Coffee With Greta: Traders On Edge
DJIA Futures: -339 (-1%) SPX Futures: -39 (-0.9%) NASDAQ Futures: -149 (-1.2%) Good morning friends! Futures are falling as traders remain on edge about inflation and digest some disappointing corporate guidance. Let’s get right to it! Yields Climb As New Week Kicks Off Treasury yields are climbing this morning as a new week kicks off with traders worried about inflation. The 2-year yield is up 6 basis points to 4.69% while the 10-year yield is up 8 basis points to 3.90%. The market will get more details on the Fed’s latest meeting and future plans later this week. The central bank is set to release the minutes of its February 1 meeting on Wednesday afternoon. The Fed’s favorite inflation gauge, the PCE price index, will also come out on Friday morning. That data comes after both the CPI and PPI rose more than expected in January. Walmart Slides On Weak Outlook Walmart (WMT) shares are falling 2.7% in premarket trade after beating Q4 expectations but issuing weak guidance. Here’s how the retailer’s results compared to analysts’ estimates: Adjusted EPS: $1.71 vs $1.51 expected Revenue: $164.05 billion vs $159.72 billion expected Revenue rose 7.3% year over year while same-store sales in the U.S. jumped 8.3%. Walmart also made progress on getting rid of inventory with levels roughly flat compared to a year ago and down 3% in the U.S. But the company issued soft guidance as it expects inflation to continue pressuring consumers this year. Walmart forecast full-year adjusted EPS between $5.90 and $6.05 vs analysts’ estimates of $6.53. The CEO said, “If you look at economic indicators, balance sheets are running thinner and savings rates are declining relative to previous periods. And so that’s why we take a pretty cautious outlook on the rest of the year.” Home Depot Drops After Revenue Miss, Weak Guidance Home Depot (HD) shares are down 4.4% in premarket trade after reporting mixed Q4 results and issuing a weak outlook. Here’s how the home improvement retailer’s results compared to analysts’ estimates: EPS: $3.30 vs $3.28 expected Revenue: $35.83 billion vs $35.97 billion expected It was the first time Home Depot has missed sales expectations since November 2019. The company attributed that miss to lower lumber prices which impacted comparable sales by 0.7%. Home Depot said it expects earnings per share to decline by a mid-single-digit percentage this year, falling short of analysts’ expectations for EPS to be flat. The company also expects full-year sales to be flat vs analysts’ projections for a slight increase. Home Depot also announced it will spend $1 billion to give hourly workers a raise. Existing Home Sales Expected To Rise The National Association of Realtors reports January existing home sales at 10:00 a.m. ET. That data is expected to show sales rose at the start of the year to a seasonally adjusted annual rate of 4.12 million units. It would be the first monthly increase in sales in 11 months. That expectation comes after pending home sales rose 2.5% in December.
Continue Reading -->Coffee With Greta: Inflation Fears Spook Traders
DJIA Futures: -111 (-0.3%) SPX Futures: -23 (-0.6%) NASDAQ Futures: -91 (-0.7%) Good morning friends! Futures are dropping as Treasury yields jump amid new fears about inflation and the Fed’s response. Let’s get right to it! Yields Pop After Fed Comments U.S. Treasury yields are rising this morning as concerns rise about the Fed continuing rate hikes due to persistently high inflation. The 2-year Treasury yield is up 7 basis points to 4.67% while the 10-year yield is surging 24 basis points to 3.89%. The jump comes after the January PPI came in way hotter-than-expected on Thursday and Fed officials put their support behind continued rate hikes. Cleveland Fed President Loretta Mester said in a speech Thursday that she would have preferred a 50 basis point rate hike at the last meeting. She said, “The upside risks to inflation and historical experience suggest to me that the costs of undershooting on policy or prematurely loosening policy still outweigh the costs of overshooting.” St Louis Fed President James Bullard echoed that sentiment in a later speech, saying he is advocating for a 50 basis point hike at the March meeting. He said, “continued policy rate increases can help lock in a disinflationary trend during 2023, even with ongoing growth and strong labor markets, by keeping inflation expectations low.” The two are not voting members of the FOMC in 2023. DoorDash Reports Best Quarter Ever DoorDash (DASH) shares are up 3.8% ahead of the open after reporting mixed Q4 results. Here’s how the delivery platform’s results compared to analysts’ expectations: Loss per share: $1.65 vs $0.67 expected Revenue: $1.8 billion vs $1.77 billion expected Adjusted Ebitda: $117 million vs $109 million expected DoorDash said the loss was caused by impairment charges related to its acquisition of Europe-based delivery company Wolt and stock-based compensation related to layoffs announced in December. The company had a record 467 million orders in Q4 with a gross order value of $14.4 billion, topping analysts’ estimates. For the full year, DoorDash reported a net loss of $1.37 billion on revenue of $6.58 billion. That compared to analysts’ expectations for a $989 million loss on $6.55 billion in revenue. DoorDash ended 2022 with 32 million monthly active users, up by 7 million from the end of 2021. The company forecast Q1 adjusted Ebitda of $120 million to $170 million and gross order value of $15.1 billion to $15.5 billion. That topped analysts’ outlook for $128 million in Ebitda and gross order value of $15 billion. DraftKings Surges On Record Revenue, Stronger Guidance DraftKings (DKNG) shares are rallying 11.9% in premarket trade after reporting record revenue in Q4 and hiking its 2023 guidance. Here’s how the online sports betting company’s results compared to analysts’ expectations: Loss per share: $0.53 vs $0.62 expected Revenue: $855.1 million vs $801 million expected It was the first quarter DraftKings cleared $800 million in quarterly revenue. The company raised its 2023 revenue guidance to $2.85 billion to $3.05 billion amid optimism as more states legalize sports gambling. In Case You Missed It Tesla (TSLA) shares dropped 5.7% on Thursday after the automaker issued a massive recall. The EV maker recalled 362,758 vehicles due to an issue with the Full Self-Driving Beta software. The National Highway Traffic Safety Administration said that software may increase the risk of crashes by allowing the vehicles to “exceed speed limits or travel through intersections in an unlawful or unpredictable manner.” Tesla will release an over-the-air software update to fix the issue.
Continue Reading -->Coffee With Greta: Stocks Slide After More Hot Inflation Data
DJIA Futures: -282 (-0.8%) SPX Futures: -49 (-1.2%) NASDAQ Futures: -186 (-1.5%) Good morning friends! Futures are dropping after the release of more hot inflation data. Let’s get right to it! Wholesale Inflation Runs Hot Wholesale inflation pressures came in way hotter than expected in January. The Bureau of Labor Statistics’ producer price index jumped 0.7% monthly and 6% year over year. That was sharply higher than economists’ expectations for a 0.4% monthly gain and the largest jump since June. Energy prices saw the largest gain, surging 5% monthly. The core PPI also rose more than expected, up 0.5% monthly vs 0.3% expected. This data is bad news for traders hoping for a Fed pivot soon as PPI is a leading indicator for consumer prices in the months ahead. Housing Starts Tumble U.S. home construction slowed more than expected in January. The Census Bureau reported housing starts dropped 4.5% last month to a seasonally adjusted annual rate of 1.31 million units vs 1.35 million expected. That’s the lowest annual rate since June of 2020 and starts were down 21.4% year over year. Single-family starts fell 4.3% while multi-family starts dropped 5.4%. Building permits were relatively unchanged for the month, up just 0.1% to a seasonally adjusted annual rate of 1.34 million units vs 1.35 million expected. That signals the slowdown in building will continue. Weekly Jobless Claims Fall Unexpectedly Weekly jobless claims fell unexpectedly last week, remaining under 200,000 for the fifth straight week. The Labor Department reported 194,000 Americans filed initial claims for unemployment benefits. That was down by 1,000 from the previous week and better than expectations for an increase to 200,000. Continuing claims meantime rose by 16,000 to 1.70 million in the week ending February 4. Roku Rallies After Earnings Beat, Strong Guidance Roku (ROKU) shares are up 9.2% ahead of the open after beating Q4 expectations on the top and bottom line and issuing strong guidance. Here’s how the streaming giant’s results compared to analysts’ expectations: Loss per share: $1.70 vs $1.72 expected Revenue: $867 million vs $803 million expected Roku said it had 70 million active streaming accounts during the quarter, up from 65.4 million in Q3 and better than 69 million expected. Streaming hours also jumped to 23.9 billion from 21.9 billion in Q3 and higher than 23.2 billion expected. Roku forecast Q1 revenue of $700 million beating analysts’ estimates of $692 million. Cisco Tops Earnings Estimates, Hikes Guidance Cisco (CSCO) shares are 3.2% higher in premarket trade after topping fiscal Q2 expectations and hiking its full-year guidance. Here’s how the computer networking company’s results compared to analysts’ expectations: Adjusted EPS: $0.88 vs $0.86 expected Revenue: $13.59 billion vs $13.43 billion expected Total revenue jumped 7% year over year and the CEO said “demand remains stable.” Cisco expects fiscal Q3 adjusted EPS of $0.96 to $0.98 and 11% to 13% revenue growth. That topped analysts’ outlook for adjusted EPS of $0.89 and 6% revenue growth to $13.58 billion. The company also lifted its 2023 guidance, now expecting $3.73 to $3.78 in adjusted EPS and 9$ to 10.5% revenue growth. In Case You Missed It Homebuilder sentiment improved by the largest amount in more than a decade this month. The National Association of Homebuilders’ sentiment index jumped 7 points to 42. That was better than expectations for 37. Anything below 50 is still considered negative but it’s the highest reading since September and largest monthly gain since June 2013. Sentiment about current sales conditions rose 6 points to 46, 6-month sales expectations jumped 11 points to 48, and buyer traffic improved by 6 points to 29. Builders are feeling more confident about the market as buyer demand picks up heading into spring.
Continue Reading -->Momentum Trading 101
JR Romero explains how momentum trading works through a simple series of price action lessons. Learn simple technical analysis methods for: Understanding the true nature of momentum in stocks and etfs How to use past momentum to predict future momentum Why the stock market likes symmetry The law of cause and effect in trading
Continue Reading -->Coffee With Greta: Stocks Slip As Retail Sales Surge
DJIA Futures: -100 (-0.3%) SPX Futures: -13 (0.3%) NASDAQ Futures: -23 (-0.2%) Good morning friends! Futures are falling after the release of more hotter-than-expected economic data. Let’s get right to it! January Retail Sales Smash Expectations Retail sales were stronger than expected at the start of 2023 as consumers remain resilient despite inflation. The Commerce Department reported retail sales jumped 3% in January to $697 billion. That was sharply higher than expectations for a 1.9% increase and was the largest monthly increase since March 2021. Excluding autos, retail sales rose 2.3% vs 0.9% expected. Restaurants and bars saw the largest increase in spending, up 7.2% monthly and 25.2% year over year. Sales at auto dealers jumped 6.4% monthly and 2.5% annually. The data is not adjusted for inflation and the increase is partly due to consumers paying higher prices. The report supports the Fed’s plan to continue raising rates to lower inflation and slow consumer spending. Roblox Rallies On Q4 Earnings Beat Roblox (RBLX) shares are surging 17.7% ahead of the open after beating Q4 expectations. Here’s how the video game company’s results compared to analysts’ expectations: Adjusted loss per share: $0.48 vs $0.50 expected Bookings: $899.4 billion vs $871.2 billion The CFO said, “Bookings accelerated meaningfully in December and January, with year over year growth exceeding 20% in both months. Growth was strong across all geographies and age groups with particular strength among users above 17 years old.” Roblox said that growth has continued in the new year with January’s estimated bookings between $267 million and $271 million, up 22% to 24% from a year ago. Average daily users in January were 65 million vs 61.5 million in December. Airbnb Reports First Profitable Year Airbnb (ABNB) shares are rallying 9% in premarket trade after reporting record Q4 results and strong guidance. Here’s how the company’s results compared to analysts’ estimates: EPS: $0.48 vs $0.26 expected Revenue: $1.9 billion vs $1.86 billion expected Adjusted ebitda: $506 million vs $434 million expected For the full year, Airbnb reported a profit of $1.89 billion on $8.4 billion in revenue. That topped analysts’ expectations for $1.74 billion in profit on $8.36 billion in revenue. In a letter to shareholders, the company said, “All regions saw material growth in 2022 as guests increasingly crossed borders and returned to cities on Airbnb.” Airbnb forecast Q1 revenue between $1.75 billion and $1.82 billion vs $1.68 billion expected. Mortgage Demand Drops Mortgage demand dropped last week as rates jumped higher. The Mortgage Bankers Association reported total application volume fell 7.7% last week. That came as the average 30-year fixed contract rate rose to 6.39% from 6.18%. Refinance applications tumbled 13% weekly and 76% year over year. Purchase applications were down 6% weekly and 43% annually. Homebuilder Sentiment Expected To Improve The National Association of Homebuilders releases its sentiment index for February at 10:00 a.m. ET. That survey is expected to rise to 37 from 35 in January. Although that would still represent negative sentiment among builders, it would be the second straight monthly increase and 12 consecutive months of decline. In Case You Missed It Ford (F) shares slipped 0.9% on Tuesday after the company halted production and shipments of the F150 Lightning. The automaker said that pause was due to a potential battery issue found during pre-delivery quality inspections. A Ford spokeswoman said, “The team is diligently working on the root cause analysis” and the company is “doing the right thing by our customers”.
Continue Reading -->Coffee With Greta: Stocks Fall Flat On Hot CPI
DJIA Futures: +39 (+0.1%) SPX Futures: +5 (+0.1%) NASDAQ Futures: +8 (+0.1%) Good morning friends! Futures are flat after the January CPI came in hotter than expected. Let’s get right to it! CPI Runs Hot U.S. inflation pressures rose more than expected at the start of 2023. The Bureau of Labor Statistics’ consumer price index jumped 0.5% in January and 6.4% year over year. That was higher than economists’ expectations for a 0.4% monthly and 6.2% annual gain. But it was still cooler than the 6.5% annual gain in December. Rising shelter costs drove that gain, up 0.7% monthly and 7.9% year over year. Consumers also paid higher prices for food and energy. Grocery prices were up 0.4% monthly and 11.3% annually while gas prices rose 2.4% monthly and 1.5% year over year. The core CPI, which excludes food and energy, rose 0.4% monthly and 5.6% annually. That was also hotter than expectations for 0.3% monthly and 5.5% annually. The higher prices translated into a loss in real pay for workers. Average hourly earnings fell 0.2% monthly and 1.8% year over year when adjusted for inflation. Higher Prices Boost Coca-Cola Earnings Coca-Cola (KO) shares are up 0.3% ahead of the open after topping Q4 expectations. Here’s how the beverage giant’s results compared to analysts’ expectations: Adjusted EPS: $0.45, as expected Revenue: $10.13 billion vs $10.02 billion expected Coke said its unit case volume fell 1% in Q4 as higher prices hurt demand. Prices were up 12% year over year and the company sold a more expensive mix of drinks during the quarter. The company forecast comparable revenue growth of 3% to 5% in 2023 and EPS growth of 4% to 5%. The revenue outlook was in line with expectations while the earnings outlook was better than expected. Palantir Reports First Profitable Quarter Palantir Technologies (PLTR) shares are surging 15% in premarket trade after beating Q4 expectations and reporting its first profitable quarter ever. Here’s how the software company’s results compared to analysts’ expectations: Adjusted EPS: $0.04 vs $0.03 expected Revenue: $509 million vs $502 million expected Revenue jumped 18% year over year with U.S. commercial revenue up 12%. Palantir grew from 80 U.S. commercial customers a year ago to 143 in Q4. The CEO said, “With this result, Palantir is profitable. This is a significant moment for us and our supporters.” The company forecast Q1 revenue between $503 million and $507 million and full-year revenue between $2.18 billion and $2.23 billion. Marriott Beats Q4 Expectations, Issues Strong Guidance Marriott (MAR) shares up 0.5% ahead of the open after beating Q4 expectations on the top and bottom line and issuing strong guidance. Here’s how the hotel chain’s results compared to analysts’ expectations: Adjusted EPS: $1.96 vs $1.83 expected Revenue: $5.9 billion vs $5.37 billion expected Revenue per available room was up 5% compared to pre-pandemic levels and jumped 29% year over year. That increase was driven by an 11% jump in the average daily room rate in the U.S. and Canada. Marriott’s CEO said, “As we look ahead, while concerns about the macroeconomic environment persist around the world, booking trends remain robust and we have significant momentum in our business.” The company forecast Q1 EPS of $1.82 to $1.88 vs $1.65 expected. For the full year, Marriott forecast a profit of $7.23 to $7.91 per share vs $7.44 expected. In Case You Missed It Americans’ short-term inflation expectations remained stable at the start of 2023. The New York Fed’s released its January survey of consumer expectations on Monday. Respondents said they believe inflation will be at 5% 1-year from now, unchanged from December. Consumers expect inflation to be at 2.7% 3-years from now vs 2.9% in December. But the 5-year projection ticked higher to 2.5% from 2.4%. Ford (F) shares jumped 2.8% on Monday after the company unveiled plans to build a new EV battery plant. The automaker announced it will spend $3.5 billion to build that plant in Michigan with a Chinese supplier, CATL. The plant is expected to create 2,500 jobs and begin production in 2026. Ford will manufacture lithium iron phosphate batteries at the facility and says it will be the first U.S. automaker to make those batteries in the U.S.
Continue Reading -->3 New Names on the Radar
We have flattish markets around the world ahead of the CPI tomorrow. Markets are trying to get comfortable with Fed expectations of a ceiling at 5.19% and a year-end 4.9% target. So far it seems like the world is handling 5% rates okay. Most experts predicted a big recession by now. SPX pulled back 100 handles of fthe 4195 highs. Does it start a downside active sequence, or is it just a digestion phase? That’s the question. We should know more tomorrow after the CPI tomorrow. L SPY hit a high of $418.31 on Feb 2 and made a low of $405 Friday. A bit of momentum was lost, but the more intermediate trend is still intact. Tomorrow’s CPI will be important. There’s risks to both longs and shorts. $410-$411 will be resistance if we rally. Now let’s dig into 3 individual names I typically don’t cover in the Morning Note: SMCI seems like it has a decent setup. Some are long vs. the 8 day down near $82ish. Others are waiting for a move and hold above $93.90ish. SSTK has a decent setup. Some are long vs. $72. Others are waiting for it to get and stay above $81.25. GILD has a nice chart. Some are long vs. $85. Others are waiting for it to get and stay above $87.18 Scott Redler’s positions disclosure as of 2023-02-13 at 8.35.09 AM
Continue Reading -->Coffee With Greta: CPI Week Begins
DJIA Futures: +1 (+0.01%) SPX Futures: +6 (+0.1%) NASDAQ Futures: +50 (+0.4%) Good morning friends! Futures are mostly higher as traders look to rebound from the worst week since December and look ahead to key inflation data. Let’s get right to it! Inflation Week Begins It’s inflation week yet again with traders awaiting the January CPI. That data will be released by the Bureau of Labor Statistics Tuesday morning at 8:30 a.m. ET. Headline inflation is expected to have risen 0.4% monthly and 6.2% annually at the beginning of 2023. The core CPI is expected to rise 0.3% monthly and 5.4% year over year. The data will give traders more insight on the impact of the Fed’s rate hikes so far after the Fed chair said the “disinflationary process has begun”. The first piece of key inflation data will come later today with the release of the New York Fed’s survey of consumer expectations at 11:00 a.m. ET. The market is focused on the 1-year and 5-year inflation expectations in that survey. Another Big Earnings Week On top of the inflation data in focus this week, the market will also continue to digest more Q4 earnings. Here’s some of the key companies scheduled to report: Tuesday AM: Coca-Cola (KO), Marriott (MAR) Tuesday PM: Airbnb (ABNB) Wednesday AM: Kraft Heinz (KHC), Roblox (RBLX) Wednesday PM: Cisco (CSCO), Shopify (SHOP), Roku (ROKU) Thursday AM: Hasbro (HAS) Thursday PM: DoorDash (DASH), DraftKings (DKNG) Meta Planning More Layoffs Meta Platforms (META) shares are up 2.3% ahead of the open amid reports the company is planning another round of layoffs. The Financial Times reported the social media giant has delayed finalizing the budgets of several teams as it prepares for more layoffs. Those cuts would be on top of the 11,000 employees let go by Meta in November. Meta has not confirmed the report and it’s unclear how big the next round of cuts could be. Ford EV Announcement Coming Up Ford (F) shares are 0.1% higher in premarket trade ahead of an EV announcement today. The automaker announced Sunday that it had something to say about “its plan to rapidly scale EVs and make them more accessible to customers”. Ford is scheduled to host a streaming event at 1:45 p.m. ET. Analysts are betting the company will announce a new battery plant with Contemporary Amperex Technology Co. Ford said last summer it was exploring batteries based on the company’s technology and it planned to localize lithium iron phosphate battery production in North America.
Continue Reading -->Coffee With Greta: Slide Continues
DJIA Futures: -93 (-0.3%) SPX Futures: -17 (-0.4%) NASDAQ Futures: -85 (-0.7%) Good morning friends! Futures are falling with the S&P 500 on track for its worst week in 2 months. Let’s get right to it! PayPal Beats Q4 Expectations, CEO Retiring PayPal (PYPL) shares are up 1% ahead of the open after beating Q4 profit expectations and announcing its CEO’s departure. Here’s how the digital payment company’s results compared to analysts’ estimates: Adjusted EPS: $1.24 vs $1.20 expected Revenue: $7.38 billion vs $7.39 billion expected The results were in line with PayPal’s previous outlook. The company forecast 7.5% revenue growth in Q1 and adjusted EPS to range between $1.08 to $1.10. It expects to book an estimated restructuring charge of $100 million in Q1 related to layoffs it announced in late January. PayPal also announced its CEO Dan Schulman will leave the company at the end of 2023 but will stay on as a member of the board. Schulman said, “I’m proud of what we have accomplished at PayPal and of the incredibly talented and committed people I work with every day. Together, we have reimagined financial services and e-commerce, and worked to improve the financial health of our customers.” Lyft Tanks On Weak Guidance Lyft (LYFT) shares are tumbling 31.1% in premarket trade despite reporting record Q4 revenue as the company’s outlook came in weak. Here’s how the rideshare giant’s Q4 results compared to analysts’ estimates: Adjusted loss per share: $0.74 vs $0.13 EPS expected Revenue: $1.18 billion vs $1.15 billion expected But the company said it only expects $975 million in Q1 revenue, falling short of analysts’ expectations for $1.09 billion. The CFO said, “Our Q1 guidance is the result of seasonality and lower prices, including less Prime Time.” Expedia Tumbles After Q4 Miss Expedia (EXPE) shares are falling 2.3% ahead of the open after missing Q4 expectations on the top and bottom line. Here’s how the company’s results compared to analysts’ expectations: Adjusted EPS: $1.26 vs $1.71 expected Revenue: $2.62 billion vs $2.69 billion expected Gross bookings: $20.51 billion vs $20.96 billion expected But Expedia blamed those weak results on severe weather seen across the U.S. at the end of Q4. The CEO said, “While our Q4 results were negatively impacted by severe weather, demand was otherwise strong and accelerating, and has been markedly stronger since the start of the year.” The company did not provide guidance. Coming Up: Consumer Sentiment The University of Michigan releases the early February reading of its consumer sentiment index at 10:00 a.m. ET today. That index is expected to improve to 65.1 from 64.9 at the end of January. The survey also includes consumers’ 1-year and 5-year inflation expectations. Those expectations have been a key metric both the market and the Fed are watching. In Case You Missed It Yahoo became the latest tech company to announce mass layoffs on Thursday. The company unveiled plans to cut 20% of its staff by year-end, including 1,000 layoffs by the end of this week. The Yahoo for Business unit will be slashed in half. GlobalFoundries (GFS) shares rallied 3.5% Thursday after signing a long-term supply agreement with General Motors (GM). That agreement makes GlobalFoundries GM’s exclusive semiconductor maker. GFS will establish dedicated production capacity for GM’s suppliers at its facility in upstate New york. GM said the agreement “will help establish a strong, resilient supply of critical technology in the U.S. that will help GM meet this demand while delivering new technology and features to our customers.”
Continue Reading -->Coffee With Greta: Disney Pops
DJIA Futures: +214 (+0.6%) SPX Futures: +32 (+0.8%) NASDAQ Futures: +156 (+1.2%) Good morning friends! Futures are higher with Disney shares popping after strong earnings. Let’s get right to it! Disney Beats Fiscal Q1 Expectations, Unveils Restructuring Walt Disney (DIS) shares are rallying 6.1% ahead of the open after beating fiscal Q1 expectations. Here’s how the entertainment giant’s results compared to analysts’ estimates: Adjusted EPS: $0.99 vs $0.78 expected Revenue: $23.51 billion vs $23.37 billion expected Disney+ Subscriptions: 161.8 million vs 161.1 million expected This is the first earnings report released by Disney since CEO Bob Iger resumed his executive role. In a statement, Iger said, “We believe the work we are doing to reshape our company around creativity, while reducing expenses, will lead to sustained growth and profitability for our streaming business, better position us to weather future disruption and global economic challenges, and deliver value for our shareholders.” Disney also announced plans to reorganize into three segments and cut thousands of jobs. Those divisions will be: Disney Entertainment ESPN Parks, Experiences, and Products Unit The company is also laying off 7,000 employees, representing about 3% of its workforce. Affirm Drops On Earnings Miss, Company Announces Layoffs Affirm (AFRM) shares are tumbling 15.4% in premarket trade after missing fiscal Q2 earnings on the top and bottom line. Here’s how the buy now, pay later company’s results compared to analysts’ expectations: Loss per share: $1.10 vs $0.95 expected Revenue: $400 million vs $416 million expected The CEO said, “A key operational misstep contributing to these results is that we began increasing prices for our merchants and consumers later in the year than we should have, and this process has taken us longer than we anticipated.” Affirm also announced it is cutting 19% of its workforce, effective immediately. The company expects $360 million to $380 million in fiscal Q3 revenue vs $418 million expected. For the full year, Affirm forecast $1.475 billion to $1.550 billion in revenue, down from its previous outlook for $1.6 billion to $1.675 billion. Price Hikes Boost PepsiCo Earnings PepsiCo (PEP) shares are up 1.5% ahead of the open after beating Q4 expectations on the top and bottom line. Here’s how the beverage maker’s results compared to analysts’ estimates: Adjusted EPS: $1.67 vs $1.65 expected Revenue: $28 billion vs $26.84 billion expected That beat came even as sales volume fell but consumers paid higher prices for PepsiCo snacks and drinks. Volume dropped 7% at Quaker Foods North America and fell 2% at its North American beverage division. PepsiCo expects 8% growth in earnings this year vs analysts’ expectations for 7.3% growth. The company also announced a 10% increase to its annual dividend and plans to repurchase $1 billion worth of shares this year. Weekly Jobless Claims Rise More Than Expected Weekly jobless claims rose more than expected in early February. The Labor Department reported 196,000 Americans filed initial claims for unemployment benefits last week. That was a 13,000 person increase from the week before and higher than 190,000 expected. Continuing claims also rose by 38,000 to 1.69 million in the week ending January 28. In Case You Missed It Alphabet (GOOGL) shares tumbled 7.7% on Wednesday after holding an event to showcase its new artificial intelligence chatbot called Bard. Google said it will begin rolling out the new technology in the coming weeks. The event also highlighted new AI improvements in other Google products like Maps and Lens. The reveal came one day after Microsoft (MSFT) hosted a similar AI event to unveil new updates to its Bing search engine.
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