Coffee With Greta: Earnings Ramp Up
DJIA Futures: +75 (+0.2%) SPX Futures: +11 (+0.3%) NASDAQ Futures: +31 (+0.3%) Good morning friends! Futures are rising as traders digest the latest batch of Q4 earnings and the Fed meeting is set to begin today. Let’s get right to it! General Motors Rallies After Smashing Q4 Expectations General Motors (GM) are jumping 4.7% ahead of the open after sharply beating Q4 expectations. Here’s how the automaker’s results compared to analysts’ expectations: Adjusted EPS: $2.12 vs $1.69 expected Revenue: $43.11 billion vs $40.65 billion expected GM’s full-year revenue came in at $156.7 billion with adjusted earnings before interest and tax hitting a record $14.5 billion. But profit margins are shrinking, the company’s adjusted profit margin fell to 9.2% in 2022, down 2.1% from the previous year. GM forecast 2023 adjusted EPS will be between $6 and $7. Although that would be lower than 2022, the outlook was above analysts’ expectations for adjusted EPS of $5.73 this year. Exxon Slips On Weak Q4 Revenue Exxon Mobil (XOM) shares are slipping 0.8% in premarket trade after reporting mixed Q4 results. Here’s how the oil giant’s results compared to analysts’ expectations: Adjusted EPS: $3.40 vs $3.29 expected Revenue: $95.43 billion vs $97.3 billion expected The company raked in a record $56 billion profit for all of 2022. But analysts expect Exxon’s profit may have already peaked, forecasting EPS will not be higher than $3 in any quarter this year or next. Pfizer Falls On Downbeat Guidance Pfizer (PFE) shares are falling 2.8% ahead of the open as weak guidance overshadows a Q4 earnings beat. Here’s how the pharmaceutical giant’s results compared to analysts’ expectations: Adjusted EPS: $1.14 vs $1.05 expected Revenue: $24.3 billion vs $24.28 billion expected The company brought in a record $100.3 billion profit in 2022, driven by more than $50 billion in Covid vaccine and antiviral sales. But Pfizer expects sales to fall sharply this year. The company forecast revenue will decline up to 33% year over year as Covid vaccine sales slow. Pfizer forecast 2023 EPS of $3.25 to $3.45, down by as much as 50% from the record $6.58 last year. McDonald’s Drops Despite Q4 Earnings Beat McDonald’s (MCD) shares are falling 1.8% in premarket trade despite beating Q4 expectations on the top and bottom line. Here’s how the fast food giant’s results compared to analysts’ expectations: EPS: $2.59 vs $2.45 expected Revenue: $5.93 billion vs $5.68 billion expected McDonald’s same-store sales in the U.S. jumped 10.3% beating estimates of 8.1%, as demand jumped and customers paid higher prices. But the CEO warned the company is expecting short-term inflation pressures to continue in 2023. The company expects to open 1,900 new restaurants globally this year, including more than 400 in the U.S. UPS Jumps On Q4 Earnings Beat UPS (UPS) shares are rising 1.9% ahead of the open after beating Q4 profit expectations. Here’s how the shipping giant’s results compared to analysts’ expectations: Adjusted EPS: $3.62 vs $3.59 expected Revenue: $27.03 billion vs $28.09 billion expected Even as shipping volumes have decreased and costs rise, UPS has benefited from elevated prices. The company raised shipping rates by 6.9% at the end of 2022. But UPS offered full-year 2023 guidance that was below analysts’ estimates. The company expects between $97 billion and $99.4 billion in revenue this year vs analysts’ expectations of $99.98 billion. Consumer Confidence Expected To Rise The Conference Board releases its January consumer confidence index at 10:00 a.m. ET. That survey is expected to rise to 109.5 from 108.4 in December. Last month’s figure was the highest since April 2022 as inflation has started to cool. But consumers are still expecting a recession to hit the U.S. economy in the months ahead. Key Earnings After The Close Here’s a look at the companies set to report earnings after the close today: Advanced Micro Devices (AMD) Snap (SNAP)
Continue Reading -->Coffee With Greta: Traders Brace For Big Week
DJIA Futures: -145 (-0.4%) SPX Futures: -33 (-0.8%) NASDAQ Futures: -138 (-1.1%) Good morning friends! Futures are lower as traders gear up for a big week of earnings, the Fed decision, and new jobs data. Let’s get right to it! Big Week For Traders Wall Street may be in for a wild ride this week as earnings season picks up and the Fed meets. The Fed meeting kicks off on Tuesday with the rate hike decision set to be released Wednesday. CME Group’s FedWatch Tool shows 98.1% of traders expect a 25 basis point hike. That survey shows the market pricing in one more 25 basis point move at the next meeting and then traders are split on if the central bank will pause rate hikes after that. This week also includes key jobs data, something the Fed has been watching closely. The official January jobs report comes out Friday morning, with ADP’s private employment report on Wednesday morning. And it will be the busiest week of earnings yet starting with results from Exxon Mobil (XOM), Pfizer (PFE), UPS (UPS), McDonald’s (MCD), Caterpillar (CAT), and General Motors (GM) Tuesday morning. Yields Rise Ahead Of Fed Meeting Treasury yields are rising today as traders sell off bonds ahead of the Fed meeting. The 2-year yield is up 5 basis points to 4.25% while the 10-year yield is up 3 basis points to 3.55%. The market is anticipating the smallest rate hike from the Fed since it began the current tightening cycle last May. But concern is rising on Wall Street that the bank will over-tighten and plunge the economy into a recession. The latest inflation data has shown the Fed’s rate hikes having an impact on prices. But Fed officials have maintained the bank’s stance that rates still need to rise further before pausing. Ford Cuts Mustang Mach-E Prices Ford (F) shares are slipping 2.4% ahead of the open after announcing it will increase production and cut prices of its electric Mustang Mach-E. The automaker said this morning that the price cuts will range from $600 to $5,000 depending on the model. The Mach-E starting price will now range from $46,000 to $64,000. The move follows Tesla’s (TSLA) decision to cut prices on its Model Y earlier this month. The chief customer officer of Ford’s EV business said, “We are responding to changes in the marketplace. As we look and want to stay competitive in the marketplace, we’re having to respond.” But the cuts mean some models of the Mach-E will not be profitable on a per-unit basis. The company will also increase production to 130,000 units annually from 78,000 currently. Philips Cuts 6,000 Jobs Philips (PHG) shares are rallying 5.7% in premarket trade after announcing job cuts. The Dutch health technology company said today it will lay off 6,000 employees. The move is meant to lower costs and restore its profitability after a recall of respiratory devices knocked 70% off of its market value. Half of those cuts will be made this year with the other half by 2025. The company’s new CEO said the cuts are a “necessary intervention to help us to become competitive and lean in the way we go forward in the market.” The latest move comes on top of Philips’ announcement to cut 4,000 jobs last October. In Case You Missed It Lucid Group (LCID) shares skyrocketed 43% on Friday amid takeover rumors. The stock was halted several times throughout the session as trading volume jumped to nearly eight times the average. A stock research blog speculated that Saudi Arabia Public Investment Fund would acquire the electric automaker. LCID shares are up 0.9% ahead of the open today.
Continue Reading -->Lucid Doubled – Now I’m doing This
We have mostly red arrows around the world after a big start to 2023. Spain’s Hot CPI is putting some pressure on Europe, and most of China is lower after their holiday week. SPX futures are -36 after hitting a high of 4094 Friday. We’ll see if the 4039 area can hold this morning with 4015 a bigger spot. The FOMC is Wednesday, with many big earnings reports in the mix — AMD, XOM, META, AAPL, GOOGL, and AMZN. SPY gave us a very tradable move as it hit a high of $408.62 before fading a bit Friday. This morning we’ll see how it handles $402ish. $400 is a bigger spot. If you are thinking there can be one more move higher this week, $408 or $410 lotto calls for Wednesday or Friday may be worth a look. Now let’s look at some individual names. LCID was a great grab Friday as our eyes were on it with the TSLA strength. It doubled intraday to take some off. I also took some home. I trimmed most of my position above $14.50 pre-market. See how it holds up. NIO hit $13.20 last week. I’m still long. If TSLA continues, this should have more room. It needs to hold $11.90. TSLA changed January 6 and became my #1 P&L driver for 2023. Many did well with call spreads into earnings or buying it vs. $154.76 the day. It hit $180.76 Friday. We’ll see how it reacts for active cash flow today. It just had a big move, so let it do some price discovery. RBLX is tight. Some are long vs. the $34 area. Others are waiting for a high-volume move above $38ish. AMD ignited above $65 a few weeks ago and cleared $72.60 Monday to see $77+ last week. It went red to green after INTC. Earnings are on Tuesday. See if can hold hold $73ish for now. Scott Redler’s positions disclosure as of 2023-01-30 at 7.23.09 AM
Continue Reading -->Coffee With Greta: PCE Inflation Cools
DJIA Futures: -24 (-0.1%) SPX Futures: -16 (-0.4%) NASDAQ Futures: -69 (-0.6%) Good morning friends! Futures are slipping despite new data showing inflation pressures continued to cool at the end of 2022 as disappointing earnings weigh on the market. Let’s get right to it! PCE Inflation Cools The Fed’s favorite inflation gauge continued to cool in December. The Bureau of Economic Analysis’ personal consumption expenditures price index rose 0.1% monthly and 5% year over year. That was down from the 5.5% annual gain in November. The core PCE price index, which excludes food, energy, and trade services, rose 0.3% monthly and 4.4% year over year. That was also down from the 4.7% annual gain in November and in line with economists’ expectations. Intel Tumbles After Earnings Miss, Weak Guidance Intel (INTC) shares are tumbling 9.8% ahead of the open after missing Q4 expectations and issuing weak guidance. Here’s how the chipmaker’s results compared to analysts’ expectations: Adjusted EPS: $0.10 vs $0.21 expected Revenue: $14.04 billion vs $14.49 billion expected Intel missed its own prior forecast of EPS of $0.20 on $14 billion to $15 billion in revenue. The tech company forecast an adjusted loss of $0.15 per share on revenue of about $10.5 billion to $11.5 billion in Q1. Intel also expects gross margins of just 34.1% in the current quarter, far off from the 51% to 53% goal the company set last year and down from 55.1% in Q1 2022. The company blamed an inventory glut for the expected struggles this quarter as customers work through an oversupply of chips. The CEO told investors, “While we know this dynamic will reverse, predicting when is difficult.” Chevron Slips As Earnings Come Up Short Chevron (CVX) shares are down 1.4% in premarket trade after missing Q4 profit expectations. Here’s how the oil giant’s results compared to analysts’ expectations: Adjusted EPS: $4.09 vs $4.33 expected Revenue: $56.47 billion vs $52.68 billion expected For the full year, Chevron earned a record $36.5 billion in profit. That was about $10 billion higher than its previous record set in 2011. The CEO said, “We delivered record earnings and cash flow in 2022, while increasing investments and growing U.S. production to a company record.” Bed Bath & Beyond Defaults On Credit Line Bed Bath & Beyond (BBBY) shares are up 1.5% ahead of the open as potential bankruptcy hopes rise after the retailer defaulted on its credit line with JPMorgan. In an SEC filing, Bed Bath said it “does not have sufficient resources to repay the amounts under the Credit Facilities and this will lead the Company to consider all strategic alternatives, including restructuring its debt under the U.S. Bankruptcy Code.” The company’s debt load includes a $550 million asset-backed loan with JPMorgan, $375 million with lender Sixth Street, and nearly $1.2 billion in unsecured Treasury notes. In a separate filing today, Bed Bath said its Board has named restructuring expert Carol Flaton as an independent director. Key Earnings Next Week Earnings season continues to pick up steam next week. Here’s some of the major companies set to report: SoFi (SOFI) Exxon Mobil (XOM) Pfizer (PFE) McDonald’s (MCD) UPS (UPS) Caterpillar (CAT) Advanced Micro Devices (AMD) General Motors (GM) Spotify (SPOT) Snap (SNAP) Meta Platforms (META) Apple (AAPL) Alphabet (GOOGL) Amazon (AMZN) Ford (F)
Continue Reading -->Meet Pro Trader JR Romero, Leader of the Momentum Express VTF®
Today we’re speaking with JR Romero, the Leader of T3 Live’s Momentum Express VTF®. You’ll hear about JR’s adventure from Argentina to Brazil to New York to Idaho. And you’ll learn how this Columbia University graduate went from coding to working for a major hedge fund to trading his own money. You’ll even hear about the time the roof collapsed on JR during a trade. Editor’s Note: this transcript has been edited for length and clarity. Greta Wall: I want to start from the very beginning here. Tell me about your childhood. JR Romero: Thank you for having me. It’s a pleasure to be with you today. I was born in Argentina in the late seventies during the military junta. My parents were political exiles. I grew up in Brazil and moved to the United States in the late nineties. GW: What it was like growing up in Brazil, and then emigrating to the US? JR: I had a pretty free-range childhood. If I was indoors, I was eating, sleeping, or injured. I had a wonderful childhood with lots of friends, and not a lot of schoolwork. But it was a really remarkable time. GW: What was your family like? JR: We have a long history of entrepreneurship in my family. My grandparents and great-grandparents were all business owners. My father was an economist and a business owner. He was also a very active investor, especially in the forex markets. And my mother was a dance therapist and educator. I have one sister who lives in Uruguay with two children. GW: So you didn’t spend a lot of time inside as a kid. What were your hobbies? JR: I was a pugilist from a very early age. I was very much into karate and judo. And then in my teens, I got pretty heavily into boxing. And I’ve been getting punched in the head ever since! GW: Do you still box? JR: The mileage caught up to me. I’m in my late forties, so I only hit things that don’t hit back. I do the heavy bag and light sparring, and I enjoy coaching my children. Both my sons are avid enthusiasts of boxing and kickboxing. So I’m trying to pass the torch on. GW: Did you come to US with your parents from Brazil or on your own? JR: I left the house at 17. I was a snowboarder and traveled around for a couple of years. I couch-surfed quite a bit. And my girlfriend at the time had a college application to Columbia University. I stole it from her (with permission), applied, and got in. So I came here at 19. GW: You said your dad was an investor. Did he introduce you to trading and the markets? JR: No, not at all. I was a computer engineering major at Columbia University, and then I worked for a hedge fund on the technology side. And through my interactions as a contractor, I was hired by a very important hedge fund. There I became really enthralled with the traders and how they saw the world, how they constantly analyzed probabilities about everything. They would take bets on what time the pizza guy would get there, down to the second. They built algorithms to figure out which restaurant would deliver faster, so I was instantly hooked. And I had a couple of people that took me under their wing within that organization. That’s how I was initially introduced to trading. GW: Tell me more about that transition from the IT side into the trading side. JR: I was immediately paired with the quants because of my computer science background. But I was sort of bored by it. I understood what they were doing. I was more fascinated by technical analysis, charting, and economic catalysts. It was fascinating to watch how trading decisions were made. And I asked to be trained and I was given a shot to participate in that. Eventually, I started trading on my own. It was a real struggle at first, going from institutional to private trading. You don’t have risk managers looking over your head. You don’t have team meetings. You don’t have that kind of support. When you go from trading institutional money to your own money, it’s a very different feeling that’s very hard for some traders to adjust to. GW: When you look back on your early days of trading for yourself, what would you say was the biggest mistake that you made? I was an acute sufferer of the Dunning-Kruger effect from my early days. (Editor’s Note: The Dunning-Kruger effect is a psychological phenomena which occurswhen a person’s lack of knowledge leads them to overestimate their abilities) I had a strong foundation in math and science and a keen understanding of technical analysis. After a couple of years, I thought I was really a good technician. But I found out there is a vast difference between being proficient at reading charts, and actually being a trader. That transition was very difficult and very painful. And it led me down some rabbit holes that took some time to untangle. But, eventually, I figured out a trading style that fit me, and a methodology that worked for my personality, And it’s been a great ride ever since. GW: On the flip side, what was the best thing you did in your early days of training? JR: Asking for help was the best thing I ever did. And the second best thing I ever did was to realize early on that as a trader, you are truly on your own. No one else possesses your same personality profile, your same characteristics, and your same view of the market. And I realized that to be successful, I needed to develop my own sensibility, my own strategy, and my own approach to markets. GW: So you mentioned earlier that had mentors at the institutional firm you were working for. Tell me about those mentors and how they
Continue Reading -->Coffee With Greta: Stocks Rise As GDP Beats
DJIA Futures: +87 (+0.3%) SPX Futures: +23 (+0.6%) NASDAQ Futures: +116 (+1.0%) Good morning friends! Futures are higher as traders digest strong Q4 GDP data and an earnings beat from Tesla. Let’s get right to it! U.S. Economy Expands More Than Expected The U.S. economy grew more than expected at the end of 2022. The Commerce Department’s first estimate shows GDP rose at a 2.9% annualized pace in Q4. That was better than economists’ expectations for 2.8% but still down from 3.2% growth in Q3. The data showed consumer spending remained strong at the end of the year, up 2.1% on a quarterly basis. Inflation pressures also cooled with the personal consumption expenditures price index increasing 3.2%, down from 4.8% in Q3. The slowdown in GDP growth from Q3 to Q4 was largely driven by lower residential fixed investment which plunged 26.7% as the housing market slowed. Exports also declined 1.3% in the quarter. Tesla Beats Q4 Expectations Tesla (TSLA) shares are rallying 8.8% ahead of the open after reporting record revenue in Q4 and beating earnings expectations. Here’s how the electric automaker’s results compared to analysts’ estimates: Adjusted EPS: $1.19 vs $1.13 expected Revenue: $24.32 billion vs $24.16 billion expected Automotive revenue jumped 33% year over year but gross margins came in at 25.9%, the lowest figure in five years. Tesla blamed those smaller margins on lower sales prices, saying average sales prices have “generally been on a downward trajectory for many years”. The company most recently cut prices on its cars in the U.S. and China in late 2022. IBM Sales Top Estimates IBM (IBM) shares are slipping 2.2% in premarket trade despite reporting better-than-expected sales in the fourth quarter. Here’s how the company’s results compared to analysts’ estimates: Adjusted EPS: $3.60 as expected Revenue: $16.69 billion vs $16.4 billion expected IBM’s total revenue was flat year over year, beating expectations for the first decline in two years. For the full year, the company’s revenue jumped 6% to $60.5 billion. IBM reiterated its previous forecast for 2023 revenue growth in the mid-single digits, suggesting a total of about $63.5 billion vs $60.8 billion expected. The company is projecting $10.5 billion in free cash flow this year vs $11.1 billion expected. American Airlines Beats Earnings Estimates American Airlines (AAL) shares are up 1.9% ahead of the open after beating Q4 earnings estimates. Here’s how the airline’s results compared to analysts’ expectations: Adjusted EPS: $1.17 vs $1.14 expected Revenue: $13.19 billion vs $13.20 billion expected Revenue jumped 16.6% compared to the same quarter in 2019 as travelers paid higher fare prices. That revenue total was a new record for the company despite operating 6.1% less capacity than Q4 2019. American brought in $127 million in net income for all of 2022, its first full-year profit since 2019. The carrier forecast Q1 capacity will be 8% to 10% higher year over year. Southwest Reports Worse-Than-Expected Q4 Loss Southwest Airlines (LUV) shares are dropping 2.6% in premarket trade after reporting a steeper Q4 loss than expected. Here’s how the carrier’s results compared to analysts’ estimates: Adjusted loss per share: $0.38 vs $0.12 expected Revenue: $6.17 billion vs $6.16 billion expected That loss was driven by the mass cancellation of about 16,700 Southwest flights between December 21 and December 31. The company said it expects that meltdown to continue weighing on its bottom line in Q1. Southwest said it expects to post another loss in Q1, sharply missing analysts’ expectations for a profit of $0.19 per share. The airline reported a $529 million profit for the full-year 2022, down 45% from a year earlier. Key Earnings After The Close Here’s a look at the companies set to report earnings after the close today: Intel (INTC) Visa (V)
Continue Reading -->Coffee With Greta: Microsoft’s Gloomy Outlook Weighs On Tech
DJIA Futures: -273 (-0.8%) SPX Futures: -42 (-1.0%) NASDAQ Futures: -194 (-1.6%) Good morning friends! Futures are falling as Microsoft’s gloomy forecast drags down the tech sector. Let’s get right to it! Microsoft Drops On Weak Forecast Microsoft (MSFT) shares are falling 3% ahead of the open after weak guidance overshadows a fiscal Q2 earnings beat. Here’s how the tech giant’s results compared to analysts’ estimates: Adjusted EPS: $2.32 vs $2.29 expected Revenue: $52.75 billion vs $52.94 billion expected Total revenue rose just 2% year over year which was the slowest rate since 2016. Microsoft’s Intelligent Cloud segment brought in $21.51 billion in revenue, up 18% from a year ago and better than analysts’ expectations of $21.44 billion. But executives told analysts on the conference call that they expect the weakening tech environment to continue. Microsoft said it expects $50.5 billion to $51.5 billion in fiscal Q3 revenue, falling short of estimates for $52.43 billion. Boeing Slips After Surprise Q4 Loss Boeing (BA) shares are down 2.6% in premarket trade after reporting an unexpected Q4 loss. Here’s how the plane maker’s results compared to analysts’ expectations: Adjusted loss per share: $1.26 vs $0.26 EPS expected Revenue: $19.98 billion vs $20.38 billion expected The profit loss was caused by supply chain issues which caused higher costs. Boeing’s commercial aircraft unit generated $9.2 billion in Q4 sales, up 94% year over year. The company generated $3.1 billion in free-cash flow last quarter, better than expected. It had $2.3 billion in cash flow for the full-year, the best since 2018. Boeing reiterated its forecast to generate between $3 billion and $5 billion in free-cash flow this year. Kimberly-Clark Falls After Q4 Sales Miss Kimberly-Clark (KMB) shares are down 4% ahead of the open after reporting mixed Q4 results. Here’s how the consumer goods giant’s results compared to analysts’ expectations: Adjusted EPS: $1.54 vs $1.51 expected Revenue: $4.96 billion vs $4.99 billion expected The drop in revenue came as sales volume declined 7% but pricing rose 10%. Kimberly-Clark forecast sales will be flat to up 2% in 2023 vs analysts’ expectations for 1% growth. AT&T Jumps On Earnings Beat AT&T (T) shares are up 2.4% in premarket trade after beating Q4 profit expectations. Here’s how the company’s results compared to analysts’ estimates: Adjusted EPS: $0.61 vs $0.57 expected Revenue: $31.3 billion vs $31.4 billion expected AT&T added 656,000 monthly cell phone subscribers in the quarter vs 570,000 expected, bringing the 2022 total to nearly 2.9 million. The company forecast adjusted EPS of $2.35 to $2.45 for the full-year 2023 vs $2.53 expected. AT&T is targeting $16 billion or more in free-cash flow this year vs $16.2 billion estimates Mortgage Demand Rises As Rates Hit 4-Month Low Mortgage demand jumped last week as rates fell for the third week in a row. The Mortgage Bankers Association reported total application volume rose 7% last week. Purchase applications rose 3% weekly and were down 39% year over year. Refinance applications jumped 15% weekly and were down 77% annually. The jump came as the average 30-year contract rate fell to 6.2% from 6.23%, the lowest since September. Key Earnings After The Close Here’s a look at the companies set to report earnings after the close today: Tesla (TSLA) IBM (IBM) ServiceNow (NOW) Levi Strauss (LEVI)
Continue Reading -->Coffee With Greta: Traders Focus On Guidance In Earnings
DJIA Futures: -150 (-0.4%) SPX Futures: -20 (-0.5%) NASDAQ Futures: -86 (-0.7%) Good morning friends! Futures are falling as traders digest new Q4 earnings. Let’s get right to it! 3M Drops After Earnings Miss, Weak Outlook 3M (MMM) shares are down 4.5% ahead of the open after the company missed Q4 expectations and issued weak guidance. Here’s how the manufacturing giant’s results compared to analysts’ expectations: Adjusted EPS: $2.28 vs $2.36 expected Revenue: $8.1 billion as expected For the full year, 3M earned $10.10 per share in 2022. But the company expects profits to fall this year. 3M forecast 2023 earnings will be between $8.50 and $9 per share vs analysts’ expectations of $10.20. Sales are expected to fall between 2% and 6% compared to last year as consumer electronics demand is down “significantly”. The company also cited “near-term weakness in consumer discretionary spending.” 3M also announced plans to cut about 2,500 manufacturing jobs around the world as the company prepares for those challenges. Johnson & Johnson Slips Despite Earnings Beat Johnson & Johnson (JNJ) shares are falling 1.1% in premarket trade despite reporting better-than-expected Q4 results and issuing strong guidance. Here’s how the pharmaceutical giant’s results compared to analysts’ expectations: Adjusted EPS: $2.35 vs $2.23 expected Revenue: $23.71 billion vs $23.896 billion expected Revenue fell 4.4% year over year while unadjusted profits were down 25.7%. Johnson & Johnson forecast full-year 2023 EPS between $10.45 to $10.65 vs $10.33 expected. General Electric Earnings Beat, Outlook Falls Short General Electric (GE) shares are down 0.4% ahead of the open after beating Q4 earnings expectations but issuing weak guidance. Here’s how the company’s results compared to analysts’ expectations: Adjusted EPS: $1.24 vs $1.15 expected Revenue: $21.79 billion vs $21.25 billion expected Free cash flow: $4.3 billion vs $3.98 billion expected Total revenue jumped 7% year over year. That growth was largely driven by GE’s aerospace division which saw revenue rise 25.7%, power revenue rose 26.4%, renewable energy revenue increased 3.7%, and healthcare revenue slipped 0.4%. The company forecast 2023 adjusted EPS between $1.60 and $2.00 vs analysts’ expectations of $2.37. Verizon Falls On Disappointing Outlook Verizon (VZ) shares are falling 2.3% ahead of the open after its 2023 outlook disappointed. Here’s how the cell phone giant’s Q4 results compared to analysts’ expectations: EPS: $1.19 as expected Revenue: $35.3 billion vs $35.1 billion expected Verizon added 41,000 new monthly wireless subscribers last quarter after losing 189,000 in Q3 and 215,000 in Q2. The company also added 416,000 broadband users in Q4, up from 377,000 in Q3 and is best performance in more than a decade. Verizon forecast full-year 2023 adjusted EPS of $4.55 to $4.85 vs $4.96 expected. In Case You Missed It The Conference Board’s leading economic indicators index fell more than expected in December. The index slumped 1% vs economists’ expectations for a 0.7% decline. That drop was due to a softening labor market, a slowdown in manufacturing activity, and fewer homes being built. The continued decline in LEI signals a recession is likely in the near term.
Continue Reading -->Why Tesla $136.68 Is Critical Into Earnings
We have mixed markets to start the week. We will get a ton of earnings the next two weeks. Europe is up small and most of Asia is closed for the holiday. The debate now revolves around whether we will have a hard or soft landing. And where will interest rates be at the end of 2023? These questions are important, but what’s more important is your time frame and approach. The bears growled on January 18, but then SPX held 3885 and the bulls took control. SPX cleared 3926 Friday to see 3972, keeping both sides on their toes. SPX futures are flattsh. We’ll see if 3950ish holds to keep this pattern going. Then we’ll see if the intermediate downtrend line gets cleared around 4015ish. QQQ broke its ascending channel last Wednesday but snapped back very fast to keep both sides on their toes. There has been lots of nice trades. QQQ’s cleared $277 to see $283ish Friday. We’ll see if we digest higher to keep Friday’s action in control Active support is $280ish. Watch the leaders. NFLX reacted well on Friday to help sentiment. Now let’s get into some individual names: TSLA became a “Go To Long” again on January 6, giving traders many ways to make money. On Friday it cleared $129 to get me long again. It’s up this morning to trim and trail. Let’s see how it handles last week’s high of $136.68. A move above that could mean more momentum, but remember that earnings are on Wednesday. AAPL is just a tactical trade until earnings. Last Wednesday, it gave a way to sell. And then the $133 area held to buy it back. Watch it for sentiment. $138.81 is last week’s high, and then $140ish. Earnings are next week. Today it’s up a bit. Not much to do here but watch it for market sentiment NFLX acted well after earnings Friday. Now we’ll see if it can protect the earnings gap. Swing longs need it to hold $332ish. If it can hold that for a session or so, maybe there’s a continuation trade. See if it clears the post-earnings high of $344 and watch it for risk appetites. META’s been amazing this year. It held the 8 day Thursday to get me back long. On Friday it cleared the $137 area to manage. I’ll try and stay with it, but not through earnings. GOOGL got me long Thursday as it was super strong. Someone knew the jobs cuts were coming. I held through Friday as it hit $98.30. I’ll stay with it for now. The 200 day can happen, but $99.50 is the first pivot above. Scott Redler’s Positions Dislosure as of 2023-01-23 at 7.27.50 AM
Continue Reading -->Coffee With Greta: Traders Anticipate Fed Pivot
DJIA Futures: +70 (+0.2%) SPX Futures: +4 (+0.1%) NASDAQ Futures: +13 (+0.1%) Good morning friends! Futures are rising as traders gear up for a busy earnings week and look ahead to a smaller rate hike next week. Let’s get right to it! Fed Pivot Expected Wall Street is feeling confident the Fed will continue to dial back the size of its rate hikes at the next meeting. CME Group’s FedWatch Tool shows 98.7% of traders expect the central bank to approve a 25 basis point move at the February 1st meeting. That would be the smallest rate hike since the current tightening cycle started in spring 2022. Spotify To Cut 6% Of Workforce Spotify (SPOT) shares are up 5.6% ahead of the open after announcing layoffs this morning. The streaming giant said it plans to cut 6% of its workforce or roughly 600 jobs. The chief content and advertising business officer will also depart the company as part of a broader reorganization. Spotify is the latest tech company to cut jobs in the face of lower ad spending amid the current demand downturn. Activist Investor Takes A Stake In Salesforce Salesforce (CRM) shares are rising 4.5% in premarket trade following reports that activist investor Elliott Management has bought a large stake in the company. Elliott’s managing partner told Reuters, “We look forward to working constructively with Salesforce to realize the value befitting a company of its stature.” He also called Salesforce “one of the preeminent software companies in the world.” It’s unclear what Elliott may push for at Salesforce but the investment comes after the company announced job cuts and office closures earlier this year. Big Banks Team Up On New Digital Wallet PayPal (PYPL) shares are falling 1.8% ahead of the open following reports that the nation’s largest banks are teaming up to create a new digital wallet. JPMorgan Chase (JPM), Bank of America (BAC), and Wells Fargo (WFC) are all reportedly part of the project with four other banks. The Wall Street Journal reported the digital wallet would be managed by Early Warning Services LLC, which is the bank-owned company that operates Zelle. The digital wallet would be linked to shoppers’ debit and credit cards and the goal is to compete with PayPal and Apple’s (AAPL) Apple Pay. Busy Earnings Week Earnings season picks up steam this week with several key companies reporting. Here’s a look at the highlights: Tuesday AM: 3M (MMM), Johnson & Johnson (J&J), General Electric (GM) Tuesday PM: Microsoft (MSFT) Wednesday AM: Boeing (BA), Kimberly-Clark (KMB) Wednesday PM: Tesla (TSLA) Thursday AM: American Airlines (AAL) Thursday PM: Intel (INTC) Friday AM: Chevron (CVX)
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