Coffee With Greta: Awaiting Powell
DJIA Futures: +101 (+0.3%) SPX Futures: +13 (+0.3%) NASDAQ Futures: +10 (+0.1%) Good morning friends! Futures are rising as traders look ahead to a speech by the Fed Chair today. Let’s get right to it! Powell On Deck Traders are awaiting a speech by Fed Chair Jerome Powell at 11:00 a.m. ET today. Powell will participate in a panel discussion alongside former Fed Chair Ben Bernanke at the Thomas Laubach Research Conference. The market is focused on this speech after two Fed officials seemed to put their support behind a June rate hike on Thursday. Dallas Fed President Lorie Logan said in a speech, “We haven’t yet made the progress we need to make. And it’s a long way from here to 2 percent inflation.” St. Louis Fed President James Bullard later today the Financial Times, “I do expect disinflation, but it’s been slower than I would have liked, and it may warrant taking out some insurance by raising rates somewhat more to make sure that we really do get inflation under control.” Bullard added, “Our main risk is that inflation doesn’t go down or even turns around and goes higher, as it did in the 1970s.” CME Group’s FedWatch Tool still shows 64.4% of traders betting on no rate hike at the June 14 meeting. Foot Locker Tumbles After Earnings Miss Foot Locker (FL) shares are plunging 26.2% ahead of the open after missing Q1 expectations and cutting its full-year outlook. Here’s how the shoe retailer’s results compared to analysts’ estimates: EPS: $0.70 vs $0.76 expected Revenue: $1.93 billion vs $1.99 billion Same-store sales dropped 9.1% year over year vs the 7.7% decline expected. Foot Locker now expects full-year EPS of $2 to $2.25, down from $3.35 to $3.65 previously. The company also expects full-year sales to fall 6.5% to 8% vs 3.5% to 5.5% previously. The CEO said, “Our sales have since softened meaningfully given the tough macroeconomic backdrop, causing us to reduce our guidance for the year as we take more aggressive markdowns to both drive demand and manage inventory.” Deere Jumps On Earnings Beat Deere & Co (DE) shares are rising 3.4% in premarket trade after beating fiscal Q2 expectations on the top and bottom line. Here’s how the company’s results compared to analysts’ estimates: EPS: $9.56 vs $8.58 expected Revenue: $16 billion vs 14.9 billion expected Deere hiked its full-year guidance following the beat. The company now expects net income between $9.25 billion and $9.5 billion this year vs $8.75 billion and $9.25 billion previously. The CEO said, “As shown by the company’s outstanding second-quarter results, Deere continues to benefit from favorable market conditions and an improving operating environment. Though supply-chain constraints continue to present a challenge, we are seeing further improvement.” In Case You Missed It Existing home sales slowed less than expected in April. The National Association of Realtors reported existing sales fell 3.4% last month to a seasonally adjusted annual rate of 4.28 million units vs 4.26 million expected. Existing sales were down 23.2% year over year. There were 1.04 million homes for sale at the end of the month, up 1% from April 2022 but representing just a 2.9-month supply. The median price of an existing home sold in April fell 1.7% annually to $388,800. The Conference Board’s leading economic indicators index fell 0.6% as expected in April. That was the 13th straight monthly decline, signaling an impending recession. Eight of the 10 indicators included in the index declined. The measure of current economic conditions rose 0.3%.
Continue Reading -->Coffee With Greta: Fed Pause In Question
DJIA Futures: -57 (-0.2%) SPX Futures: -2 (-0.04%) NASDAQ Futures: +5 (+0.04% Good morning friends! Futures are mixed as traders digest hawkish comments from a key Fed official and Walmart’s strong earnings. Let’s get right to it! Dallas Fed President Does Not Support Pause Dallas Fed President Lorie Logan does not believe current data supports a pause in rate hikes at the bank’s next meeting. In a speech prepared for today in San Antonio, Logan said, “The data in coming weeks could yet show that it is appropriate to skip a meeting. As of today, though, we aren’t there yet.” She is a voting member of the Federal Open Market Committee this year. CME Group’s FedWatch Tool shows traders split about 50/50 on whether the Fed will hold rates steady or implement a 25bps hike at the June 14 meeting. Logan said, “We haven’t yet made the progress we need to make. And it’s a long way from here to 2% inflation.” The Fed’s preferred inflation gauge for April, the core PCE price index, will be released next week. Walmart Jumps After Earnings Beat Walmart (WMT) shares are up 1.4% ahead of the open after beating Q1 expectations on the top and bottom line and hiking its full-year outlook. Here’s how the retailer’s results compared to analysts’ estimates: Adjusted EPS: $1.47 vs $1.32 expected Revenue: $152.30 billion vs $148.76 billion expected Sales rose nearly 8% year over year as strong grocery sales helped offset weaker clothing and electronics sales. Walmart raised its full-year forecast after the beat, now expecting adjusted earnings between $6.10 and $6.20 per share. But its Q2 outlook was a bit weaker than expected. The retailer expects Q2 earnings to range between $1.63 and $1.68 per share vs $1.71 expected. The CFO said they have seen a shift in consumer spending but shoppers remain resilient. He said, “I think that’s in part probably because balance sheets are much stronger than they were pre-pandemic, even at this point.” Bath & Body Works Surges After Q1 Beat Bath & Body Works (BBWI) shares are rallying 12.3% in premarket trade after topping Q1 estimates and raising its full-year guidance. Here’s how the body care retailer’s results compared to analysts’ expectations: EPS: $0.33 vs $0.26 expected Revenue: $1.396 billion vs $1.393 billion expected The CEO said, “We delivered first quarter sales in line with our expectations while our EPS was better than anticipated as we saw benefits from our work to improve merchandise margin as well as early benefits from our cost optimization initiatives.” Bath & Body Works raised its full-year earnings guidance after the beat to between $2.70 and $3.10 vs $2.50 to $3.00 previously. Cisco Drops On Demand Concerns Cisco (CSCO) shares are down 4.5% ahead of the open despite beating fiscal Q3 expectations as concerns mount about demand. Here’s how the company’s results compared to analysts’ estimates: Adjusted EPS: $1.00 vs $0.97 expected Revenue: $14.57 billion vs $14.4 billion expected But orders declined 23% during the quarter, prompting fears about lower demand. For fiscal Q4, Cisco forecast adjusted EPS between $1.05 to $1.07 and revenue growth of 14% to 16%. That was better analysts’ estimates for EPS of $1.04 on $14.95 billion in revenue. The company also raised its full-year profit guidance, expecting adjusted EPS of $3.80 to $3.82. Weekly Jobless Claims Drop Weekly jobless claims fell more than expected last week as the labor market remains strong. The Labor Department reported 242,000 Americans filed initial unemployment claims. That was down by 22,000 from the previous week and lower than 255,000 expected. Continuing claims also fell by 8,000 to 1.799 million in the week ending May 6. Philly Fed Manufacturing Index Improves A key manufacturing gauge shows activity declined for the 9th straight month in May. The Philly Fed’s manufacturing index rose by nearly 21 points to negative 10.4 this month. That was better than expectations for negative 20 but marked the ninth straight negative reading. New orders increased 13.8 points to negative 8.9, the shipments index improved slightly to negative 4.7, and the six-month business outlook fell by 10.3 points to negative 1.5. Coming Up: Existing Home Sales, Leading Economic Indicators The National Association of Realtors reports existing home sales for April at 10:00 a.m. ET. That report is expected to show the pace of sales slowed last month to a seasonally adjusted annual rate of 4.26 million units. The existing home market has remained restricted by low inventory keeping prices high even amid high mortgage rates. The Conference Board also releases its leading economic indicators index for April at 10:00 a.m. That survey is expected to fall 0.6% from March. That would be the 13th straight monthly decline as the index continues to signal a recession is near.
Continue Reading -->Coffee With Greta: Stocks Jump On Debt Ceiling Optimism
Don’t miss my free Q&A event with pro trader Dan Darrow after the market close today. Register now! DJIA Futures: +139 (+0.4%) SPX Futures: +15 (+0.4%) NASDAQ Futures: +29 (+0.2%) Good morning friends! Futures are higher amid hopes for a debt ceiling deal. Let’s get right to it! Debt Ceiling Talks Make Progress House Speaker Kevin McCarthy says debt ceiling talks are making progress and he does not think there will be a default. McCarthy told CNBC today that he was encouraged by President Biden’s willingness to negotiate. He said, “Now [Biden has] finally admitted that we’re going to negotiate and we have a structure to negotiate. The problem is the timeline is very short.” This comes after Biden decided Tuesday to cut his trip to Asia short to return for debt ceiling talks. Talks have been ongoing between Congressional leaders and their staff. House Minority Leader Hakeem Jeffries also told CNBC “I’m optimistic common ground will be found in the next week or two.” Target Tops Q1 Expectations Target (TGT) shares are up 0.7% ahead of the open after topping Q1 expectations on the top and bottom line. Here’s how the retailer’s results compared to analysts’ estimates: EPS: $2.05 vs $1.76 expected Revenue: $25.32 billion vs $25.29 billion expected Revenue rose just 1% year over year while comparable sales were flat. The CEO said shoppers are spending less on discretionary items but Target is still drawing customers into stores with groceries, everyday essentials, and on-trend items. The company said it expects sales to remain sluggish in Q2 and maintained its full-year outlook. Target expects full-year earnings between $7.75 and $8.75 per share. Housing Starts, Building Permits Mixed U.S. new home construction picked up in April as builders continue to see strong buyer demand. The Commerce Department reported housing starts rose 2.2% last month to a seasonally adjusted annual pace of 1.4 million units. That was in line with economists’ expectations but starts were still down 22.3% year over year. Single-family starts rose 1.6% monthly and fell 28.1% annually. Multi-family starts jumped 5.2% monthly and fell 11.7% annually. But building permits fell more than expected in April, down 1.5% to a seasonally adjusted annual rate of 1.42 million units. Single-family permits rose 3.1% monthly and were down 21.2% annually. Multi-family permits dropped 9.7% monthly and 23% annually. Mortgage Demand Drops Mortgage demand dropped last week as rates hit a 2-month high. The Mortgage Bankers Association reported purchase applications dropped 4.8% weekly and 26% year over year. Refinance applications tumbled 8% weekly and 43% annually. The average 30-year fixed contract rate rose to 6.57% from 6.48%. The MBA’s chief economist said, “buyers remain wary of this rate volatility” and “for-sale inventory in many parts of the country remains scarce.” In Case You Missed It Homebuilder sentiment turned positive this month for the first time since July 2022. The National Association of Homebuilders sentiment index rose 5 points to 50 in May. That was better than expectations for the survey to be unchanged at 45. Current sales conditions rose 5 points to 56, the 6-month expectations index rose 7 points to 57, and buyer traffic improved by 2 points to 33. Builders say they are benefiting from low inventory of existing homes for sale with buyers turning to new builds instead.
Continue Reading -->Coffee With Greta: Home Depot’s Consumer Warning
DJIA Futures: -90 (-0.3%) SPX Futures: -9 (-0.2%) NASDAQ Futures: -21 (-0.2%) Good morning friends! Futures are falling after disappointing results from Home Depot prompt worries about the consumer. Let’s get right to it! Home Depot Drops On Revenue Miss, Lower Outlook Home Depot (HD) shares are falling 2.5% ahead of the open after missing Q1 sales expectations and lowering its full-year outlook. Here’s how the home improvement retailer’s results compared to analysts’ estimates: EPS: $3.82 vs $3.80 expected Revenue: $37.26 billion vs $38.28 billion expected It was the company’s largest revenue miss in 20 years and the second quarter in a row it missed sales estimates. Comparable sales dropped 4.6% in the U.S. with the CFO saying lower lumber prices accounted for more than 2% of that drop. Home Depot now expects sales to decline between 2% and 5% in 2023 vs its previous outlook for sales to be flat. The retailer also expects full-year EPS to fall 7% to 13% vs the 5.7% estimate. Retail Sales Rise Less Than Expected U.S. retail sales rose less than expected in April. The Commerce Department reported retail sales rose 0.4% last month to $686.1 billion. That was a rebound from the 0.7% decrease in March but lower than expectations for a 0.8% increase. Total sales were 1.6% higher year over year. Retail sales excluding autos rose 0.4% in April, in-line with expectations. Coming Up: Homebuilder Sentiment The National Association of Homebuilders releases its May sentiment index at 10:00 a.m. ET. That survey is expected to be unchanged from April at 45. Confidence among builders remains in negative territory but has been improving in recent months as the 6-month expectations improve. Builders are looking ahead to lower mortgage rates in the future as the Fed appears to be done with the latest rate-hiking cycle. In Case You Missed It Consumer debt surpassed $17 trillion for the first time in Q1. New data from the New York Fed on Monday showed total borrowing totaled $17.05 trillion in the first three months of the year. New mortgage originations totaled $323.5 billion, the lowest level since Q2 2014 and down 62% year over year. Student loan debt rose to $1.6 trillion while auto loan debt rose to $1.56 trillion. Credit card delinquencies rose to 6.5% while auto loan delinquencies rose to 6.9%.
Continue Reading -->Coffee With Greta: Debt Ceiling Talks Make Progress
DJIA Futures: +58 (+0.2%) SPX Futures: +9 (+0.2%) NASDAQ Futures: +30 (0.2%) Good morning friends! Futures are higher amid optimism over debt ceiling talks. Let’s get right to it! Debt Ceiling Negotiations Continue President Biden is expected to meet on Tuesday with the big four Congressional leaders about the debt ceiling. Sources say there were “productive” staff-level negotiations over the weekend. This comes after Friday’s meeting was postponed in order to provide more time for lower-level talks. The Treasury Secretary says the U.S. is facing a June 1 default deadline to raise the debt limit. Big Retail Earnings Week This will be an important week to help traders gauge the health of the U.S. consumer. Several big retailers are scheduled to report Q1 results this week: Tuesday: Home Depot (HD) Wednesday: Target (TGT) Thursday: Walmart (WMT) These reports will give traders more insight into how consumers have been shifting their spending habits amid high inflation and ahead of an expected recession. Atlanta Fed President Says No Rate Cuts Atlanta Fed President Raphael Bostic says he doesn’t see any rate cuts happening in 2023. Bostic told CNBC this morning, “For me, inflation is job No. 1. We’ve got to get back to our target. If there’s going to be some cost to that, we’ve got to be willing to do that.” He added, “If there’s going to be a bias to action, for me would be a bias to increase a little further as opposed to cut.” But CME Group’s FedWatch Tool still shows the market pricing in as many as 3 cuts by year-end. Empire State Manufacturing Index Plummets A key manufacturing gauge plummeted in May. The Empire State’s manufacturing index plunged 42.6 points to negative 31.8. That was sharply lower than expectations for a reading of negative 5 and reversed the gain seen in April. The shipments index plunged 40.3 points to negative 16.4 and unfilled orders fell 13.2 points to negative 13.2. But the six-month expectations index improved by 3.2 points to 9.8.
Continue Reading -->7 Tech Names to Watch This Week
SPY keeps playing with levels. Last week it couldn’t build on strength and sellers couldn’t keep it below levels. We’ll see how this week starts. $413.64 is Friday’s high. See if it gets and stays above. $414.54 is above. The bears can’t growl so loud this week unless we get a hard close below $408.64. QQQ’s hit a high of $327.17 last week as some specific setups worked. The 8 day is key active support. We’ll see if this sector can keep getting flows. It needs to hold the $322ish area to stay special. Now let’s dig into 7 tech leaders: AAPL continues to digest post-earnings. On Friday if felt vulnerable but it held the earnings gap. If you are super active, make sure it holds $170.76-$171 support. If it doesn’t, it can get choppier and harder to sit with. $174.59 is key active resistance. MSFT remains Very Impressive. Whenever you think it gets vulnerable, it holds the 8 day. It needs to hold the $306 area. If that holds, perhaps it tries to get going again with $313 as pivot resistance. GOOGL was a big focus for us last week. I got big around $107ish and it hit $117.92 Friday. I did sell my stock and switched to some call as it seemed stretched. Loop Capital called it a hold today. Let.s see how it digests. Holding $114.41-$116 would keep momentum. AMZN was another focus for us. I got pretty big in the $105 area and then sold the rest into the $113+ area last week. Now, we’ll see if it can build a bull flag above $109ish to give us more opportunities. META is trying to set up again after hitting a high of $244 a few weeks back. Some are long vs. the $229 gap pivot. If it can get and stay above $238, maybe it gets some active momentum back again. Loop Capital raised it this morning. TSLA couldn’t hold the Friday gains even with Elon saying they will have a new Twitter CEO faster than some thought. I did sell most of mine into the $177 gap fill. Then it failed to hold $174 with a low of $166ish. It’s flattish this morning. It’s hard to tell what’s next. If it breaks and stays below $166ish, the bears will growl loud. I’m just going to watch it for now. NVDA is trying to hold the 8 day. This tech market leader can give clues to the week. It needs to hold the $280 area. Otherwise it can see downside. A move above $292ish tells us we can still have some special moves. Friday’s high is $287ish. Scott Redler Positions Disclosure as of 2023-05-15 at 8.26.28 AM
Continue Reading -->What’s On Tap for Traders: May 15-19
Welcome to your weekly trading preview! Use the Table of Contents to jump around: Table of Contents This Week’s Trading CalendarThe Week in Review…A Busier Stream of Econ DataRetail Earnings TimeSo How Has Earnings Season Been?Traders Are Still in a Bad MoodA Look at Sector Performance in 2023:Factoid of the Week: The Best Traders on Earth are in the US CongressGet to Know JR Romero This Week’s Trading CalendarClick the calendar image to enlarge it, then scroll down to see what’s coming down the pipe the week of May 15: The Week in Review…What a week! We survived:Earnings whiffs from Disney (DIS), PayPal (PYPL), AirBnB (ABNB), Wynn (WYNN)US CPI & PPI reportsA giant pop & drop in Tesla (TSLA) FridayThe major indices were mostly down this week, but the QQQ’s managed to squeeze into the green.(data as of 2 p.m. Friday) And year-to-date, the QQQ’s are still crushing the other big ETFs thanks to huge moves in big tech stocks like Apple (AAPL), Tesla (TSLA), Nvidia (NVDA), and Microsoft (MSFT). Even with Friday’s ugly outside day, it’s been pretty smooth sailing this year:Now let’s look forward to next week. A Busier Stream of Econ DataThe US economic calendar picks up next week with:Monday: NY Empire State ManufacturingTuesday: Industrial Production, Business Inventories, Retail Inventories, Fed’s Williams speaksWednesday: Building Permits, Housing StartsThursday: Jobless Claims, Philly Fed, Existing Home SalesThe big discussion on the Street is whether the Fed can slow the economy without breaking it.So everyone will be watching these reports for a better idea of where the US economy stands.After this week’s light CPI and PPI reports, traders are pricing in a slightly higher probability of a Fed Rate hike at the June 14 meeting.As of Friday afternoon, traders were pricing in a 16.6% probability of a June rate hike, up from 10.7% last week. That’s thanks to this week’s light CPI and PPI reports, which showed continued moderation in inflationary pressures.Only a moron would argue that inflation is low.But it is less awful.And overseas, we get:Monday: Switzerland PPI, Canadian Housing Starts & Whole Sale Sales, China Industrial Production & UnemploymentTuesday: Great Britain Employment, EU GDP, Italy CPI, Canada CPI, Japan GDPWednesday: EU CPI, Japan Industrial Production, New Zealand PPI, Australia EmploymentThursday: Canada Housing Prices, Japan CPIFriday: Germany PPI, Canada Retail sales Retail Earnings TimeEarnings season is pretty much done, but we’ve got some big retail reports on tap:Tuesday: Home Depot (HD)Wednesday: Target (TGT), TJ Maxx (TJX)Thursday: Walmart (WMT), Ross Stores (ROST)Friday: Foot Locker (FL)This earnings season has been all over the place for consumer stocks. We’ve seen some huge hits (like Apple) and some big misses (like Disney) Nonetheless, Walmart and Target should give us fresh insights on the consumer. Outside of retail, we have Baidu (BIDU) on Tuesday, Cisco on Wednesday (CSCO), and Applied Materials (AMAT) on Thursday. So How Has Earnings Season Been?As we noted last week, earnings season is pretty strong relative to expectations. According to FactSet, 92% of S&P 500 companies have reported, and so far:78% of companies beat EPS estimates75% of companies have beaten revenue estimates.Earnings have declined by -2.5% vs. expectations for a -6.7% declineSo earnings stink, but they’re not as bad as expected. Which is why the market’s been up this year. Traders Are Still in a Bad MoodInvestors and traders remain remarkably bearish despite the market’s stability. According to AAII, just 29.4% of investors are bullish. That’s up from 24.1% the past two weeks, but well below the 37.5% long-term average. AAII said “pessimism among individual investors stayed above average for the 12th consecutive week.” A Look at Sector Performance in 2023:Click to enlargeIt’s the same old story. Housing (ITB) is winning which it’s not supposed to do in a rising rate environment, which could be related to traders pricing in rate cuts later this year. And tech is pretty strong with XLK, SMH, and ARKK all up 20% YTD. Meanwhile, Natural Gas (UNG), Banks (XLF, KRE), Energy (XLE, OIH), and Cannabis (MSOS) have lagged, big time. Factoid of the Week: The Best Traders on Earth are in the US CongressAccording to Unusual Whales, Alabama Senator Tommy Tuberville is quite the active options trader:BREAKING: Senator Tommy Tuberville has just sold millions in stock and options.He sold puts on $TXN, $KR, $HPQ, $PARA, $AMT, and sold 50k in puts on $TSLA, $CSCO and $MSFTAnd much more.He appears to using options while in Congress.Wild.— unusual_whales (@unusual_whales) May 12, 2023 Interestingly, two opposing members of Congress — Matt Gaetz and Alexandria Ocasio-Cortez — are teaming up to ban members of Congress from trading or owning stocks. Because Paul Tudor Jones or Richard Dennis have nothing on this crew:BREAKINGI have just released the full trading report on politicians in 2022.Despite 2022 being the worst market since 2008, both Democrats & Republicans beat the market.Many politicians individually beat the market.And many made unusual trades resulting in huge gains. pic.twitter.com/qDWIJB2spk— unusual_whales (@unusual_whales) January 3, 2023 Get to Know JR RomeroHow did JR Romero go from code to pro trader & VTF® moderator.
Continue Reading -->Coffee With Greta: Debt Ceiling Crisis Looms
DJIA Futures: +124 (+0.4%) SPX Futures: +14 (+0.3%) NASDAQ Futures: +26 (+0.2%) Good morning friends! Futures are higher as regional bank stocks attempt to rebound. Let’s get right to it! Debt Ceiling Meeting Delayed A meeting on the debt ceiling originally slated for today has been pushed to early next week. President Biden was set to host the big four Congressional leaders at the White House today for the second round of talks this week. But sources say the meeting has now been pushed to next week. This comes after negotiations on Tuesday failed to make any progress. House Speaker Kevin McCarthy is demanding spending cuts in exchange for a debt ceiling hike while Democrats says that’s a non-starter. Sources told NBC that the delay in today’s meeting is a positive sign. They said, “Meetings are progressing. Staff is continuing to meet and it wasn’t the right moment to bring it back to principals.” Treasury Secretary Janet Yellen says the U.S. will run out of money as early as June 1. Regional Bank Bounce Back Regional bank stocks are rebounding today after tumbling again on Thursday. PacWest Bancorp (PACW) shares are up 0.4% in premarket trade after plunging 22.7% on Thursday. The SPDR S&P Regional Banking ETF (KRE) is up 0.7%. Regional banks have seen extreme volatility in recent weeks as traders wonder which might be the next to fail. Tesla Jumps After Musk’s Twitter CEO Announcement Tesla (TSLA) shares are up 2.3% ahead of the open after CEO Elon Musk said in a tweet that he has hired a new CEO for Twitter. Musk said, “Excited to announced that I’ve hired a new CEO for X/Twitter. She will be starting in ~6 weeks! My role will transition to being exec chair & CTO, overseeing product, software & sysops.” The news is good for Tesla shareholders who have previously felt like Twitter is a distraction for Musk. In April, a group of shareholders publicly called for Tesla’s board to ensure he would dedicate more time to the electric vehicle company. Import Prices Jump U.S. import prices rose more than expected in April. The Bureau of Labor Statistics’ import price index rose 0.4% vs 0.3% expected. It was the first monthly increase of 2023 but prices were still down 4.8% annually. Imported fuel prices jumped 4.5% last month, the first increase since June 2022. Import prices excluding fuel were flat. Export prices also rose 0.2% in April but were down 5.9% year over year. In Case You Missed It Peloton (PTON) shares tumbled 8.9% on Thursday after 2.2 million of its fitness bikes were recalled in the U.S. The Consumer Product Safety Commission issued the recall over injury and fall concerns. The CPSC claims the seat post on the Model Number PL01 bikes can detach and break unexpectedly during use. Peloton has reportedly received 25 reports of unexpected breakages since January 2018, including 12 reported injuries.
Continue Reading -->Coffee With Greta: More Good Inflation News
DJIA Futures: -128 (0.4%) SPX Futures: -3 (-0.1%) NASDAQ Futures: +33 (+0.3%) Good morning friends! Futures are mixed as traders digest more inflation data, jobs data, and earnings. Let’s get right to it! Wholesale Inflation Eases U.S. wholesale inflation pressures cooled more than expected in April, in a sign that consumer prices will continue to fall. The Bureau of Labor Statistics’ producer price index rose 0.2% last month and 2.3% year over year. That was better than expectations for +0.3% monthly and +2.5% annually. It was also the lowest annual reading since January 2021. The core PPI rose 0.2% monthly and 3.2% annually, in line with expectations on a monthly basis and better than 3.3% annually expected. Weekly Jobless Claims Jump Weekly jobless claims jumped last week to a nearly two-year high. The Labor Department reported 264,000 Americans filed initial claims for unemployment benefits. That was up by 22,000 from the previous week and higher than 245,000 expected and the highest level since October 2021. The data is a sign of tightening in the labor market, which is what the Fed wants to see. Continuing claims fell by 63,900 to 1.72 million in the week ending April 22. PacWest Deposits Tumble PacWest Bancorp (PACW) shares are plunging 18.9% in premarket trade after the regional bank revealed a steep drop in deposits last week. In an SEC filing today, PACW said deposits declined 9.5% during the week of May 5. But the bank said it was able to fund all of the withdrawals with available liquidity. PacWest said it now has $15 billion of available liquidity vs $5.2 billion in uninsured deposits. The latest drop in deposits comes on top of the 16.9% decline the bank reported in Q1. Disney Falls As Subscriber Numbers Drop Walt Disney (DIS) shares are down 5.3% ahead of the open after the company reported fiscal Q2 results that were in line with expectations, but subscriber numbers declined. Here’s how the entertainment company’s results compared to analysts’ estimates: EPS: $0.93, as expected Revenue: $21.82 billion vs $21.78 billion expected Disney+ subscribers: 157.8 million vs 163.17 million expected The company lost 4 million Disney+ subscribers, or 2%, during the quarter. But Disney’s streaming losses were better than estimates at $659 million vs $841 million expected. But the parks, experiences, and products divisions were a bright spot as revenue jumped 17% to $7.7 billion. About $5.5 billion of that revenue was from Disney’s theme park locations. Robinhood Jumps After Earnings Beat Robinhood (HOOD) shares are up 3.9% in premarket trade after beating Q1 expectations on the top and bottom line. Here’s how the online broker’s results compared to analysts’ estimates: Loss per share: $0.57 vs $0.62 expected Revenue: $441 million vs $425 million expected Robinhood added 120,000 customers during the quarter, bringing the total to 23.1 million vs 23.05 million expected. The company made more money on deposits last quarter than trading, as it offered above-average interest rates. And stock-trading declined with monthly active users falling 26% year over year to 11.8 million. Robinhood announced it will allow 24 hour trading, Monday through Friday, on a select group of stocks starting next week.
Continue Reading -->Coffee With Greta: Inflation Is Cooling
DJIA Futures: +144 (+0.4%) SPX Futures: +29 (+0.7%) NASDAQ Futures: +103 (+0.8%) Good morning friends! Futures are jumping after a better-than-expected inflation report. Let’s get right to it! CPI Cools More Than Expected U.S. inflation pressures cooled more than expected in April. The Bureau of Labor Statistics’ consumer price index rose 0.4% monthly and 4.9% year over year. That monthly gain was in line with expectations and cooler than 5% annually expected. Used cars and gas prices saw the largest increases last month, up 4.4% and 2.7% respectively from March. The core CPI rose 0.4% monthly and 5.5% year over year, in line with estimates. I’m hosting a free Q&A with Scott Redler after the market close today to discuss the reaction to the CPI and more inflation data on the way. Register for free now! (*you must login to LinkedIn to sign-up) Airbnb Plunges On Q2 Warning Airbnb (ABNB) shares are plunging 14.2% ahead of the open after beating Q1 expectations but issuing weak Q2 guidance. Here’s how the company’s results compared to analysts’ estimates: EPS: $0.18 vs $0.09 expected Revenue: $1.82 billion vs $1.79 billion expected Revenue rose 20% year over year and it was the first time Airbnb has been profitable in Q1 on a GAAP basis. The company said it had a “strong start” to the year and it’s looking forward to another “strong summer travel season”. But Airbnb also warned, “Nights and Experiences Booked will have unfavorable year-over-year comparisons in Q2 2023 as we overlap pent-up 2022 demand following the COVID Omicron variant.” The company forecast Q2 revenue between $2.35 billion and $2.45 billion vs analysts’ expectations for $2.42 billion. Rivian Jumps After Q1 Earnings Beat Rivian (RIVN) shares are jumping 8.9% in premarket trade after beating Q1 expectations and reaffirming its 2023 production target. Here’s how the electric truckmaker’s results compared to analysts’ estimates: Adjusted loss per share: $1.25 vs $1.59 expected Revenue: $661 million vs $652.1 million expected Rivian said it is still on track to meet its 50,000 vehicle production target for 2023. Roblox Flat After Missing Q1 Expectations Roblox (RBLX) shares are up 0.3% in premarket trade after reporting a wider loss and lower revenue than expected in Q1. Here’s how the video game company’s results compared to analysts’ estimates: Loss per share: $0.44 vs $0.40 expected Revenue: $774 million vs $766 million expected Roblox’s average daily active users jumped 22% year over year to 66 million while engagement hours rose 23% to 14.5 billion. Mortgage Demand Jumps After Fed Meeting Mortgage demand jumped last week after the Fed seemed to signal a pause in rate hikes. The Mortgage Bankers Association reported purchase applications rose 5% weekly and were 32% lower than a year ago. Refinance applications jumped 10% weekly and were down 44% annually. The average 30-year contract fixed rate fell to 6.48% from 6.5% the previous week. In Case You Missed It The President and top Congressional leaders appeared to make no progress on a debt ceiling deal Tuesday. Biden plans to host another meeting with the “big four” from Congress on Friday. He told reporters after Tuesday’s meeting, “Everyone in the meeting understood the risk of default. I made clear during our meeting that default is not an option.”
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