What’s On Tap for Traders: April 24-29
We’re coming off an exciting week of trading with disappointing earnings from Netflix (NFLX) and Tesla (TSLA) and upside surpises from the banks. Now let’s look at what’s ahead this week. Click this image for a full calendar: (click to enlarge) Tech Earnings Season Rages On Tech has been remarkably strong in 2023 and QQQ is still crushing SPY by more than 2:1: As of Friday at 1:34 p.m. ET And that’s after earnings-driven declines in Tesla (TSLA), Netflix (NFLX), and the semiconductors this week. But we’re just getting started. We’re coming up on a pivotal week with plenty of big tech earnings reports including Tuesday: Microsoft (MSFT), Google (GOOGL) Wednesday: Meta Platforms (META), eBay (EBAY), Texas Instruments (TXN) Thursday: Amazon (AMZN), Intel (INTC) AI has been the #1 buzzword on the Street, which has close eyes on Microsoft and Google for opposing reasons. Investors want to know how far Microsoft is ahead, and how far Google is behind. Meanwhile, Meta has a lot to prove with the stock up over 75% this year. And Amazon is in close focus as a barometer for the consumer. On Friday, JP Morgan reiterated its stance that Amazon is the best internet play right now, so we’ll see how things pan out Thursday. David Prince of T3 Live’s Inner Circle rode up Amazon this week so follow him for more insights on the stock: $AMZN Has been a wonderful ride. I trimmed much of my position today given my 108s are up huge. We have 3-4 big cap reports b4 their print and might very well buy $AMZN on any pullbacks pre thur night. — The Inner Circle Trading Group DP David Prince (@epictrades1) April 21, 2023 A Big Regional Bank Report While bank earnings are mostly behind us, there’s still a biggie to watch Monday morning – even though it’s a regional name. Of course we’re talking about First Republic Bank (FRC), which is 90% off its February highs thanks to the regional bank crisis: This week, Charles Schwab (SCHW) — also caught up in the decline — bounced hard after its Monday morning earnings report: Traders will be eager to see if FRC is going the way of Schwab… or Signature Bank. Energy Earnings Energy has lagged in 2023 after crushing strength in 2021 and 2022, as you can see in this chart going back to January 2021: Exxon (XOM) and Chevron (CVX) report earnings on Friday, which will show us the strength of the industry. Even More Earnings… On top of those, we’ll get plenty of reads on the economy from the likes of: Monday: Coca-Cola (KO) Tuesday: Visa (V), Pepsi (PEP), McDonald’s (MCD), Danaher (DHR), UPS (UPS) Wednesday: Boeing (BA), T-Mobile (TMO) Thursday: Mastercard (MA), Honeywell (HON), Caterpillar (CAT) A Light US Economic Calendar We had few important US economic data points last week, but things get busier this week with: Tuesday: S&P Home Prices, Consumer Confidence, New Home Sales Wednesday: Durable Goods, Trade Balance, Retail Inventories Thursday: GDP, Pending Home Sales Friday: PCE Price Index, Personal Spending, Michigan Sentiment The PCE Price Index is a biggie because it’s one of the Fed’s prime inflationary indicators and could thus impact monetary policy. Overseas Action Speaking of inflation, Germany, France, Spain, Australia, and Singapore will reports CPI numbers this week, giving us a better read on global inflation trends. Germany, France, Spain, and Canada also report their Q1 GDP figures. Sentiment Is as Confusing as Ever The AAII Sentiment Survey shows that just 27.2% of investors are bullish, well below-the long-term average of 37.5%. That’s flat from last week: According to AAII, “bullish sentiment remains below its historical average of 37.5% for the 71st time out of the past 73 weeks.” Pretty bearish… right? Yes. But CNN’s Fear & Greed Index shows that traders are greedy: Permabulls always say everyone’s bearish. Permabears always say everyone’s bullish. The truth is somewhere in the middle… Video of the Week: Scott Redler on the Pro Trading Lifestyle Scott Redler of T3 Live’s Alpha Team VTF® talks to Greta Wall about his life in trading: Go here to sign up for Greta’s next event with T3 Trading’s Derrick Oldensmith. Sami Abusaad’s Gap Trading Webinar Want to learn Sami Abusaad’s gap trading secrets? Go here.
Continue Reading -->Coffee With Greta: Traders Digest Earnings, Recession Fears
DJIA Futures: +28 (+0.1%) SPX Futures: -1 (-0.01%) NASDAQ Futures: -28 (-0.2%) Good morning friends! Futures are flat as traders digest earnings and the latest data showing the economy is headed for a recession. Let’s get right to it! Procter & Gamble Tops Fiscal Q3 Expectations Procter & Gamble (PG) shares are up 2.4% ahead of the open after beating fiscal Q3 expectations on the top and bottom line. Here’s how the consumer goods giant’s results compared to analysts’ estimates: EPS: $1.37 vs $1.32 expected Revenue: $20.07 billion vs $19.32 billion expected Organic sales jumped 7% year over year but sales volume fell 3% as consumers opted for cheaper alternatives. But higher prices helped offset that lower volume. P&G’s prices were up 10% year over year after the company raised prices again during the quarter. The company now expects fiscal 2023 organic sales growth of 6%, up from 4% to 5% previously. Tesla Hikes Prices After Share Slump Tesla (TSLA) shares are up 0.5% in premarket trade after the electric automaker raised prices on some its vehicles Thursday night. The Model S and Model X prices were raised by $2,500 each. The Model S now starts at $87,490 and the Model X at 97,490. The vehicles are still cheaper than they were at the end of the first quarter but the adjustments come just two days after Tesla lowered the prices on its Model Y and Model 3 gain. Tesla shares dropped 9.7% on Thursday, the largest drop since January 3. That decline came after CEO Elon Musk suggested the company will continue cutting prices after reporting Q1 earnings. Musk told analysts, “We’ve taken a view that pushing for higher volumes and a larger fleet is the right choice here versus a lower volume and higher margin.” Coming Up: Services, Manufacturing PMI S&P Global releases its April flash readings for both the services and manufacturing PMIs today. The services index is expected to fall to 51.5 from 52.6 last month while the manufacturing index is expected to decline to 49 from 49.2. These surveys are used to determine the health of the economy by sector. Any reading above 50 signals growth while a reading below 50 signals contraction. In Case You Missed It The latest data signals the U.S. economy is headed for a recession this year. The Conference Board’s leading economic indicators index sank 1.2% in March vs expectations for a 0.7% decline. It was the biggest drop in three years and the 12th consecutive monthly decline. Existing home sales slowed more than expected in March. The National Association of Realtors reported existing sales fell 2.4% last month to a seasonally adjusted annual rate of 4.44 million units vs 4.48 million expected. Home sales were down 22% year over year as high mortgage rates and low supply put pressure on buyers.
Continue Reading -->Coffee With Greta: Tesla Drops
DJIA Futures: -182 (-0.5%) SPX Futures: -31 (-0.7%) NASDAQ Futures: -121 (-0.9%) Good morning friends! Futures are dropping as traders digest the latest Q1 earnings reports. Let’s get right to it! Tesla Drops As Profits, Margins Decline Tesla (TSLA) shares are tumbling 8.3% ahead of the open despite reporting Q1 results that were mostly in line with expectations. Here’s how the electric automaker’s results compared to analysts’ estimates: Adjusted EPS: $0.85 as expected Revenue: $23.33 billion vs $23.21 billion expected Net income tumbled 24% year over year while total revenue rose 24%. Tesla said “underutilization of new factories” stressed its margins during the quarter. Ebitda profit margins dropped to 18.3% in Q1 from 27% a year ago while operating margins fell to 11%. The Q1 results came after Tesla cut its vehicle prices for the sixth time this year earlier on Wednesday. The company said it expects “ongoing cost reduction of our vehicles, including improved production efficiency at our newest factories and lower logistics costs, and remain focused on operating leverage as we scale.” It said pricing will continue to “evolve upwards or downwards, depending on a number of factors.” IBM Earnings IBM (IBM) shares are up 1.2% in premarket trade after beating Q1 profit expectations. Here’s how the company’s results compared to analysts’ estimates: Adjusted EPS: $1.36 vs $1.26 expected Revenue: $14.25 billion vs $14.35 billion expected Net income jumped 26% year over year while revenue increased 0.4%. IBM’s total expenses and other income declined 4% as the company took steps to operate more efficiently. The company said it expects 3% to 5% revenue growth this year and maintained its guidance for $10.5 billion in 2023 free cash flow. Philly Fed Manufacturing Index Contracts Further A key manufacturing gauge slipped further into contraction in April. The Philadelphia Fed’s manufacturing index fell by 8.1 points to negative 31.3 this month. That was the eight straight negative reading and worse than expectations for the index to improve to negative 20. Any reading below zero signals contraction in business activity in the manufacturing sector. Weekly Jobless Claims Rise Weekly jobless claims rose more than expected last week in a sign of rising layoffs. The Labor Department reported 245,000 Americans filed initial unemployment claims, up by 5,000 from the previous week. That was higher than expectations for 244,000. Continuing claims rose by 61,000 to 1.87 million in the week ending April 8, the highest level since November 2021. Coming Up: Existing Home Sales The National Association of Realtors reports existing home sales for March at 10:00 a.m. ET. That report is expected to show the pace of sales slowed to a seasonally adjusted annual rate of 4.48 million units from 4.58 million in February. The housing market has remained under pressure in 2023 due to high mortgage rates, low supply, and high prices. In Case You Missed It Meta Platforms (META) started its latest round of job cuts on Wednesday. The company started laying off employees in technical roles after announcing the cuts in March. The cuts are part of a plan to lay off 10,000 workers this year in addition to the 11,000 announced back in November. Meta is expected to incur $3 billion to $5 billion in restructuring costs related to the layoffs.
Continue Reading -->Coffee With Greta: Stocks Drop After Netflix Earnings
DJIA Futures: -113 (-0.3%) SPX Futures: -26 (-0.6%) NASDAQ Futures: -112 (-0.9%) Good morning friends! Futures are falling as traders digest the latest batch of earnings and Treasury yields pop on inflation concerns. Let’s get right to it! Netflix Reports Mixed Q1 Results, Delays Crackdown On Password Sharing Netflix (NFLX) shares are down 2.6% ahead of the open after reporting mixed Q1 results. Here’s how the streaming giant’s results compared to analysts’ estimates: EPS: $2.88 vs $2.86 expected Revenue: $8.16 billion vs $8.18 billion expected Netflix also announced it is delaying the rollout of its password-sharing crackdown in the U.S. after seeing an impact on subscriber growth from the initiative in international markets. That crackdown was supposed to begin late in the first quarter but the company is now planning to do it in the second quarter. Netflix estimates 43% of its global user base share accounts and claims that has affected its ability to invest in new content. Users will be required to set a “primary location” for their account and can then establish up to two “sub accounts” for extra fees. The company said it has seen increased revenue as a result of the paid-sharing option in markets where it has already been rolled out. United Airlines Beats Q1 Expectations, Forecasts Q2 Profit United Airlines (UAL) shares are slipping 0.7% in premarket trade despite reporting better-than-expected Q1 results. Here’s how the carrier’s results compared to analysts’ estimates: Loss per share: $0.63 vs $0.73 expected Revenue: $11.43 billion vs $11.42 billion expected United’s revenue per available seat mile jumped more than 22% year over year. Unit costs rose 4% annually due to higher fuel prices, but were down 0.1% when stripping out fuel. The airline expects to report adjusted earnings of $3.50 to $4 per share in the second quarter as the peak summer travel season begins. United also expects revenue to rise 14% to 16% year over year with capacity up 18.5%. Morgan Stanley Drops Despite Earnings Beat Morgan Stanley (MS) shares are falling 4.0% ahead of the open despite beating Q1 expectations on the top and bottom line. Here’s how the bank’s results compared to analysts’ estimates: EPS: $1.70 vs $1.62 expected Revenue: $14.52 billion vs $13.92 billion expected Earnings were down 19% year over year while revenue fell 2%. Morgan Stanley’s wealth management revenue jumped 11% from a year ago to $6.56 billion, in line with estimates. Fixed-income trading revenue beat expectations at $2.58 billion and equities trading revenue also topped estimates at $2.73 billion. Investment banking revenue tumbled 24% annually to $1.25 billion but still topped estimates for $1.2 billion. U.K. Inflation Surges The U.K. released its March consumer price index overnight, which showed inflation surging. The U.K. CPI rose 10.1% year over year vs expectations for 9.8%. On a monthly basis, the CPI rose 0.8% vs 0.5% expected. The high inflation reading sent U.S. Treasury yields higher overnight, pushing down stocks. The 2-year yield is up 5 basis points at 4.25% while the 10-year yield is also up 5 basis points at 3.63%. Mortgage Demand Drops As Rates Jump Mortgage demand tumbled last week as rates increased. The Mortgage Bankers Association reported purchase applications dropped 10% weekly and were down 36% year over year. Refinance applications fell 6% weekly and 56% annually. The drop came as the average 30-year fixed rate increased to 6.43% from 6.30% the previous week. MBA’s deputy chief economist said, “Affordability challenges persist and there is limited for-sale inventory in many markets across the country, so buyers remain selective on when they act.”
Continue Reading -->Coffee With Greta: More Big Bank Earnings
DJIA Futures: +33 (+0.1%) SPX Futures: +21 (+0.5%) NASDAQ Futures: +110 (+0.8%) Good morning friends! Futures are mostly higher as traders digest the latest batch of earnings. Let’s get right to it! Bank of America Earnings Beat Bank of America (BAC) shares are up 2.3% ahead of the open after beating Q1 expectations on the top and bottom line. Here’s how the consumer bank’s results compared to analysts’ expectations: EPS: $0.94 vs $0.82 expected Revenue: $26.39 billion vs $25.13 billion expected Net interest income jumped 25% year over year due to higher interest rates. CEO Brian Moynihan said, “Every business segment performed well as we grew client relationships and accounts organically and at a strong pace. Our results demonstrate how our company’s decade-long commitment to responsible growth helped to provide stability in changing economic environments.” Bank of America boosted its loan-loss reserves by $931 million during the quarter. Goldman Sachs Earnings Mixed Goldman Sachs (GS) shares are slipping 3.4% in premarket trade after reporting mixed Q1 results. Here’s how the investment bank’s results compared to analysts’ estimates: EPS: $8.79 vs $8.10 expected Revenue: $12.22 billion vs $12.79 billion expected Profit dropped 18% year over year while revenue fell 5%. The revenue miss was blamed on a $470 million hit the bank took tied to the sale of consumer loans. Goldman’s fixed income trading revenue dropped 17% to $3.93 billion, about $230 million short of estimates. Equities trading revenue slipped 7% to $3.02 billion vs $2.9 billion expected. Investment banking revenue tumbled 26% to $1.58 billion but topped estimates of $1.44 billion. Johnson & Johnson Beats Expectations, Hikes Outlook Johnson & Johnson (JNJ) shares are up 1.4% ahead of the open after beating Q1 expectations on the top and bottom line. Here’s how the pharmaceutical giant’s results compared to analysts’ estimates: Adjusted EPS: $2.68 vs $2.50 expected Revenue: $24.75 billion vs $23.67 billion expected The company also raised its full-year outlook following the beat. Johnson & Johnson now expects 2023 revenue of $97.9 billion to $98.9 billion, up by about $1 billion from its previous outlook. The company expects full-year EPS of $10.60 to $10.70 vs $10.45 to $10.65 previously. The CEO told CNBC, If you think about how we started the year and guidance in January, we were responsibly cautious. First-quarter growth was much stronger than even fourth-quarter growth for all three business units, and our positions kind of change to responsibly optimistic at this point. We feel very good about 2023.” Housing Starts, Building Permits Fall New home construction in the U.S. fell less than expected in March. The Census Bureau reported housing starts fell 0.8% last month to a seasonally adjusted annual rate of 1.42 million units. That was down from 1.43 million in February but higher than 1.40 million expected. Starts were down 17.2% year over year. Single-family starts rose 2.7% while multi-family starts tumbled 6.7%. The slowdown is expected to continue as building permits dropped more than expected. The number of new permits issued last month dropped 8.8% to a seasonally adjusted annual rate of 1.41 million units vs 1.45 million expected. Permits plunged 24.8% year over year. Single-family permits rose 4.1% monthly while multi-family permits dropped 24.3%.
Continue Reading -->A Big Earnings Week
We have mostly green arrows around the world as we get ready for earnings season to continue. JPM kicked it off with a strong move Friday. SPX is above the 8 day and as long as it holds the 4102 area, it’s hard to get too bearish. 4163 is the recent high. 4195 is the February high. Know what you own and why during earnings season because you can get outsized moves in both directions. Now let’s dig into some individual names: NFLX reports Tuesday. It’s pretty tight. I’m not sure if I will play it yet. Last quarter it led tech with a gap and go. This time it might be hard. To see $379, it will have to get and stay above $379. We’ll discuss on Tuesday. In order to see $320, it needs to get and stay below $332. TSLA is tricky when it doesn’t lead tech. Expectations are lower since the deliveries missed. Earnings are on Wednesday. I’m not sure if I’ll play it. Until then, see if it holds the $180 area Recent resistance area is $189-$191. AMZN perked up again as it cleared the 8 day. I did nibble a little. If this is any good, it shouldn’t really get back below $101ish. I managed it decent on Friday. META continues to ride the 8 day as it made a new weekly high of $222.11 Friday. I did sell mine after buying the weakness. If you have this on as a swing, use $217 as key active support. I’d think the $217 area will hold if this is going to keep leading. JPM’s beat almost felt too obvious as most flows from regional banks went to the majors. It had a big gap and go Friday and hit $139.12. It might need to digest a few sessions. See it holds $134.90. SCHW reports today. It should be interesting as they are trying to ease investor concerns. It hasn’t bounced much. Active support is $48, then $45. Pivot resistance is $53. Scott Redler Positions Disclosure as of 2023-04-17 at 9.02.07 AM
Continue Reading -->Coffee With Greta: Traders Await Earnings
DJIA Futures: +31 (+0.1%) SPX Futures: -1 (-0.01%) NASDAQ Futures: -11 (-0.1%) Good morning friends! Futures are flat as traders look ahead to big earnings later this week. Let’s get right to it! Big Earnings Week Q1 earnings season will pickup steam this week with more big banks and some big tech names on the calendar. Here are the major companies reporting results this week: Tuesday: Bank of America (BAC), Goldman Sachs (GS), Netflix (NFLX), United Airlines (UAL) Wednesday: Morgan Stanley (MS), IBM (IBM), Tesla (TSLA) Thursday: AT&T (T) Friday: Procter & Gamble (PG) This earnings season is expected to show lower profits overall as consumers pull back on spending amid to persistently high inflation pressures. Traders are also focused on future outlooks to gauge how companies expect the economy to shift over the next few months. Charles Schwab Q1 Earnings Beat Charles Schwab (SCHW) shares are up 0.7% ahead of the open after beating Q1 profit expectations. Here’s how the brokerage’s results compared to analysts’ estimates: Adjusted EPS: $0.93 vs $0.90 expected Revenue: $5.12 billion vs $5.14 billion expected The CEO said investor sentiment “remained bearish” during the quarter and the bond markets reflected “growing fears of an economic downturn”. Empire State Manufacturing Index Jumps A key manufacturing gauge unexpectedly jumped into positive territory this month. The New York Fed’s Empire State manufacturing index jumped 35.4 points to 10.8. That topped economists’ expectations for a reading of negative 15. Any reading above zero indicates improving conditions in the manufacturing sector and this is the first positive reading in five months. The new orders index soared 46.8 points to 25.1, the shipments index jumped 37.3 points to 23.9, and unfilled orders rose 6.7 points to 0. But employment and hours worked both declined for the third month in a row. In Case You Missed It Treasury Secretary Janet Yellen believes the recent banking crisis will take some pressure off of the Fed on inflation. In a CNN interview over the weekend said, “Banks are likely to become somewhat more cautious in this environment. We already saw some tightening of lending standards in the banking system prior to that episode, and there may be some more to come.” She said that tightening “could be a substitute for further interest rate hikes that the Fed needs to make.”
Continue Reading -->What’s On Tap for Traders: April 17-21
We’re coming off an exciting week of trading with a cool CPI report, a more cautious Fed, and some upside earnings surprises from the banks. Now let’s look at what’s ahead this coming week. Click this image for a quick look at what’s on the calendar: (click to enlarge) Tech Earnings Season Begins With Netflix and Tesla Tech is outperforming big time in 2023, with the QQQ’s up 18.6% vs. a 7.3% gain for SPY: As of Friday at 1:30 p.m. ET But the scales may tip with Netflix (NFLX) reporting earnings on Tuesday. T3 Live Chief Strategic Officer Scott Redler notes “It’s hard to be long or short Netflix into earnings given how far it’s come. It’s been a real leader over the last quarter, so it will give traders a good gauge on tech stock sentiment.” Tesla (TSLA) follows on Wednesday. Dan Darrow of T3 Live’s Alpha Team VTF® tells us “Tesla’s earnings will be must-see TV. April deliveries were disappointing relative to high expectations, and it will take a strong report and guidance to break the stock out of its 2-month trading range.” FYI: Dan will join Greta Wall for a LinkedIn Q&A this Wednesday. Click here to sign up! Given Elon Musk’s chronic inability to stay out of the news, the world will be watching this show. Semiconductor investors will want to keep an eye on ASML Holding (ASML) and Lam Research (LRCX) on Wednesday plus Taiwan Semi (TSM) on Thursday. The VanEck Semiconductor ETF (SMH) is up a whopping 22.9% YTD to top our ETF leaderboard: Click to enlarge As of Friday at 1:30 p.m. ET Micron (MU) rallied after a horrible quarter, so we’ll see if the “it can’t get any worse” semi rally extends into Q2. Positions Disclosure: Scott Redler and Dan Darrow’s positions as of 2023-04-14 at 1.26.32 PM (Click to enlarge) Even More Bank Earnings: Schwab in Focus Bank earnings were on the strong side Friday, with JP Morgan (JPM) surging higher: We’ll get even more this coming week. Schwab (SCHW) is a big one to watch on Monday. We all know Schwab as a major broker and asset manager, but the company’s bond market losses got it caught up in the regional bank meltdown, and the stock’s been a mess: Traders and investors are eager to see the impact on Schwab’s financials. The options market is pricing in a ~9% move in SCHW next week. Given the uncertainty, we could see such a move. Other bank reports to watch: Monday: State Street (STT) Tuesday: Bank of America (BAC) and Goldman Sachs (GS) Wednesday: Morgan Stanley (MS) and US Bancorp (USB) Thursday: American Express (AXP) A Light US Economic Calendar The US economic calendar lightens up a bit this week. We’ll have Building Permits on Tuesday followed by the Philly Fed and Existing Homes Sales numbers on Thursday. Traders will be looking for more signs of a slowdown to get a better read on the Fed and monetary policy. Overseas Is Busier The global calendar has a lot more happening, especially on the inflation front. We have CPI readings on Tuesday (Canada) and Wednesday (England, Eurozone, New Zealand). Inflation seems to be cooling worldwide so we’ll see if the trend continues. Plus, China reports GDP and Industrial Production numbers late Monday. And on Friday, we’ll get England and Canada’s Retail Sales numbers. Sentiment Is Still… Confusing: The AAII Sentiment Survey shows that just 26.1% of investors are bullish, well below-the long-term average of 37.5%. That’s down from 33.3% last week: According to AAII, “bullish sentiment remains below its historical average of 37.5% for the 71st time out of the past 73 weeks.” Pretty bearish… right? Yes. But CNN’s Fear & Greed Index shows that traders are greedy: Permabulls always say everyone’s bearish. Permabears always say everyone’s bullish. The truth is somewhere in the middle… Video of the Week David Prince of Inner Circle talks to Jesse Martin, winner of two World Series of Poker Gold Bracelets and the 2019 $2 Million DraftKings Fantasy Football World Championship. Jesse is an IC member and shares how high-stakes poker trained him to succeed in the markets. Momentum Mastery Is Coming… JR Romero, Head of T3’s Newsbeat Program, is teaching his all-new Momentum Mastery Course LIVE. Want in? Contact Amber Buchetto for details. What did you think of this article? Let us know in the comments!
Continue Reading -->Coffee With Greta: Earnings Kickoff With Big Banks
DJIA Futures: -9 (-0.03%) SPX Futures: -7 (-0.2%) NASDAQ Futures: -93 (-0.7%) Good morning friends! Futures are mostly lower as traders digest first-quarter earnings from big banks and new data on the U.S. consumer. Let’s get right to it! JPMorgan Chase Reports Record Revenue JPMorgan Chase (JPM) shares are rallying 6.1% ahead of the open after beating Q1 expectations on the top and bottom line. Here’s how the largest U.S. bank’s results compared to analysts’ estimates: Adjusted EPS: $4.32 vs $3.41 expected Revenue: $39.34 billion vs $36.19 billion expected Net interest income surged nearly 50% year over year which pushed quarterly revenue to a new record. CEO Jamie Dimon said, “The U.S. economy continues to be on generally healthy footings —consumers are still spending and have strong balance sheets, and businesses are in good shape.” But he also warned, “the storm clouds that we have been monitoring for the past year remain on the horizon, and the banking industry turmoil adds to these risks.” Wells Fargo Tops Q1 Expectations Wells Fargo (WFC) shares are up 3.8% in premarket trade after beating Q1 expectations on the top and bottom line. Here’s how the bank’s results compared to analysts’ expectations: GAAP EPS: $1.23 vs $1.13 expected Revenue: $20.73 billion vs $20.08 billion expected Wells Fargo’s net interest income surged 45% year over year as interest rates rose. CEO Charlie Scharf said, “We had strong results in the first quarter including revenue growth from both the fourth quarter and a year ago, and we continued to make progress on our efficiency initiatives.” Wells Fargo set aside $1.2 billion for credit losses during the quarter. Citigroup Rises On Earnings Beat Citigroup (C) shares are up 1.6% ahead of the open after beating Q1 expectations on the top and bottom line. Here’s how the investment bank’s results compared to analysts’ estimates: Profit: $4.6 billion vs $4.3 billion expected Revenue: $21.45 billion vs $19.99 billion expected Personal banking revenue rose 18% year over year while fixed-income markets revenue rose 4%. But Citigroup did see declines in investment banking and equity markets revenue. UnitedHealth Group Raises Outlook After Earnings Beat UnitedHealth Group (UNH) shares are up 0.4% in premarket trade after beating Q1 expectations on the top and bottom line and hiking its outlook. Here’s how the health insurer’s results compared to analysts’ expectations: EPS: $6.26 vs $6.16 expected Revenue: $91.9 billion vs $89.7 billion expected In a statement, the company said, “In the first quarter of 2023, UnitedHealthcare grew to serve nearly 2 million more people than a year ago, with broad-based growth across the company’s commercial, community-based and senior benefit offerings.” UnitedHealth hiked its full-year earnings outlook to between $24.50 and $25 per share vs $24.40 to $24.90 previously. Retail Sales Fall More Than Expected Retail sales fell more than expected in March as consumers pulled back. The Commerce Department reported retail sales dropped 1% last month to $691.7 billion. That was worse than expectations for a 0.5% decline. Here’s a look at the monthly change in retail sales by category: -5.5% gas stations -2.5% department stores -2.1% electronics stores -2.1% building supply stores -1.7% clothing retailers -1.6% cars, parts stores -1.2% furniture stores 0.0% grocery stores +0.1% restaurants, bars +0.2% sporting, hobby stores +0.3% health, personal care stores +1.9% online
Continue Reading -->Coffee With Greta: Wholesale Inflation Tumbles
DJIA Futures: +57 (+0.2%) SPX Futures: +11 (+0.3%) NASDAQ Futures: +58 (+0.5%) Good morning friends! Futures are rising as another report points to cooling inflation pressures. Let’s get right to it! Wholesale Inflation Tumbles Wholesale inflation pressures unexpectedly dropped in March. The Bureau of Labor Statistics’ producer price index fell 0.5% monthly and rose just 2.7% year over year. That was better than expectations for the index to be unchanged on a monthly basis and a sharp slowdown from the 4.9% annual gain in February. It was the largest drop in 3 years, driven mostly by lower energy prices. Energy prices tumbled 6.4% last month while food prices rose 0.6%. The core PPI, which excludes food and energy, rose 0.1% monthly and 3.6% annually last month vs expectations for a 0.3% monthly increase. The data points to cooling inflation pressures for Americans as producers pass down price changes to consumers. Weekly Jobless Claims Rise Weekly jobless claims rose more than expected last week, a sign the labor market is continuing to cool. The Labor Department reported 239,000 Americans filed initial unemployment claims. That was up by 11,000 from the previous week and higher than 232,000 expected. But claims still remain below the 270,000 level which economists say would signal a deterioration in the labor market. Continuing jobless claims fell by 13,000 to 1.81 million in the week ending April 1. Delta Jumps On Strong Outlook Delta Airlines (DAL) shares are rising 2.6% ahead of the open despite missing Q1 expectations on the top and bottom line. Here’s how the airline’s results compared to analysts’ estimates: Adjusted EPS: $0.25 vs $0.30 expected Adjusted revenue: $11.84 billion vs $11.99 billion expected But Delta’s Q2 forecast was better than expected, signaling strong travel demand. The airline expects Q2 sales to increase 15% to 17% year over year with adjusted EPS between $2 and $2.25. That topped analysts’ estimates for revenue growth of 14.7% and EPS of $1.66. Delta said it expects “record advance bookings for the summer.” That strong outlook is also boosting other airlines in premarket trade with United Airlines (UAL) shares up 2.8% and American Airlines (AAL) shares up 2.0%. In Case You Missed It The Fed’s March meeting minutes were released on Wednesday and showed officials expect the U.S. economy to fall into a “mild recession” later this year due to the banking crisis. The minutes also showed several members were leaning toward a 50 basis point rate hike at the last meeting prior to the banking problems. Officials said inflation is still “much too high” but stressed they will remain data-dependent in upcoming meetings. American Airlines (AAL) shares tumbled 9.2% on Wednesday after the company updated its Q1 forecast. American said it expects to report Q1 adjusted EPS between $0.01 and $0.05. That was better than the previous outlook for earnings to break even but below analysts’ estimates of $0.06.
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