8.06 on $34.7 billion to $34.8 billion in revenue. That implies 11% revenue growth and topped expectations for adjusted EPS of $7.45 on $34.65 billion in revenue. In Case You Missed It Pending home sales rose unexpectedly in July. The National Association of Realtors reported the number of purchase contracts signed last month rose 0.9% vs expectations for a 0.5% decrease. Transactions were still down 14% year over year. These pending sales are expected to close 30 to 60 days after the contract is signed.
Continue Reading -->Coffee With Greta: Slowing Private Job Growth
Register now for today’s free pro trader Q&A on LinkedIn with me and T3 Trading Group’s Patrick Hawe! DJIA Futures: +31 (+0.1%) SPX Futures: +3 (+0.1% NASDAQ Futures: +11 (+0.1%) Good morning friends! Futures are slightly higher as traders look to extend the 3-day winning streak. Let’s get right to it! Private Job Growth Slows Private job growth slowed more than expected in August. Payroll firm ADP reported the U.S. private sector add 177,000 jobs vs 200,000 expected. That was a sharp slowdown from the revised 371,000 in July. ADP’s chief economist said, “This month’s numbers are consistent with the pace of job creation before the pandemic. After two years of exceptional gains tied to the recovery, we’re moving toward more sustainable growth in pay and employment as the economic effects of the pandemic recede.” This data is good news for the Fed’s efforts against inflation and comes ahead of the official Labor Department jobs report on Friday. That’s expected to show the economy added 170,000 jobs with the unemployment rate slipping to 3.5%. Q2 GDP Revised Lower Second-quarter economic growth was unexpectedly revised lower. The Commerce Department’s second estimate shows GDP grew at a 2.1% annual rate last quarter vs the first estimate of 2.4%. Economists were expecting the second estimate to be unchanged from the first. Nonresidential fixed investment and inventory investment were both lower than originally estimated, which contributed to the revision lower. HP Tumbles After Mixed Results HP Inc (HPQ) shares are dropping 8.2% ahead of the open after reporting mixed fiscal Q3 results. Here’s how the computing giant’s results compared to analysts’ estimates: Adjusted EPS: $0.86, as expected Revenue: $13.2 billion vs $13.4 billion expected Revenue was down 10% year over year and this was the third straight quarter HP has missed analysts’ revenue estimates. The company also issued cautious guidance for fiscal Q4. HP expected adjusted EPS between $0.85 and $0.97 next quarter vs analysts’ estimates for $0.95. The CEO said, “While we expect another quarter of sequential growth in [the fourth quarter], the external environment has not improved as quickly as anticipated and we are moderating our expectations as a result.” In Case You Missed It The Labor Department’s Job Openings and Labor Turnover Survey came in lighter than expected on Tuesday. The survey showed there were 8.82 million available jobs in July vs 9.46 million expected. That was down from 9.16 million in June and is good news for the Fed’s fight against inflation. Consumer confidence pulled back way more than expected this month as Americans remain worried about high inflation. The Conference Board’s consumer confidence index tumbled nearly 8 points to 106.1 vs 116 expected. Confidence in current economic conditions plunged more than 38 points to 114.8. The six-month expectations index dropped nearly 8 points to 80.2.
Continue Reading -->Coffee With Greta: Waiting On Data
Register now for tomorrow’s free pro trader Q&A on LinkedIn with me and T3 Trading Group’s Patrick Hawe! DJIA Futures: -27 (-0.1%) SPX Futures: -2 (-0.1%) NASDAQ Futures: -17 (-0.1%) Good morning friends! Futures are flat but lower as traders await key economic data later today. Let’s get right to it! Best Buy Beats Expectations, Lowers Outlook Best Buy Inc (BBY) shares are up 2.7% ahead of the open after beating Q2 expectations on the top and bottom line. Here’s how the consumer electronics retailer’s results compared to analysts’ estimates: Adjusted EPS: $1.22 vs $1.06 expected Revenue: $9.58 billion vs $9.52 billion expected Comparable sales fell 6.2% year over year while online sales dropped 7.1%. The CEO said Best Buy expects this year to be the “low point in tech demand” before sales bounce back next year. The company forecast full-year revenue between $43.8 billion and $44.5 billion vs $43.8 billion to $45.2 billion previously. Best Buy expects comparable sales to decline 4.5% to 6% this year vs 3% to 6% previously. Big Lots Surges Big Lots (BIG) shares are surging 14.3% in premarket trade after reporting a narrower than expected Q2 loss. Here’s how the retailer’s results compared to analysts’ estimates: Adjusted loss per share: $3.24 vs $4.11 expected Revenue: $1.14 billion vs $1.1 billion expected Big Lots did not provide a Q3 earnings forecast but said it expects comparable store sales to decline in the low-teen range. The company said that would be “modestly improved” from Q2. The retailer then expects comparable store sales to improve further in Q4. Big Lots’ CEO said, “Our core lower-income customer remains under significant pressure and has limited capacity for higher-ticket discretionary purchases. However, we did see some sequential improvement in the quarter, and were pleased to come in ahead of or in line with our guidance on all key metrics.” Nio’s Q2 Loss Widens Nio (NIO) shares are dropping 6.3% ahead of the open after reporting a widening loss in the second quarter and missing expectations. Here’s how the Chinese electric vehicle makers results compared to analysts’ estimates: Adjusted loss per share: 3.28 yuan vs 2.45 yuan expected Revenue: 8.77 billion yuan vs 9.25 billion yuan expected That loss was more than twice the loss Nio reported a year ago. The company’s gross margin on vehicles rose to 6.2% from 5.1% in Q1 but down from 16.7% a year ago. Nio delivered just 23,520 vehicles in Q2 as it sold down the last of its outgoing models. Since then the company has launched two new models and delivered 20,462 vehicles in July alone. The CEO said, “We expect a solid growth in vehicle deliveries in the second half of 2023.” The company forecast Q3 deliveries between 55,000 and 57,000 vehicles. Coming Up: JOLTS, Consumer Confidence The first piece of this week’s important labor market data is set to be released today. The Labor Department releases its July Job Openings and Labor Turnover Survey (JOLTS) at 10:00 a.m. ET. That report is expected to show the number of available jobs fell to 9.5 million in July from 9.58 million in June. The Conference Board also releases its August consumer confidence index at 10:00 a.m. That survey is expected to slip to 116 from 117 in July.
Continue Reading -->Coffee With Greta: Final Week Of August
Register now for Wednesday’s free pro trader Q&A on LinkedIn with me and T3 Trading Group’s Patrick Hawe! DJIA Futures: +151 (+0.4%) SPX Futures: +19 (+0.4%) NASDAQ Futures: +84 (+0.6%) Good morning friends! Futures are higher as traders gear up for the final week of August. Let’s get right to it! Chinese EV Maker Xpeng Rallies Xpeng Inc (XPEV) shares are up 6.3% ahead of the open after announcing it is buying Chinese ride-hailing company Didi’s smart electric car development business. Xpeng’s shares in Hong Kong jumped 10.9% following the announcement. The deal is an all-stock transaction worth $744 million and Didi will become a strategic shareholder of Xpeng. Xpeng said it plans to develop a new electric car to target the 150,000 yuan ($20,580) price range. The company’s current cars sell for around 200,000 yuan or more. The new car will be part of a new brand under the project name “MONA”. 3M Settles Earplug Lawsuits 3M (MMM) shares are rising 5.6% in premarket trade following a Bloomberg report the company has tentatively agreed to settle over 300,000 lawsuits over its earplugs. The company is expected to pay out more than $5.5 billion over five years under the settlement. 3M’s board of directors still needs to approve the agreement. The suits claim the company sold the U.S. military defective combat earplugs. A 3M representative could not confirm the report, telling Bloomberg the company does not comment on rumor or speculation. Important Data Week It will be another important week of economic data for the Fed as the September 20 rate decision approaches. This week is focused on the labor market and inflation. Here’s the schedule: Tuesday: S&P Case-Shiller home price index, JOLTS, consumer confidence Wednesday: ADP private employment report, Q2 GDP revision, pending home sales Thursday: Weekly jobless claims, PCE price index, core PCE price index, personal income, personal spending Friday: August jobs report, unemployment rate, hourly wages, ISM manufacturing PMI, construction spending CME Group’s FedWatch Tool still shows 80.5% of traders expecting no rate hike at the September meeting, even after the Fed Chair’s Jackson Hole speech on Friday. In that speech, Powell said inflation “remains too high” and, “We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective.”
Continue Reading -->Coffee With Greta: Waiting For Powell
Register now for next week’s free pro trader Q&A on LinkedIn with me and T3 Trading Group’s Patrick Hawe! DJIA Futures: +169 (+0.5%) SPX Futures: +19 (+0.4%) NASDAQ Futures: +50 (+0.3%) Good morning friends! Futures are rising as traders await the Fed Chair’s speech at Jackson Hole. Let’s get right to it! Jackson Hole Fed Chair Jerome Powell is set to deliver the opening speech at the bank’s Jackson Hole Symposium today. The market is closely watching this speech for clues about the Fed’s future plans for interest rates. In his speech last year, Powell warned economic “pain” was ahead for U.S. households as the bank continued to tighten. His speech will begin just after 10:00 a.m. ET. Nordstrom Slips Nordstrom (JNW) shares are down 1.3% ahead of the open after beating Q2 expectations but maintaining its full-year outlook. Here’s how the department store’s results compared to analysts’ estimates: EPS: $0.84 vs $0.44 expected Revenue: $3.77 billion vs $3.65 billion expected Total revenue dropped 8% year over year with digital sales tumbling 13%. But the CEO said Nordstrom Rack sales have been on “a steady upward trajectory throughout this year.” Nordstrom still expects revenue to fall between 4% and 6% this fiscal year with adjusted EPS between $1.80 and $2.20. Gap Rises After Mixed Results Gap Inc (GPS) shares are rising 1.7% in premarket trade after reporting mixed Q2 results. Here’s how the clothing retailer’s results compared to analysts’ estimates: Adjusted EPS: $0.34 vs $0.09 expected Revenue: $3.55 billion vs $3.57 billion expected Gap’s total sales dropped 8% year over year with same-store sales falling 6% vs a 4.4% decline expected. Gap’s namesake sales fell 14%, Banana Republic sales were down 11%, Old Navy sales declined 6%, and Athleta sales fell 1%. The company expects Q3 net sales to decrease year over year in the low double-digit range vs analysts’ expectations for a 6.8% decline. Affirm Pops On Earnings Beat Affirm (AFRM) shares are up 6.1% ahead of the open after beating fiscal Q4 expectations. Here’s how the buy-now pay-later company’s results compared to analysts’ estimates: Loss per share: $0.69 vs $0.85 expected Revenue: $446 million vs $406 million expected Revenue jumped 22% year over year. Affirm’s funding capacity increased by $300 million from the previous quarter and the company said the share of credit overdue by 30 days fell by 0.3% to 2.3%. The company forecast fiscal Q1 revenue between $430 million and $455 million. AMC Braces For Stock Conversion AMC Entertainment (AMC) shares are up 0.8% in premarket trade ahead of the anticipated stock conversion at the open. The gains come after AMC tumbled 26.7% on Thursday. The company’s preferred equity units or APE shares are set to be converted into common stock at the open. AMC is also planning a 10-to-1 reverse stock split next week. After the conversion and split, the company’s authorized share count will increase to 550 million from 52.5 million.
Continue Reading -->Coffee With Greta: Another NVDA Blowout
Register now for next week’s free pro trader Q&A on LinkedIn with me and T3 Trading Group’s Patrick Hawe! DJIA Futures: -31 (-0.1%) SPX Futures: +22 (+0.5%) NASDAQ Futures: +155 (+1.0%) Good morning friends! Futures are mixed with tech stocks rising after Nvidia’s blowout earnings report. Let’s get right to it! Nvidia Blows Out Expectations Nvidia (NVDA) shares are rallying 6.3% ahead of the open after crushing Q2 expectations and issuing blowout guidance. Here’s how the chipmaker’s results compared to analysts’ estimates: Adjusted EPS: $2.70 vs $2.09 expected Revenue: $13.51 billion vs $11.22 billion expected Revenue doubled from a year ago and surged 88% from Q1. Nvidia cited strong demand for AI chips for that growth. The CEO said, “The world has something along the lines of about a trillion dollars worth of data centers installed, in the cloud, enterprise and otherwise. That trillion dollars of data centers is in the process of transitioning into accelerated computing and generative AI.” The CFO said Nvidia would not be immediately impacted by the Biden administration’s proposed chip export restrictions. The chipmaker forecast Q3 revenue of $16 billion, beating expectations for $12.61 billion and implying 170% year over year growth. The beat is boosting other stocks across the sector with the VanEck Semiconductor ETF (SMH) up 2.6%. Dollar Tree Slips On Weak Guidance Dollar Tree (DLTR) shares are falling 7.0% in premarket trade after beating Q2 sales expectations but issuing weak guidance. Here’s how the discount retailer’s results compared to analysts’ estimates: EPS: $0.91 vs $0.87 expected Revenue: $7.32 billion vs $7.2 billion expected Dollar Tree said its expects between $0.94 and $1.04 in Q3 EPS, missing analysts’ expectations for $1.27. The company also lowered its full-year EPS forecast to between $5.78 and $6.18 vs $5.73 to $6.13 previously. Boeing Finds New 737 Max Defect Boeing (BA) shares are dropping 2.6% ahead of the open after revealing a new manufacturing defect with the 737 Max. The plane maker said the fastener holes on the after pressure bulkhead on some 737 planes were improperly drilled. The issue is not related to flight safety but will delay the delivery of dozens of 737 Max planes. Boeing said, “This issue will impact near-term 737 deliveries as we conduct inspections to determine the number of airplanes affected, and complete required rework on those airplanes.” Spirit AeroSystems (SPR), which manufactures the Max fuselage, said only some units are affected because it “uses multiple suppliers for the aft pressure bulkhead.” Spirit AeroSystems said, “We are working closely with our customer to address any impacted units within the production system and address any needed rework. Based upon what we know now, we believe there will not be a material impact to our delivery range for the year related to this issue.” Weekly Jobless Claims Drop Weekly jobless claims fell more than expected last week in the latest sign of strength in the labor market. The Labor Department reported 230,000 Americans filed initial claims for unemployment benefits last week. That was down by 10,000 from the week before and lower than 240,000 expected. Continuing claims fell by 9,000 to 1.70 million in the week ending August 12. In Case You Missed It New home sales jumped more than expected in July as buyers continue turning to new builds amid a shortage of existing homes for sale. The Census Bureau reported new sales rose 4.4% monthly to a seasonally adjusted annual rate of 714,000 vs 704,000 expected. New home sales surged 31.5% year over year to the highest level since February 2022.
Continue Reading -->Coffee With Greta: Waiting For NVDA
Register now for today’s free pro trader Q&A on LinkedIn with me and T3 Trading Group’s Josh Lefler! DJIA Futures: +35 (+0.1%) SPX Futures: +7 (+0.2%) NASDAQ Futures: +39 (+0.3%) Good morning friends! Futures are rising as traders digest the latest batch of retail earnings and look ahead to Nvidia’s (NVDA) earnings this afternoon. Let’s get right to it! Foot Locker Plummets Foot Locker (FL) shares are plummeting 30.1% ahead of the open after missing Q2 sales expectations and slashing its outlook for the second time this year. Here’s how the sneaker giant’s results compared to analysts’ estimates: Adjusted EPS: $0.04 as expected Revenue: $1.86 billion vs $1.88 billion expected Sales dropped 9.9% year over year as consumers pull back on discretionary spending. Foot Locker now expects full-year sales to drop between 8% and 9% vs its previous forecast for a 6.5% to 8% decline. The company sees same-store sales falling 9% to 10% vs 7.5% to 9% in previous guidance. Foot Locker also cut its full-year adjusted earnings guidance to between $1.30 to $1.50 per share vs $2.00 to $2.25 previously. Abercrombie Surges Abercrombie & Fitch (ANF) shares are rallying 16.4% in premarket trade after crushing Q2 expectations and hiking its outlook. Here’s how the retailer’s results compared to analysts’ estimates: EPS: $1.10 vs $0.17 expected Revenue: $935.3 million vs $842.4 million expected Comparable sales jumped 13% year over year with Abercrombie’s namesake brand sales up 23% and Hollister sales rising 5%. Inventory dropped 30% year over year as the company better-managed orders based on demand. Abercrombie now expects net sales to rise 10% this fiscal year, up from its previous outlook for 2% to 4% growth. The company also expects operating margins to improve to between 8% to 9% vs prior expectations of 5% to 6%. Kohl’s Earnings Beat Kohl’s (KSS) shares are up 1.1% ahead of the open after beating Q2 profit expectations. Here’s how the retailer’s results compared to analysts’ estimates: Adjusted EPS: $0.52 vs $0.22 expected Revenue: $3.68 billion vs $3.69 billion expected Revenue was down 4.8% year over year and Kohl’s maintained its full-year outlook. The CEO said, “Our second-quarter earnings were in line with our expectations. We maintained strong sales momentum in Sephora at Kohl’s, reduced inventory by 14%, and managed expenses tightly.” Peloton Plunges Peloton (PTON) shares are plunging 29.3% in premarket trade after reporting a wider than expected fiscal Q4 loss. Here’s how the exercise equipment maker’s results compared to analysts’ estimates: Loss per share: $0.68 vs $0.38 expected Revenue: $642.1 million vs $639.9 million expected Peloton blamed the loss on the massive recall of its Bike seat post and seasonal changes in demand. The company had 3.08 million subscribers at the end of the quarter, up 4% from a year ago but down by 29,000 from the previous quarter. The CEO said, “Peloton’s FYQ4 performance is a reminder we operate a seasonal business.” Mortgage Demand Hits 28-Year Low Mortgage demand dropped last week as rates hit the highest level in 23 years. The Mortgage Bankers Association reported total application fell 4.2% last week. The average 30-year fixed contract rate rose to 7.31% from 7.16%. Purchase applications dropped 5% weekly and 30% year over year. That put buyer demand at the lowest level since December 1995. Amid high rates, the adjustable-rate mortgage share of applications jumped to 7.6%, the highest level in 5 months. ARM applications rose 4% weekly. Refinance applications fell 3% weekly and 35% annually. Mortgage rates have continued to climb this week with Mortgage News Daily showing the current rate at 7.49%. In Case You Missed It Existing home sales fell more than expected in July. The National Association of Realtors reported existing sales dropped 2.2% to a seasonally adjusted annual rate of 4.07 million units. That was lower than economists’ expectations for 4.15 million. Sales were down 16.6% year over year and it was the slowest sales pace since July 2010. Supply remained tight amid high mortgage rates. There were 1.11 million homes for sale at the end of July, representing a 3.3-month supply. That was down 14.6% from a year ago and the lowest level since 1999. The median price of a home sold in July rose 1.9% year over year to $406,700.
Continue Reading -->Coffee With Greta: Tech Bounce
Register now for tomorrow’s free pro trader Q&A on LinkedIn with me and T3 Trading Group’s Josh Lefler! DJIA Futures: +66 (+0.2%) SPX Futures: +21 (+0.5%) NASDAQ Futures: +108 (+0.7%) Good morning friends! Futures are rising as tech stocks continue to rally. Let’s get right to it! More Bank Downgrades Several banks were downgraded by S&P Global late Monday night. Trading in both the Financial Select Sector SPDR ETF (XLF) and SPDR S&P Regional Banking ETF (KRE) is halted premarket. S&P Global downgraded Associated Banc-Corp (ASB) and Valley National Bancorp (VLY) on funding risks and a higher reliance on brokered deposits. The agency also cute the ratings of UMB Financial Corp (UMBF), Comerica Bank (CMA), and Keycorp (KEY), citing large deposit outflows and prevailing higher interest rates. S&P Global warned that funding risks and weaker profitability will likely test the banking sector’s credit strength. This move comes after Moody’s downgraded 10 banks earlier this month and placed six large banks on review for potential downgrades. Lowe’s Tops Q2 Earnings Estimates Lowe’s (LOW) shares are up 2.8% ahead of the open after beating Q2 profit expectations. Here’s how the home improvement retailer’s results compared to analysts’ estimates: EPS: $4.56 vs $4.49 expected Revenue: $24.96 billion vs $24.99 billion expected Comparable sales decreased 1.6% year over year, better than expectations for a 2.6% decline. Lowe’s maintained its full-year forecast for adjusted EPS between $13.20 and $13.60 on sales between $87 billion and $89 billion. The company expects comparable sales to drop between 2% and 4% this fiscal year. Macy’s Earnings Beat Macy’s (M) shares are falling 4.1% in premarket trade after beating Q2 expectations but reiterating its cautious outlook. Here’s how the department store’s results compared to analysts’ estimates: Adjusted EPS: $.026 vs $0.13 expected Revenue: $5.13 billion vs $5.09 billion expected Comparable sales dropped 7.3% year over year, worse than expectations for a 6.5% decline. Sales at stores were down 8% while digital sales dropped 10%. The retailer reiterated its lower forecast from early June. The company expects full-year comparable sales to fall 6% to 7.5%, adjusted EPS between $2.70 and $3.20, and revenue of $22.8 billion to $23.2 billion. Dick’s Sporting Goods Slashes Outlook Dick’s Sporting Goods (DKS) shares are plunging 20.2% ahead of the open after missing Q2 expectations and slashing its outlook. Here’s how the sporting goods retailer’s results compared to analysts’ estimates: EPS: $2.82 vs $3.81 expected Revenue: $3.22 billion vs $3.24 billion expected Profits tumbled 23% year over year while sales rose slightly. The CEO blamed that profit miss on “shrink”, an industry term that refers to theft. She said, “Our Q2 profitability was short of our expectations due in large part to the impact of elevated inventory shrink, an increasingly serious issue impacting many retailers.” Dick’s now expects full-year EPS between $11.33 and $12.13 vs $12.90 to $13.80 previously. The company reaffirmed its comparable store sales forecast of flat to up 2%.
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