Coffee With Greta: Reverse Stock Split Announcement Nails $AMC
DJIA Futures: -205 (-0.6%) SPX Futures: -31 (-0.8%) NASDAQ Futures: -125 (-1.1%) Good morning friends! Futures are falling as traders digest the latest batch of weak earnings and a key meme stock announced plans for a reverse stock split. Let’s get right to it! AMC Plunges After Announcing Reverse Stock Split AMC (AMC) shares are plunging 25.5% in premarket trade after announcing plans for a reverse stock split. The theater chain revealed it is seeking a special shareholder meeting to vote on a 1-for-10 stock split and to convert APE units into AMC common shares. $APE are the preferred equity units issued by AMC to all shareholders earlier this year. The company also plans to raise $110 million in capital by selling APE units to Antara Capital at a weighted average price of $0.66 per share. AMC also plans to reduce its debt to Antara by $100 million in exchange for approximately 91 million APE units. The company said that debt reduction would reduce annual interest expenses by ~$10 million. Micron Revenue Plunges Micron (MU) shares are down 4.5% ahead of the open after reporting a wider-than-expected fiscal Q1 loss. Here’s how the chipmaker’s results compared to analysts’ expectations: Adjusted loss per share: $0.04 vs $0.02 expected Revenue: $4.09 billion vs $4.13 billion expected Revenue plunged 47% year over year and Micron warned that would worsen in the next quarter. The company’s forecast also came in weaker than expected. Micron expects an adjusted loss between $0.72 and $0.52 per share in fiscal Q2 on revenue of $3.6 billion to $4 billion. The midpoint of that revenue outlook would be 51% lower than a year ago. Analysts were forecasting a fiscal Q2 loss of $0.32 per share on $3.92 billion in revenue. In an SEC filing, Micron disclosed that management plans to cut about 10% of staff in 2023 with about $30 million in restructuring costs expected in fiscal Q2. CarMax Plunges On Earnings Miss CarMax (KMX) shares are tumbling 13.7% in premarket trade after missing Q3 expectations. Here’s how the used car retailer’s results compared to analysts’ expectations: EPS: $0.24 vs $0.65 expected Revenue: $6.51 billion vs $7.16 billion expected Revenue was down nearly 24% year over year as CarMax said “vehicle affordability challenges” continued to impact its sales. Under Armour Picks New CEO Under Armour (UAA) shares are 1.1% lower ahead of the open after naming its new CEO after-hours on Wednesday. The company announced it has hired Marriott International (MAR) President Stephanie Linnartz to be its next CEO. Linnartz was one of 60 candidates considered for the role during a seven-month search. Under Armour is focused on growing its digital business. The founder and Executive Chairman told CNBC Linnartz was chosen due to her success in transforming Marriott’s online presence. She will take over from the interim CEO on February 27. Weekly Jobless Claims Tick Higher Weekly jobless claims rose less than expected last week. The Labor Department reported 216,000 Americans filed initial claims for unemployment benefits. That was up by 5,000 from the previous week but lower than expectations for 220,000. Q3 GDP Growth Revised Higher The U.S. economy expanded more than previously estimated in the third quarter. The Commerce Department’s final revision of GDP growth increased to 3.2% from 2.9%. That was an unexpected increase as consumer spending, nonresidential fixed investment, and state and local government spending were revised higher. Private inventory investment and exports were revised lower. In Case You Missed It Consumer confidence jumped more than expected this month. The Conference Board’s consumer confidence index rose nearly 7 points to 108.3. That was the highest reading in 8 months and better than economists’ expectations for 101.2. One-year inflation expectations also fell to 6.7%, the lowest level since September 2021. Existing home sales fell more than expected in November. The National Association of Realtors reported existing sales dropped 7.7% last month to a seasonally adjusted annual rate of 4.09 million units. That was the 10th straight monthly decline, the longest losing streak since NAR started tracking existing home sales in 1999. Economists were expecting existing sales to fall to an SAAR of 4.17 million units. Sales have dropped by nearly 37% in the past 10 months as mortgage rates jumped.
Continue Reading -->Coffee With Greta: Nike’s Strong Earnings Boost Stocks
DJIA Futures: +329 (+1.0%) SPX Futures: +29 (+0.8%) NASDAQ Futures: +54 (+0.5%) Good morning friends! Futures are higher as traders digest strong earnings from Nike (NKE) which are boosting the Dow. Let’s get right to it! Nike Surges On Earnings Beat Nike (NKE) shares are surging 11.4% ahead of the open after beating fiscal Q2 expectations and raising its outlook. Here’s how the company’s results compared to analysts’ expectations: EPS: $0.85 vs $0.64 expected Revenue: $13.32 billion vs $12.57 billion expected Revenue jumped 17% year over year and the CFO said they now expect full-year revenue growth in mid-single digits vs the previous forecast for growth in the low-to mid-single digits. But the company still struggled with inventory in the quarter. Inventories were up 43% year over year to $9.3 billion, down from $9.7 billion in fiscal Q1. The CEO said he believes the company is past its inventory peak. FedEx Jumps After Strong Earnings FedEx (FDX) shares are up 5.8% in premarket trade after reporting mixed fiscal Q2 results. Here’s how the shipping giant’s results compared to analysts’ expectations: Adjusted EPS: $3.18 vs $2.81 expected Revenue: $22.8 billion vs $23.7 billion expected Although profits came in stronger than expected, those results were down from EPS of $4.38 on $23.5 billion in sales a year ago. FedEx’s earnings guidance also came in weak with the company expecting full year adjusted EPS of $13 to $14 vs Wall Street’s expectation of $14. The company said it is still facing headwinds from a weakening global economy but said it expects volume weakness to subside in the second half of its fiscal year. FedEx is cutting costs to offset that weakness with management planning to reduce expenses by about $3.7 billion this fiscal year. Refinance Demand Jumps As Rates Drop Refinance demand jumped last week as mortgage rates hit the lowest level since September. The Mortgage Bankers Association reported refinance applications jumped 6% weekly but were still down 85% year over year. Purchase applications fell 0.1% weekly and 36% annually, as this is historically the slowest time of the year for home purchases. The average 30-year fixed contract rate decreased to 6.34% from 6.42% the previous week. Although that’s the lowest since September, rates are still more than double what they were at this time in 2021. Existing Home Sales Expected To Fall The National Association of Realtors reports existing home sales for November 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 4.17 million units from 4.43 million in October. The housing market has seen a sharp slowdown in activity due to higher mortgage rates piling on top of the typical seasonal slowdown in sales. Consumer Confidence Expected To Improve The Conference Board releases its December consumer confidence index at 10:00 a.m. ET. That survey is expected to have improved to a reading of 101.2 from 100.2 in November. Consumer confidence hit the lowest level since July last month as inflation continues to pressure shoppers. In Case You Missed It Wells Fargo (WFC) agreed Tuesday to a $3.7 billion settlement with the Consumer Financial Protection Bureau over customer abuses tied to checking accounts, mortgages, and auto loans. The company was ordered ti pay a record $1.7 billion civil penalty plus more than $2 billion to customers. The CFPB said, “Consumers were illegally assessed fees and interest charges on auto and mortgage loans, had their cars wrongly repossessed, and had payments to auto and mortgage loans misapplied by the bank.” Wells Fargo said many of the “required actions” of the settlement have already been completed.
Continue Reading -->Coffee With Greta: Stocks Are Still Sliding
DJIA Futures: +6 (+0.02%) SPX Futures: -7 (-0.2%) NASDAQ Futures: -46 (-0.4%) Good morning friends! Futures are mostly lower as Wall Street continues to struggle and traders digest new data on the housing market. Let’s get right to it! New Home Construction Slows New home construction slowed less than expected in November. The Census Bureau reported housing starts dropped 0.5% last month to a seasonally adjusted annual rate of 1.43 million units. That was better than expectations for 1.40 million but marked the third straight monthly declines. Starts were down 16.4% year over year as high mortgage rates put pressure on builders. Single-family starts dropped 4.1% to an SAAR of 828,000 units while multi-family starts jumped 4.8% to an SAAR of 584,000 units. But building is expected to slow further as permits tumbled last month. Permits dropped 11.2% to an SAAR of 1.34 million units, sharply lower than 1.48 million expected. Bank of Japan Shifts Bond Yield Policy The Bank of Japan shocked global markets overnight by unexpectedly widening its target range for 10-year Japanese government bond yields. The central bank will now allow the 10-year yield on the Japanese Government Bond to move 50 basis points on either side of its 0% target. That’s up from 25 basis points previously. The BOJ says the move intended to “improve market functioning and encourage a smoother formation of the entire yield curve, while maintaining accommodative financial conditions.” The bank is also maintaining loose monetary policy, leaving its benchmark interest rate unchangedat -0.1% and vowing to increase the rate of its 10-year government bond purchases. The move caused a sell-off in bonds and stocks globally overnight. In the U.S., the 10-year yield is up 8 basis points to 3.66%. Yields move inversely to prices, rising as bonds are sold. General Mills Slips Despite Earnings Beat, Strong Outlook General Mills (GIS) shares are falling 3.5% ahead of the open despite beating fiscal Q2 expectations and hiking its outlook. Here’s how the company’s results compared to analysts’ expectations: Adjusted EPS: $1.10 vs $1.07 expected Revenue: $5.22 billion vs $5.19 billion expected General Mills hiked its outlook for 2023 adjusted EPS growth to between 4% to 6% vs up to 5% previously. Organic net sales are also expected to rise 8% to 9% vs 6% to 7% growth expected previously. But the company also warned it continues to expect ““the inflationary cost environment and the frequency and severity of disruptions in the supply chain” to be its largest challenge. Oil Prices Rise, Surging Covid Cases In China Limit Gains Oil prices are higher this morning as the dollar weakens and the U.S. prepares to restock its petroleum reserves. West Texas Intermediate crude futures are up 1% to $76 bbl while Brent crude futures are up 0.9% to $80.50 bbl. But the market is concerned about the demand impacts of the latest Covid surge in China. Although the country has been relaxing restrictions, uncertainty remains about how China’s decision to ditch its “zero-Covid” policies will impact other countries. In Case You Missed It Homebuilder sentiment dropped for the 12th straight month on Monday. The National Association of Homebuilders sentiment index fell 2 points this month to 31. That was the lowest reading since mid-2012 and worse than expectations for a slight improvement to 34. Any reading below 50 is considered negative but it was the smallest drop in the past six months. NAHB’s chief economist said that indicates builder sentiment is nearing a bottom. The 6-month sales expectations index also rose by 4 points to 35.
Continue Reading -->Coffee With Greta: Can Traders Shake the December Slump?
DJIA Futures: +2 (+0.01%) SPX Futures: +2 (+0.1%) NASDAQ Futures: +16 (+0.1%) Good morning friends! Futures are flat as traders gear up for a new week of trade. Let’s get right to it! Fresh Week The major indexes are all poised to open slightly higher following two straight weeks of losses. Recession fears took over last week after the Fed hiked rates again and raised its forecast for future moves. The major indexes are all on track for monthly losses so far. The Dow Jones is down 4.8% this month, the S&P 500 has lost 5.6%, and the Nasdaq has dropped 6.7%. Tesla Rises After Musk’s Latest Twitter Poll Tesla (TSLA) shares are up 2% ahead of the open after CEO Elon Musk ran a poll on Twitter asking whether he should step down as head of the company. Musk said he would abide by the results of that poll. 57.5% voted ‘yes’ that he should step down, while 42.5% voted ‘no’. Some Tesla shareholders have previously expressed concern that Musk’s duties at Twitter distract him from Tesla. Musk has also sold off large chunks of Tesla stock to help fund his takeover of Twitter. Regional Airline Ditches American For United Mesa Air Group (MESA) shares are rallying 7.7% in premarket trade. The regional carrier announced over the weekend it is winding down flights for American Airlines (AAL) and is close to an agreement to fly for United Airlines (UAL). In a note to employees, Mesa’s CEO said, “We are excited to announce we have negotiated a wind down of our operations with American and are finalizing a new agreement with United which would transition all CRJ900s currently flying for American Eagle to United Express.” The final Mesa flight for American will be on April 3. Oil Prices Jump On Chinese Demand Hopes Oil prices are higher this morning as optimism about the Chinese economy overshadows global recession fears. West Texas Intermediate crude futures are up 1.3% to over $75 bbl while Brent crude futures are up 1.4% to over $80 bbl. China is sticking by its relaxed Covid restrictions even as cases rise. The country has also vowed to increase support for the economy and boost economic growth in 2023. Homebuilder Sentiment Expected To Improve Homebuilder sentiment is expected to improve slightly this month. The National Association of Homebuilders releases its monthly sentiment index at 10:00 a.m. ET. That survey is expected to show an improvement to 34 from 33. Confidence dropped for the 11th straight month and hit a decade low in November as builders struggle with lower demand due to higher mortgage rates. More housing market data is due later this week. The Census Bureau reports housing starts and building permits Tuesday, the National Association of Realtors reports November existing home sales Wednesday, and the Census Bureau reports November new home sales Friday.
Continue Reading -->Can Elon Musk Commit to Tesla?
SPY did a double top at $410 on CPI day and then again on the FOMC at $405ish. I sold a lot of calls to collect premium. My SPY puts also helped into Friday, when I sold half and made some into a put spread. We’re seeing a small bounce attempt today. The resistance #1 area is $386-$388. If we see that, I’d probably sell $393-$395 calls because I think move into year-end would be capped. QQQ’s failed to hold $295 on CPI day and has been under pressure since hitting a low of $272.67 Friday. If we see a bounce attempt today, I’d think $278ish is resistance and then we’ll have a big one around $283ish. So let’s talk Tesla (TSLA) and some other names. TSLA has been broken since September with lots of ways to stay out of the way. Last week it showed extreme relative weakness and Elon sold more shares. On Friday it was rejected into the $161 area and made another new low on the year, hitting $150.04. It’s trying to bounce a bit on the possibility of a new Twitter CEO. But it’s hard to get excited here. See if the early strength holds or fades. AAPL sold down hard last week to hit $133.73.We’ll see if today’s bounce sticks for a day or fades. $136.50-$137.50 is now resistance. NFLX filled the gap up to $332. It’s been a great vehicle for us the past two months. I’m glad we were out before Last Thursday’s news and gap down. It made a low of $286 and had a small bounce Friday. I wouldn’t chase prices. Perhaps it goes green to red today. MSFT hit $263 and sold down fast. Some got short around $253 and it hit $243ish. I’d think $249ish would reject a bounce attempt.
Continue Reading -->Coffee With Greta: Stocks Are Free, Free Fallin’
DJIA Futures: -377 (-1.1%) SPX Futures: -41 (-1.1%) NASDAQ Futures: -68 (-0.6%) Good morning friends! Futures are sliding as recession fears grip traders. Let’s get right to it! Wall Street Selloff Continues Recession fears have taken over Wall Street and stocks are continuing to tumble. The major indexes are all sliding further in premarket action after dropping sharply on Thursday. The Dow Jones dropped 764 points or 2.25% on Thursday, its worst daily performance since September. The S&P 500 and the Nasdaq fell 2.49% and 3.23% respectively. All three are on track to notch a second straight week of losses. Trading is also expected to be volatile today with a large amount of options set to expire. $2.6 trillion worth of index options are set to expire today, which Goldman Sachs says is the highest amount “relative to the size of the equity market in nearly two years.” Adobe Jumps On Strong Earnings Adobe (ADBE) shares are up 5.3% ahead of the open after beating fiscal Q4 expectations. Here’s how the software company’s results compared to analysts’ expectations: Adjusted EPS: $3.60 vs $3.50 expected Revenue: $4.53 billion as expected Revenue grew 10% year over year, down from 13% growth the previous quarter. The CEO said, “We delivered record operating cash flows with a focus on profitability.” For fiscal Q1, Adobe forecast $3.65 to $3.70 in adjusted EPS on $4.60 billion to $4.64 billion in revenue. That topped analysts’ expectations of $3.64 in adjusted EPS on $4.64 billion in revenue. Safety Regulators Investigate GM’s Self-Driving System General Motors (GM) shares are slipping 1.5% in premarket trade after U.S. safety regulators opened a formal investigation into the company’s autonomous driving system. The National Highway Traffic Safety Administration (NHTSA) is investigating GM’s self-driving vehicle unit Cruise. A filing shows NHTSA has received complaints about the vehicles engaging in “inappropriately hard braking” or becoming “immobilized while operating.” The regulator said, “This may introduce multiple potential hazards such as a collision with a Cruise vehicle, risk to a stranded passenger exiting an immobilized Cruise vehicle, or obstruction of other traffic including emergency vehicles.” NHTSA is investigating about 240 of the vehicles retrofitted with the Cruise software system. Cruise is currently awaiting regulatory approval to expand its robotaxi service in San Francisco. Coinbase Drops As Crypto Uncertainty Continues Coinbase (COIN) shares are falling 2.3% ahead of the open as uncertainty and volatility continue in the crypto market. Binance announced today that accounting firm Mazars Group has suspended all work with its crypto clients. Those clients included Binance, KuCoin, and Crypto.com. This comes after the collapse of FTX.com has caused uncertainty about other crypto firms and assets across the market. Bitcoin prices are down nearly 3% in the past 24 hours, dropping below $17,000. Ethereum is down 5% in the past 24 hours to just over $1,200. In Case You Missed It Two key manufacturing indexes contracted more than expected in early December. The Philadelphia Fed’s manufacturing index came in at -13.8 vs -12 expected but that was an improvement from -19.4 in November. Meanwhile, the Empire State manufacturing index dropped to -11.2 vs -0.5 expected, down sharply from 4.5 in November. Both of these surveys are seen as barometers for the national manufacturing sector. Any reading below 0 indicates deteriorating business conditions. S&P Global releases its flash U.S. manufacturing PMI at 9:45 a.m. ET today.
Continue Reading -->Coffee With Greta: Stocks Slide As Retail Sales Disappoint
DJIA Futures: -374 (-1.1%) SPX Futures: -54 (-1.4%) NASDAQ Futures: -201 (-1.7%) Good morning friends! Futures are sliding after the release of disappointing retail sales data. Let’s get right to it! Retail Sales Drop More Than Expected Retail sales fell more than expected in November as consumers shift their spending habits due to high inflation. The Census Bureau reported retail sales fell 0.6% to $689.4 billion. That was worse than economists’ expectations for a 0.3% decline. Retail sales were still up 6.5% year over year. Core retail sales, which exclude auto sales and gas stations, also fell 0.2% monthly and were up 6.7% annually. Sales dropped 2.3% at car dealers and parts stores, fell 2.6% at furniture and decor retailers, declined 1.5% at electronics and appliance stores, fell 2.5% at building materials retailers. Grocery store sales rose 0.8%, health and personal care store sales rose 0.7%, and restaurant and bar sales rose 0.9%. Weekly Jobless Claims Drop to 11-Week Low Weekly jobless claims fell to an 11-week low in early December. The Labor Department reported 211,000 Americans filed initial unemployment claims last week. That was down by 20,000 from the previous week and better than 232,000 expected. Continuing claims rose by 1,000 to 1.67 million in the week ending December 3. ECB Hikes Rates, Announces Balance Sheet Reduction The European Central Bank followed the Fed’s lead overnight, implementing a 50 basis point rate hike. That takes the bank’s key rate from 1.5% to 2% and is the fourth rate hike this year. The ECB also announced it will begin reducing its balance sheet in March 2023 by 15 billion euros per month on average. That balance sheet reduction will continue through the end of Q2 2023. Musk Sells Off More Tesla Shares Tesla (TSLA) shares are down 3% ahead of the open after a new filing showed CEO Elon Musk sold off more of the stock this week. The SEC filing shows Musk sold about 22 million more shares worth around $3.6 billion between Monday and Wednesday of this week. Many believe the recent sales are linked to Musk’s $44 billion takeover of Twitter. He told Twitter employees after that deal closed that he sold Tesla shares to “save” their business. In Case You Missed It The Fed hiked the federal funds rate as expected by 50 bps on Wednesday. That puts the rate in a target range of 4.25% to 4.5%, the highest in 15 years. The Fed’s dot plot shows officials expect rates to top out at 5.1% in 2023 with rate cuts not beginning until 2024. The FOMC expects 1% of rate cuts in 2024 and 1% of cuts in 2025, with the longer-run neutral rate at 2.5%.
Continue Reading -->Coffee With Greta: FOMC In Focus
DJIA Futures: +6 (+0.02%) SPX Futures: -3 (-0.1%) NASDAQ Futures: -12 (-0.1%) Good morning friends! Futures are flat as traders await today’s Fed decision. Let’s get right to it! FOMC In Focus The Federal Open Market Committee releases its rate hike decision at 2:00 p.m. ET today. CME Group’s FedWatch Tool still shows 79.4% of traders expecting the Fed to vote for a 50 bps hike. That would be a pivot to smaller moves after four consecutive 75 bps hikes so far this year. The hike comes after new data on Tuesday showed consumer inflation slowing to an annual pace of 7.1%. That was lower than expectations but is still more than 3.5x the Fed’s target rate of 2%. Traders will also be focused on the Fed’s summary of economic projections and where that shows rates peaking in 2023. Fed Chair Jerome Powell speaks at 2:30 p.m. ET. Mortgage Demand Rises Amid Lower Rates Mortgage application volume is rising again as rates have cooled. The Mortgage Bankers Association reported total applications rose 3.2% last week compared to the previous week. Purchase applications rose 4% weekly and were down 38% year over year. Refinance applications rose 3% weekly but were still 85% lower on an annual basis. The average 30-year fixed contract rate increased slightly to 6.42% from 6.41%. But that’s down from the peak of just over 7% in October Delta Rallies On Strong Forecast Delta Airlines (DAL) shares are up 3.9% ahead of the open after the company hiked its 2023 outlook. The airline expects adjusted EPS to nearly double next year to as much as $6 per share. The company also forecast a 15% to 20% increase in revenue next year from this year. And free cash flow is expected to rise to more than $4 billion in 2023 from more than $2 billion this year. CEO Ed Bastian said, “Demand for air travel remains robust as we exit the year and Delta’s momentum is building.” Delta also raised its Q4 earnings forecast to a range of $1.35 to $1.40 per share up from $1 to $1.25 per share previously. Total revenue is also expected to be 7% to 8% higher than Q4 2019. Oil Prices Rise On Optimism for 2023 Demand Oil prices are rising this morning amid forecasts for demand to rise in 2023. West Texas Intermediate crude futures are up 0.7% to $76 bbl while Brent crude futures are up 0.7% to over $81 bbl. New data from the American Petroleum Institute on Wednesday showed U.S. crude inventories rose unexpectedly by 7.8 million barrels last week. The Energy Information Administration reports official supply levels later today. Meanwhile, the International Energy Agency raised its 2023 oil demand estimate by 1.7 million barrels per day, now totaling 101.6 million bpd. OPEC also said it is expecting oil demand to grow by 2.25 million bpd in 2023 to 101.8 million bpd.
Continue Reading -->Coffee With Greta: Stocks Surge On Cool CPI
DJIA Futures: +709 (+2.1%) SPX Futures: +109 (+2.7%) NASDAQ Futures: +446 (+3.8%) Good morning friends! Futures are surging after the release of cooler-than-expected inflation data. Let’s get right to it! CPI Cools More Than Expected Consumer prices cooled more than expected in November in a sign the Fed’s rate hikes are working to slow inflation. The Bureau of Labor Statistics’ consumer price index rose 0.1% monthly and 7.1% year over year last month. That was better than economists’ expectations for +0.3% monthly, +7.3% annually. Shelter and food prices continued to rise while energy prices dropped. Grocery prices rose 0.5% monthly and 12% year over year while shelter prices rose 0.6% monthly and 7.1% annually. Those gains were offset by the 2% monthly drop in gas prices, 3.5% monthly decline in utility gas prices, and 2.9% drop in used car and truck prices. The core CPI, which excludes food and energy, also cooled more than expected. Core prices were up 0.2% monthly and 6% year over year vs +0.3% monthly and +6.1% annually expected. Yields Tumble After CPI Treasury yields are tumbling this morning after the release of that better than expected inflation data. The 2-year yield is down 13 basis points to 4.23% while the 10-year yield is down 9 basis points to 3.48%. CME Group’s FedWatch Tool now shows 79.4% of traders expecting the Fed to pivot to a smaller 50 basis point rate hike this week. The central bank kicks off its policy meeting today with the rate hike decision set to be released at 2:00 p.m. ET on Wednesday. Oil Prices Climb On Supply Disruptions, Optimism About China Oil prices are higher this morning as the market faces supply disruptions and Covid restrictions continue to ease in China. West Texas Intermediate crude futures are up 1.9% to over $74.50 bbl while Brent crude futures are up 2.1% to over $79.50 bbl. The Keystone Pipeline which ships Canadian crude to the U.S. is still shutdown after a rupture last week. The timetable to restart that pipeline is still unclear. That shutdown has raised expectations U.S. crude inventories will decline sharply. The American Petroleum Institute releases the first report of supply levels at 4:30 p.m. ET today. Oracle Rallies On Earnings Beat Oracle (ORCL) shares are up 4.6% ahead of the open after beating fiscal Q2 expectations. Here’s how the software company’s results compared to analysts’ expectations: Adjusted EPS: $1.21 vs $1.17 expected Revenue: $12.28 billion vs $11.96 billion expected The CEO called for revenue to increase 17% to 19% in fiscal Q3. That suggests a total between $12.3 billion and $12.5 billion. Oracle guided for adjusted EPS of $1.17 to $1.21. Analysts were estimating adjusted EPS of $1.23 on $12.21 billion in revenue. In Case You Missed It Consumer inflation expectations improved in November. The New York Fed’s survey of consumer expectations showed respondents see inflation at 5.2% one year from now. That was down 0.7% from the October reading and the lowest since August 2021. The three year projection also improved by 0.1% to 3% while the five year outlook declined by 0.1% to 2.3%.
Continue Reading -->Coffee With Greta: Key Fed Week
DJIA Futures: +85 (+0.3%) SPX Futures: +12 (+0.3%) NASDAQ Futures: +39 (+0.3%) Good morning friends! Futures are rising as traders get ready for a key week of data and the December Fed decision. Let’s get right to it! Traders Look Ahead To CPI and The Fed The market is gearing up for a big week of economic data. Things kick off with the release of the November CPI Tuesday morning at 8:30 a.m. ET. That index is expected to show headline inflation cooled last month to a 0.2% monthly pace and 7.3% annually. The Core CPI is expected to rise 0.4% monthly and 6.1% year over year. But both the headline and core PPI came in hotter than expected on a monthly basis last Friday. Following that key inflation data, traders have their focus on the Fed. The FOMC’s latest rate hike decision will be released at 2:00 p.m. ET on Wednesday. CME Group’s FedWatch Tool shows 74.7% of traders expecting the central bank to pivot to a smaller 50bps rate hike this week as inflation pressures begin to show signs of cooling. Amgen to Acquire Horizon Therapeutics Horizon Therapeutics (HZNP) are surging 14.8% ahead of the open after Amgen (AMGN) announced it will acquire the biopharmaceutical company. Horizon shareholders will received $116.50 per share for every share they own. The deal is valued at approximately $26.4 billion while Amgen said it has an enterprise value of about $28.3 billion. Horizon develops potential treatments for rare autoimmune and inflammatory diseases. Coupa Software To Go Private Coupa Software (COUP) shares are rallying 26.9% in premarket trade after private equity firm Thoma Bravo announced it will buy the business software company in an all-cash deal. Thoma Bravo will pay $81 per share with the deal totaling $6.15 billion. The deal reportedly has an enterprise value of $8 billion. The firm has been buying up lower-valued public companies over the past two years including Ping Identity, Sophos, Proofpoint, and Sailpoint Technologies. Rivian Ditches Europe EV Van Plans with Mercedes-Benz Rivian (RIVN) shares are slipping 0.4% ahead of the open after announcing it is pausing plans to manufacture electric commercial vans in Europe with Mercedes-Benz. The company said it would “no longer pursue” the agreement. Rivian’s CEO said, “We’ve decided to pause discussions with Mercedes-Benz Vans regarding the Memorandum of Understanding we signed earlier this year for joint production of electric vans in Europe.” He said the company believes focusing on its consumer business and its existing commercial business “represent the most attractive near-term opportunities to maximize value for Rivian.” But the company said it does remain open to exploring future opportunities with Mercedes-Benz “at a more appropriate time for Rivian.” In Case You Missed It Consumer sentiment improved unexpectedly in early December. The University of Michigan’s consumer sentiment index rose to 59.1 from 56.8. That topped expectations for the index to fall to 56.5. Consumers’ short-term inflation expectations also improved. The survey showed Americans expect inflation to be at 4.6% 1 year from now and still 3% 5 years from now.
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