Coffee With Greta: June Kickoff
DJIA Futures: -90 (-0.3%) SPX Futures: -1 (-0.02%) NASDAQ Futures: -18 (-0.1%) Good morning friends! Futures are down as traders digest new hot jobs data and the debt ceiling deal makes progress in Congress. Let’s get right to it! House Passes Debt Ceiling Deal The bill to raise the debt ceiling is now headed to the Senate after passing in the House Wednesday night. The lower chamber approved the Fiscal Responsibility Act in a 314-117 vote. Senate leaders have set a goal of passing the bill in 48 hours. Majority Leader Chuck Schumer said, “There’s been a very good vote in the House. I hope we can move the bill quickly here in the Senate and bring it to the president’s desk as soon as possible.” The Treasury Department says it will run out of money June 5. May Private Job Growth Runs Hot The U.S. private sector added more jobs than expected in May. Payroll firm ADP reported private employers added 278,000 workers last month. That was sharply higher than expectations for just 180,000. Leisure and hospitality added 208,000, natural resources and mining gained 94,000, construction added 64,000, trade, transportation and utilities added 32,000, and other services gained 12,000. But several sectors saw declines. Manufacturing dropped by 48,000, financial activities lost 35,000, and education and health services lost 29,000. Wage gains continued to slow, with annual pay up 6.5% vs 6.7% in April. Those switching jobs saw an annual increase of 12.1%, down a full 1% from April. ADP’s chief economist said, “This is the second month we’ve seen a full percentage point decline in pay growth for job changers. Pay growth is slowing substantially, and wage-driven inflation may be less of a concern for the economy despite robust hiring.” The Labor Department’s official May jobs report will be released tomorrow and is expected to show a gain of 190,000 jobs with the unemployment rate rising to 3.5%. Weekly Jobless Claims Rise Weekly jobless claims rose less than expected last week. The Labor Department reported 232,000 Americans filed initial unemployment claims. That was up by 2,000 from the previous week and lower than 235,000 expected. Macy’s Drops After Slashing Outlook Macy’s (M) shares are falling 4.9% in premarket trade after missing fiscal Q1 revenue expectations and cutting its full-year outlook. Here’s how the retailer’s results compared to analysts’ estimates: Adjusted EPS: $0.56 vs $0.45 expected Revenue: $4.98 billion vs $5.04 billion expected Revenue dropped 7% year over year while comparable sales fell 7.2% vs 4.7% expected. Macy’s now expects full-year adjusted EPS of $2.70 to $3.20, down sharply from previous guidance for $3.67 to $4.11. The company expects full-year sales of $22.8 billion to $23.2 billion vs $23.7 billion to $24.2 billion previously. Nordstrom Rallies On Sales Beat Nordstrom (JWN) shares are up 4.6% ahead of the open after beating fiscal Q1 expectations on the top and bottom line. Here’s how the retailer’s results compared to analysts’ estimates: Adjusted loss per share: $0.07 vs $0.08 expected Revenue: $3.18 billion vs $3.12 billion expected CEO Erik Nordstrom said, “We’re encouraged by our momentum, especially given the uncertain macroeconomic environment.” Nordstrom reaffirmed its full-year outlook for revenue to fall 4% to 6% and adjusted EPS between $1.80 and $2.20. Salesforce Costs Overshadow Earnings Beat, Higher Outlook Salesforce (CRM) shares are 7.4% in premarket trade after beating fiscal Q1 expectations but reporting higher capital costs than expected. Here’s how the software company’s results compared to analysts’ estimates: Adjusted EPS: $1.69 vs $1.61 expected Revenue: $8.25 billion vs $8.18 billion expected Salesforce’s capital expenditures totaled $243 million in the quarter, up 36% year over year and higher than $205 million expected. Those cost concerns overshadowed the 11% annual increase in revenue. Salesforce expected fiscal Q2 adjusted EPS of $1.89 to $.190 and $8.51 billion to $8.53 billion in revenue. That beat analysts’ estimates for adjusted EPS of $1.70 on $8.49 billion in revenue. For the full year, Salesforce raised its earnings forecast to $7.41 to $7.43 per share on $34.5 billion to $34.7 billion in revenue. In Case You Missed It Job openings rose unexpectedly in April. The Labor Department’s job openings and labor turnover survey (JOLTS) showed there were 10.1 million available jobs in April, up from 9.8 million in March. Economists had expected openings to fall to 9.4 million. It was the highest number in 3 months as the labor market maintains strength amid the Fed’s tightening cycle.
Continue Reading -->Coffee With Greta: Waiting On A Vote
Register now for my free Q&A with David Prince today! DJIA Futures: -112 (-0.3%) SPX Futures: -20 (-0.5%) NASDAQ Futures: -67 (-0.5%) Good morning friends! Futures are slipping as traders await a vote on the debt ceiling deal in the House. Let’s get right to it! Debt Ceiling Deal Clears Key Committee The House Rules Committee advanced the debt ceiling deal reached by President Biden and House Speaker Kevin McCarthy Tuesday night. The committee approved the bill in a 7-6 vote, sending it to the full House for a vote. A floor vote on the deal is expected around 8:30 p.m. ET today. A group of 20 House Republicans came out against the bill on Tuesday but it is still expected to pass the lower chamber. The legislation would then be sent to the Senate for a vote. American Airlines Raises Profit Outlook American Airlines (AAL) shares are up 2.4% ahead of the open after hiking its Q2 profit outlook. The airline now expects adjusted EPS between $1.45 and $1.65 this quarter vs $1.20 to $1.40 previously. The higher forecast is thanks to strong travel demand and lower fuel prices. Hewlett Packard Reports Mixed Results HP Inc (HPQ) shares are down 5.7% in premarket trade after reporting mixed fiscal Q2 results. Here’s how the PC maker’s results compared to analysts’ estimates: Non-GAAP EPS: $0.80 vs $0.76 expected Revenue: $12.9 billion vs $13.1 billion expected It was HP’s lowest quarterly revenue since the April 2020 quarter. Sales in the company’s Personal Systems group, which is its PC business, dropped 29% year over year to $8.2 billion vs $8.4 billion expected. HP forecast fiscal Q3 non-GAAP EPS of $0.81 to $0.91 vs $0.85 expected. The company narrowed its full-year forecast range for non-GAAP EPS to $3.30 to $3.50 vs $3.20 to $3.60 previously. Mortgage Demand Drops to 3-Month Low Mortgage demand fell to a three-month low last week as rates shot higher. The Mortgage Bankers Association reported purchase applications dropped 3% weekly and were down 31% year over year. Refinance applications fell 7% weekly and 45% annually. The drop came as the average 30-year contract rate popped higher to 6.91% from 6.69% the previously week. In Case You Missed It Home prices rose in March as buyers continue to struggle with low inventory. The S&P CoreLogic Case-Shiller national home price index rose 0.7% in March compared to March 2022. The index also rose 0.4% monthly. The release said, “March’s results suggest that the decline in home prices that began in June 2022 may have come to an end.” The 20-city index fell 1.1% annually and rose 0.5% monthly while the 10-city index dropped 0.8% annually and rose 0.6% monthly. Consumer confidence slipped to a 6-month low in May. The Conference Board’s consumer confidence index fell to 102.3 from 103.7 in April. That was better than expectations for the index to fall to 99. Consumers are feeling less confident about the labor market. The share of respondents who viewed jobs as “plentiful” fell to the lowest level since April 2021 while those who said jobs are “hard to get” hit a six-month high.
Continue Reading -->Coffee With Greta: Debt Ceiling Agreement Reached
Register now for my free Q&A with David Prince on Wednesday! DJIA Futures: -10 (-0.03%) SPX Futures: +22 (+0.5%) NASDAQ Futures: +187 (+1.3%) Good morning friends! Futures are mostly higher after the President and House Speaker reached a tentative debt ceiling agreement. Let’s get right to it! Debt Ceiling Deal President Biden and House Speaker Kevin McCarthy reached a deal on Sunday to raise the debt ceiling. Congress is expected to vote on the bill as early as tomorrow after the Treasury Department said they have until June 5 before a default. Biden said, “The agreement prevents the worst possible crisis, a default, for the first time in our nation’s history. Takes the threat of a catastrophic default off the table.” The deal would suspend the debt ceiling until January 1, 2025 and spending caps for the next two years. In fiscal year 2024, military spending would be capped at $886 billion and nonmilitary discretionary spending at $704 billion. In fiscal year 2025, military spending would increase to $895 billion and nonmilitary discretionary spending to $711 billion. Nvidia Eyes $1 Trillion Nvidia (NVDA) shares are up 4.5% ahead of the open and on track to hit a $1 trillion market cap at the bell. To hit the $1 trillion mark NVDA shares must hold above $404.86. The stock has rocketed toward the trillion dollar club since last Wednesday when the company beat Q1 expectations and forecast huge Q2 revenue numbers. The other $1 trillion stocks include Apple (AAPL), Alphabet (GOOGL), Amazon (AMZN), and Microsoft (MSFT). Other semiconductor stocks are moving alongside NVDA this morning with the VanEck Semiconductor ETF (SMH) up 2.3%. Musk Meets China’s Foreign Minister Tesla (TSLA) shares are up 4.0% in premarket trade after CEO Elon Musk met with China’s Foreign Minister in Beijing. The meeting was reportedly meant to show China is open to foreign business while Tesla reportedly signaled plans to further expand in the country. The FM said China’s electric vehicle market “has broad prospects for development” and said the country will continue to create a better “market-oriented” and “law-based” business environment for foreign companies like Tesla. Jobs Week This will be an important week of data for the Fed as traders look ahead to the May jobs report. The Conference Board releases the May consumer confidence index at 10:00 a.m. ET today. Then the Labor Department releases its April job openings and labor turnover survey Wednesday at 10:00 a.m. while the Fed releases its Beige Book at 2:00 p.m. ADP’s private employment report for May will be out Thursday morning along with weekly jobless claims and the Q1 productivity revision. On Friday morning, the Labor Department releases the official May jobs report.
Continue Reading -->5 AI Stocks to Watch This Week
SPX futures are +22, giving upside follow through to Friday’s move above the 4160-4180 area with a close above 4200. It seems like we can reach the 4325 high from last August. But take trades along the way. We’ve had many nice setups the past few weeks because we focused on setups instead of calling tops or predicting recessions. SPY: I bought $416 calls last Thursday for a potential Friday move. It cleared $416 to see $420.70. This morning, it’s at $422+. I’d trim and trail but it seems like it can work back to the $430 area. We’ll see if today’s move builds. QQQ has led the way higher since the March ignition above the downtrend line. Last week the gap up from NVDA held and on Friday it cleared $341 to see $349.25. This morning we are at new monthly highs. I always trim when a gap like this is in my favor. I might sell some calls for this Friday as a way to hedge. Now let’s dig into some AI-related names: AI became a huge winner again. I got into a swing long in the $22 area. Last week I also put on some $30 calls that are up 300%. Make sure to manage it. We’ll see if it can hold the March high of $34.68 to build. NVDA helped add fuel to the tech rally. I made 5Xish on my call spread for earnings. Some bought vs. the post-earnings gap at $366. This morning it looks above $394.80. Congrats to long-term investors and short-term traders here. I’d trim and trail. MSFT continues to reward swing longs from the post-earnings gap of $292. it gave multiple entries since then. It hit $333.40 Friday. I’d make sure to trim some this morning because it’s a bit extended. That doesn’t mean it’s an easy short. GOOGL became a big focus for us around $105ish and it hit $126.43 last week. It has another bull flag setup. See if it clears that. Some are long vs. $119.50. Others are waiting for it to clear that pivot. SMCI has been a rock star. Lots on the VTF® did very well here. I’d trim some because it’s extended but it’s not an easy short. Scott Redler Positions Disclosure as of 2023-05-30 at 8.25.49 AM
Continue Reading -->Is There Life After Nvidia? What’s on Tap May 30 – June 2
Welcome to your weekly trading preview! Before we get started, check out:Coming Wednedsay: Inner Circle’s David Prince on Conversations With a Pro TraderSave 40% with T3’s Memorial Day SaleUse the Table of Contents to jump around: Table of Contents This Week’s Trading CalendarWeek Review: Nvidia Dominates!Jobs Data Is on the WayEarnings: Life After Nvidia?AI: The Earnings Season CrazeTraders Are in a Rotten Mood Despite the Market’s ResilienceThe Best Stocks & ETFs of 2023Factoid of the Week: Nvidia Is CHEAP?Get to Know Kira Turner This Week’s Trading CalendarIf you want to view or download this week’s calendar, check click the image below:Click to enlarge Week Review: Nvidia Dominates!You guessed it! This week was all about Nvidia’s (NVDA) shocking earnings beat and guidance, which sent tech and especially semiconductors screaming higher. The QQQ’s rose 3.4% for the week:(data as of 2:23 p.m. Friday) Year-to-date, the QQQ’s are up a ridiculous 30.7% thanks to the brutal strength in large-cap tech stocks. 17 stocks in the Nasdaq 100 (the index upon which QQQ is based on) are up more than 40% year-to-date. And year-to-date Nvidia is the #1 stock in the S&P 500, Nasdaq 100, and the SMH ETF. (more on this below In economic news, the big story was Friday’s Core PCE Index, which is the Fed’s preferred inflation indicator. The number came in hot, which had some folks worrying about early Friday morning. The worries didn’t last with stocks powering higher into the close. Now let’s look forward to next week. Jobs Data Is on the WayWe have some important US economic data reports on tap including:Tuesday: S&P/CS Home Prices, CB Consumer ConfidenceWednesday: Chicago PMI, FOMC’s Harker Speaks, Beige Book, API Crude StocksThursday: ADP Employment, Jobless Claims, Nonfarm Productivity, ISM Manufacturing PMI, Crude Oil Inventories, FOMC’s Harker SpeaksFriday: Nonfarm payrolls, Baker Hughes Rig CountThe biggie this week is the nonfarm payrolls report. Despite lots of headlines about layoffs, the labor market has remained strong in recent months.As of Friday afternoon, traders are pricing in a 66.5% probability of a 25bps June rate hike, up from just 17.4% one week ago. And overseas, we get:Monday: BRL Focus Market Readout, NZD Building Consents, JPY Job/Applications ratio, AUD Building ApprovalsTuesday: CHF GDP, ES CPI, JPY Industrial Prod. & Retail Sales, AUD CPI, CNY PMIWednesday: CHF Retail Sales, FRA CPI & GDP, DE Unemployment & CPI, BRL Unemployment, CAD GPI, AUD Retail Sales, CNY Caixin PMIThursday: DE Retail Sales, ES/ITA/DE/FRA PMI, EU CPI, EU Unemployment, KRW CPIFriday: ES Unemployment, BRL Inflation(don’t forget the market is closed on Monday May 29 for Memorial Day) Earnings: Life After Nvidia?Nvidia (NVDA) was the start of earnings season, but pay attention because we’ve got some big ones this week, like:Tuesday: HP Inc. (HPQ) U-Haul (UHAL), Ambarella (AMBA)Wednesday: Salesforce.com (CRM), Crowdstrike (CRWD), Chewy (CHWY), Kroger (KR), Advance Auto Parts (AAP), C3.ai (AI)Thursday: Dollar General (DG), Macy’s (M), Broadcom (AVGO), Lululemon (LULU), MongoDB (MDB), Zscaler (ZS)This looks like a random grab-bag, but we could see some fireworks. Cloud security play Zscaler (ZS) is the second-best performing Nasdaq 100 stock in May — performing even better than Nvidia. Broadcom (BRCM) will be watch just because semiconductor stocks have been on fire — and not just Nvidia. Marvel (MRVL) was up nearly 30% on Friday after earnings, and 7 of the 25 stocks in the SMH ETF are up more than 20% In May. Salesforce.com (CRM) and MongoDB (MDB) will give us insights on enterprise tech trends, while the retailers like Kroger (KR) and Macy’s (M) should give us more consumer insights. But the star of the week might be C3.ai (AI) on Wednesday, which has been rallying hard on the AI craze. Can they pull an Nvidia? We’re about to find out. AI: The Earnings Season CrazeAccording to Factset, 110 companies in the S&P 500 used the term “AI” during their Q1 earnings calls. That’s up from 78 last quarter. And as far as earnings season goes, things have been better than expected (though not great). 97% of S&P 500 companies have reported, and:78% of companies beat EPS estimates76% of companies have beaten revenue estimates.Earnings have declined by -2.1% vs. expectations for a -6.7% decline Traders Are in a Rotten Mood Despite the Market’s ResilienceInvestors and traders remain bearish despite the market’s strength this year. According to AAII, just 27.4% of investors are bullish. That’s up from last week’s 22.9% reading but well below the long-term average of 37.5%. 39.7% of investors are bearish, and AAII said “Bearish sentiment is above its historical average of 31.0% for the 74th time out of the past 79 weeks.” The Best Stocks & ETFs of 2023For fun, let’s look at the top 20 stocks of 2023:As we discussed, Nvidia (NVDA) is on top by a country mile. Even #2 Meta’s (META) 118% gain is way behind.Now let’s move onto ETFs:Thanks to Nvidia (NVDA), Marvel (MRVL), and other semi names, the SMH ETF is now up a whopping 45% year-to-date The broader XLK and QQQ ETFs are up big but well-behind. And while the ARKK ETF is up big this year with a 25.7% gain, fund head Cathie Wood came under fire for dumping Nvidia (NVDA) right before this year’s historic 160% run. Factoid of the Week: Nvidia Is CHEAP?Want to know how big Nvidia’s guidance was? So big that the consensus FY2024 revenue forecast rose by 41% in two days. And analyst raised their earnings estimates by 70%.These increases are so big that based on forward earnings estimates, Nvidia is the cheapest it’s been since January. (we’re not making a stock recommendation here…) Get to Know Kira TurnerLearn more about Kira Turner of T3 Live’s Inner Circle.
Continue Reading -->Coffee With Greta: Stubborn Inflation
Register now for my free Q&A with David Prince next week on LinkedIn! DJIA Futures: +9 (+0.03%) SPX Futures: +1 (+0.02%) NASDAQ Futures: +23 (+0.2%) Good morning friends! Futures are flat as traders digest the latest inflation data and monitor progress in debt ceiling talks. Let’s get right to it! PCE Inflation Hotter Than Expected The Fed’s preferred inflation gauge ran hotter than expected in April. The Bureau of Economic Analysis’ personal consumption expenditures price index rose 0.4% monthly and 4.4% year over year last month. That was up from the 4.2% gain in March. The core PCE price index, which excludes food and energy and is the Fed’s preferred inflation measure, rose 0.4% monthly and 4.7% year over year. That was hotter than expectations for 0.3% monthly and 4.6% annually. The data showed the U.S. economy tilting back toward a services focus as goods prices increased 2.1% year over year but services prices jumped 5.5%. The report also showed consumer spending held up strong during the month despite stubborn inflation pressures. Consumer spending jumped 0.8% in April vs 0.4% expected. Personal incomes rose 0.4%, in line with expectations. Debt Ceiling Talks Continue Debt ceiling talks are still ongoing after negotiators reportedly moved closer to a deal on Thursday. But the final phase of talks is expected to be the most difficult. Republican Representative Patrick McHenry told reporters, “We’re at a sensitive phase, with sensitive issues that remain. Those sensitive issues are the thorniest issues that we’ve been discussing. Everybody’s trying to do a fine job of figuring out the finer details of this, but nothing’s done.” President Biden said, “The only way to move forward is with a bipartisan agreement, and I believe we’ll come to an agreement that allows us to move forward and protects the hardworking Americans of this country.” No in-person meeting at the White House is scheduled for today but McHenry said, “there’s alignment on the set of things that we need to work on.” Costco Slips After Earnings Miss Costco (COST) shares are down 0.2% ahead of the open after missing fiscal Q3 expectations. Here’s how the warehouse retailer’s results compared to analysts’ estimates: EPS: $2.93 vs $3.29 expected Revenue: $52.6 billion vs $54.5 billion expected Same-store sales rose just 0.3% globally and dipped 0.1% in the U.S., missing expectations for 2.8% growth. Coming Up: Consumer Sentiment The University of Michigan releases its final consumer sentiment index for May at 10:00 a.m. ET. That survey is expected to be unchanged from the flash reading of 57.7 earlier this month. The index also includes consumers’ inflation expectations over the next one, three, and five years. In Case You Missed It Pending home sales stalled in April as buyers struggle with low inventory. The National Association of Realtors reported the number of contracts signed to purchase a home was unchanged last month. That missed expectations for a 0.8% increase. Pending sales tumbled 20.3% year over year.
Continue Reading -->Coffee With Greta: Nvidia Surprise
DJIA Futures: -25 (-0.1%) SPX Futures: +35 (+0.8%) NASDAQ Futures: +306 (+2.2%) Good morning friends! Futures are mixed as tech stocks rally after Nvidia’s blowout earnings report. Let’s get right to it! Nvidia Skyrockets Nvidia (NVDA) shares are surging 29.0% ahead of the open after crushing Q1 expectations and hiking its Q2 guidance. Here’s how the chipmaker’s results compared to analysts’ estimates: Adjusted EPS: $1.09 vs $0.92 expected Revenue: $7.19 billion vs $6.52 billion Nvidia’s CEO said the company is seeing “surging demand” for its data center products and is going to have a “giant record year”. That group’s sales jumped 14% last quarter to $4.28 billion vs $3.9 billion expected. Nvidia forecast $11 billion in Q2 sales, crushing analysts’ estimates for $7.15 billion. Dollar Tree Shrinks After Cutting Guidance Dollar Tree (DLTR) shares are falling 12.1% in premarket trade after missing Q1 earnings expectations and cutting its full-year profit outlook. Here’s how the discount retailer’s results compared to analysts’ estimates: Adjusted EPS: $1.47 vs $1.53 expected Revenue: $7.32 billion vs $7.28 billion expected Dollar Tree maintained its full-year revenue outlook but cut guidance for earnings. The company now expects EPS between $5.73 and $6.13 vs $6.30 to $6.80 previously. The CEO said, “We are adjusting our EPS outlook as we expect the elevated shrink and unfavorable sales mix to persist through the balance of the year. We still expect earnings to be more back-end loaded this year as the benefits of lower ocean freight rates flow through.” Q1 GDP Growth Revised Higher Economic growth in the first quarter was unexpectedly revised higher. The Commerce Department’s second estimate shows annual GDP growth of 1.3% vs 1.1% initially estimated. The increase was primarily driven by an upward revision to inventory investment. Weekly Jobless Claims Lower Than Expected Weekly jobless claims came in lower than expected last week. The Labor Department reported 229,000 Americans filed initial claims for unemployment benefits. That was an increase from the revised 225,000 in the previous week. The previous week was initially estimated at 242,000. But mass fraud has been discovered in unemployment numbers in Massachusetts in recent weeks, which contributed to the apparent increase in nationwide unemployment. The state says it is working to address the problem and will amend previous reports. That could reduce overall claims for the weeks of May 6 and May 13. Debt Ceiling Talks Make Progress House Speaker Kevin McCarthy says talks for a debt ceiling deal are making progress but the two sides still disagree on spending. After negotiators met at the White House on Wednesday, McCarthy said, “We will come to an agreement worthy of the American public and there should not be any fear. Money’s coming in [to the Treasury] every day.” But lawmakers are still leaving Washington for Memorial Day recess beginning today, indicating no deal is close to needing a vote. Rep. Steve Scalise said Wednesday, “If some new agreement is reached between President [Joe] Biden and Speaker McCarthy, members will receive 24 hours notice in the event we need to return to Washington for any additional votes, either over the weekend or next week.” In response to the turmoil over the debt limit, credit rating agency Fitch places the United States’ AAA status on “rating watch negative”. The agency said, “The brinkmanship over the debt ceiling, failure of the U.S. authorities to meaningfully tackle medium-term fiscal challenges that will lead to rising budget deficits and a growing debt burden signal downside risks to U.S. creditworthiness.”
Continue Reading -->Coffee With Greta: Debt Ceiling Drag
DJIA Futures: -115 (-0.4%) SPX Futures: -18 (-0.4%) NASDAQ Futures: -76 (-0.6%) Good morning friends! Futures are falling as traders continue to monitor ongoing debt ceiling talks in Washington. Let’s get right to it! Debt Ceiling Drag Negotiators are expected to meet again today for talks on a debt ceiling deal. The meeting comes after little progress was made during talks on Tuesday after House Speaker Kevin McCarthy’s “productive” meeting with the President on Monday. Lawmakers are facing a June 1 deadline to raise the debt limit or risk a default. Intuit Drops As Tax Filings Slow Intuit (INTU) shares are falling 5.5% ahead of the open after missing fiscal Q3 revenue expectations as its tax filing business slowed. Here’s how the company’s results compared to analysts’ estimates: Adjusted EPS: $8.91 vs $8.48 expected Revenue: $6.02 billion vs $6.09 billion expected Intuit blamed the slowdown in its Turbo Tax business on people who chose not to file this year after filing in previous years to receive pandemic-era stimulus and credits. But the company hiked its full-year guidance. Intuit expects revenue growth of 12% to 13% in fiscal 2023 up from 10% to 12% previously. The company also expects full-year adjusted EPS between $14.20 and $14.25, which would represent growth of 20% vs 15% to 17% previously forecast. Abercrombie & Fitch Surges On Surprise Profit Abercrombie & Fitch (ANF) shares are surging 17.0% in premarket trade after reporting a surprise Q1 profit and hiking its outlook. Here’s how the retailer’s results compared to analysts’ estimates: Adjusted EPS: $0.39 vs $0.05 loss expected Revenue: $836 million vs $815 million expected Same-store sales rose 3% year over year vs the 1% decline analysts were anticipating. Abercrombie hiked its full-year guidance after the beat. The company now expects fiscal 2023 sales growth of 2% to 4% vs 1% to 3% previously. Abercrombie forecast net sales growth of 4% to 6% in Q2. Kohl’s Jumps On Surprise Profit Kohl’s (KSS) shares are rallying 13.1% ahead of the open after reporting a surprise Q1 profit and reiterating its full-year outlook. Here’s how the retailer’s results compared to analysts’ estimates: EPS: $0.13 vs $0.42 loss expected Revenue: $3.36 billion vs $3.34 billion expected Comparable sales fell 4.3% year over year, in line with expectations. Kohl’s expects full-year net sales to decline between 2% and 4% with EPS between $2.10 to $2.70. Meta Begins Latest Round of Layoffs Meta Platforms (META) shares are slipping 0.8% in premarket trade as the company reportedly begins its latest round of layoffs. About 10,000 total workers will lose their jobs between this month’s cuts and the ones enacted in April. Reuters first reported the latest round of cuts had started this morning. Meta employees in user experience, marketing, recruiting, and engineering later announced they had been let go on LinkedIn. The company has not confirmed the reports but the cuts were announced earlier this year as part of CEO Mark Zuckerberg’s “year of efficiency”. In Case You Missed It New home sales jumped unexpectedly in April as buyers struggle with low existing inventory. The Census Bureau reported new home sales rose 4.1% last month to a seasonally adjusted annual rate of 683,000 units vs 669,000 expected. March sales were revised lower to a rate of 656,000 units. But prices pulled back as rates remain high, the median price of a new home sold in April fell to $420,800.
Continue Reading -->Coffee With Greta: Waiting For A Deal
DJIA Futures: -51 (-0.2%) SPX Futures: -9 (-0.2%) NASDAQ Futures: -46 (-0.3%) Good morning friends! Futures are slipping as traders remain on edge over debt ceiling negotiations. Let’s get right to it! Still No Debt Ceiling Deal There is still no deal to raise the debt ceiling after President Biden met with House Speaker Kevin McCarthy on Monday. McCarthy told reporters that Monday’s meeting was “productive” and “professional”. He said, “I think the tone tonight was better than any other night we’ve had discussions.” Both teams of negotiators reportedly reconvened overnight to come up with a compromise deal. McCarthy said, “The president and I know the deadline, so I think we’re going to talk every day … until we get this done.” The deadline to raise the debt limit is June 1. Lowe’s Drops After Cutting Outlook Lowe’s (LOW) shares are falling 1.6% ahead of the open after cutting its full-year outlook despite beating Q1 expectations on the top and bottom line. Here’s how the home improvement retailer’s results compared to analysts’ estimates: Adjusted EPS: $3.67 vs $3.44 expected Revenue: $22.35 billion vs $21.6 billion expected Comparable sales dropped 4.3% year over which was higher than the 3.4% decline analysts were expecting. Lowe’s now expects full-year sales to range between $87 billion and $89 billion vs the previous forecast for $88 billion to $90 billion. The company also expects adjusted EPS of $13.20 to $13.60 vs $13.60 to $14.00 previously. Dick’s Sporting Goods Beats Q1 Estimates Dick’s Sporting Goods (DKS) shares are up 2.6% in premarket trade after beating Q1 estimates on the top and bottom line. Here’s how the sporting goods retailer’s results compared to analysts’ expectations: Adjusted EPS: $3.40 vs $3.18 expected Revenue: $2.842 billion vs $2.799 billion expected Same-store sales jumped 3.4% year over year. Dick’s reaffirmed its full-year outlook for EPS between $12.90 and $13.80 vs $13.38 expected by analysts. Zoom Slips Despite Earnings Beat Zoom Video Communications (ZM) shares are falling 1.4% before the opening bell despite beating fiscal Q1 expectations on the top and bottom line. Here’s how the video calling platform’s results compared to analysts’ estimates: Adjusted EPS: $1.16 vs $0.99 expected Revenue: $1.11 billion vs $1.08 billion expected Zoom also hiked its Q2 and full-year outlooks after the beat. The company now expects Q2 adjusted EPS of $1.04 to $1.06 on $1.11 billion to $1.12 billion expected. That topped analysts’ estimates for adjusted EPS of $1.05 on $1.11 billion in revenue. Zoom forecast full-year adjusted EPS of $4.25 to $4.31 on $4.47 billion to $4.49 billion in revenue vs EPS of $4.21 on $4.45 billion in revenue expected. The CEO said, “The solid start to the year has enabled us to raise our outlook for fiscal-year 2024 while continuing to invest in innovations such as AI to help make interactions more meaningful and communications more effective.”
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DJIA Futures: +37 (+0.1%) SPX Futures: +4 (+0.1%) NASDAQ Futures: +5 (+0.04%) Good morning friends! Futures are flat as traders remain on edge over debt ceiling negotiations. Let’s get right to it! Debt Ceiling Talks To Continue President Biden and House Speaker Kevin McCarthy are set to meet at the White House today to resume negotiations for a debt ceiling deal. The meeting comes after McCarthy said he had a “productive” phone call with Biden on Sunday. Staff reportedly restarted talks Sunday evening. Republicans are demanding spending cuts in exchange for a debt limit increase. But Biden said, “It’s time for Republicans to accept that there is no bipartisan deal to be made solely, solely, on their partisan terms.” Treasury Secretary Janet Yellen reaffirmed the June 1 deadline to come to an agreement. She said, “There can be no acceptable outcomes if the debt ceiling isn’t raised, regardless of what decisions we make. Fed’s Kashkari: June Pause Doesn’t Mean Rate Hikes Are Over Minneapolis Fed President Neel Kashkari is cautioning Americans against reading too much into a pause at the next Fed meeting. Kashkari told CNBC this morning that he’s open to a pause in June but that would not indicate the Fed is done hiking rates. He said, “If we did, if we were to skip in June, that does not mean we’re done with our tightening cycle. It means to me we’re getting more information.” CME Group’s FedWatch Tool shows 82.5% of traders expecting no rate hike on June 14. But Kashkari threw cold water on the market’s expectations of cuts later this year. He said, “Do we then start raising again in July? Potentially, and so that’s the most important thing to me is that we’re not taking it off the table.” The Fed has vowed to remain data-dependent for future rate decisions after the last 25bps hike in May. PacWest Sells Off Construction Loans PacWest Bancorp (PACW) shares are jumping 8.4% ahead of the open after the regional bank announced it has agreed to sell some real estate construction loans to Kennedy-Wilson Holdings (KW). KW shares are also up 2.9% in premarket trade. PacWest sold 74 loans with an outstanding balance of $2.6 billion to Kennedy-Wilson. The bank also plans to sell six more construction loans with a total balance of $363 million to the company. The transaction between PacWest and Kennedy-Wilson is expected to close in multiple deals during this current quarter and early Q3. JPMorgan Hikes Key Revenue Target JPMorgan Chase (JPM) shares are up 0.4% ahead of the opening bell after the bank hiked its full-year revenue target. Slides for an investor presentation today show the largest bank in the U.S. now expects to generate $84 billion in net interest income this year. That’s an increase of $3 billion from the guidance given in its Q1 earnings report, which was already an increase of $7 billion from the previous outlook. The higher forecast comes after JPMorgan’s takeover of First Republic Bank from regulators. But the bank did warn “sources of uncertainty” around deposits and the economy could impact its outlook. CEO Jamie Dimon is expected to speak in a Q&A session during today’s investor event.
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