Coffee With Greta: Stocks Rip Higher As Inflation Slows
DJIA Futures: +408 (+1.3%) SPX Futures: +70 (+1.7%) NASDAQ Futures: +313 (+2.4%) Good morning friends! Futures are rallying on better-than-expected inflation data. Let’s get right to it! Inflation Cools More Than Expected U.S. inflation pressures slowed more than expected in July as gas prices fell from record highs. The Bureau of Labor Statistics’ consumer price index was unchanged on a monthly basis and rose 8.5% year-over-year. That was better than economists’ expectations for a 0.2% increase monthly and 8.7% annually. The slowdown was driven by a steep drop in oil and gas prices. Fuel oil prices fell 11% monthly but were still up 75.6% year over year. Gas prices dropped 7.7% monthly and were still 44% higher annually. Those drops helped offset rising costs for food and housing. Grocery prices rose 1.3% monthly and jumped 13.1% year over year. Shelter prices rose 0.5% monthly and 5.7% annually. The core CPI, which excludes food and energy prices, rose 0.3% monthly and 5.9% annually, unchanged from June. Coinbase Loses Over $1 Billion In Q2 Coinbase (COIN) shares are up 2.9% ahead of the open despite reporting a $1.1 billion second-quarter loss. The crypto exchange reported a loss of $4.98 per share on $808.3 million in revenue. That was worse than analysts’ expectations for a loss of $2.65 per share on $832.2 million in revenue. Revenue tumbled nearly 64% year-over-year as the crypto market collapsed. The profit loss included a $377 million non-cash cryptocurrency-related impairment charge. Coinbase’s own crypto assets were worth just $428 million at the end of Q2 compared to about $1 billion at the end of Q1. In a letter to shareholders, the company said, “Q2 was a test of durability for crypto companies and a complex quarter overall. Dramatic market movements shifted user behavior and trading volume, which impacted transaction revenue, but also highlighted the strength of our risk management program.” The company had 9 million monthly transacting users in Q2, down from 9.2 million in Q1. Coinbase forecast it will have 7 million to 9 million monthly transacting users in 2022, down from its previous forecast for up to 15 million. Roblox Plunges On Q2 Miss Roblox (RBLX) shares are tumbling 10.6% in premarket trade after missing Q2 expectations on the top and bottom line. The video game platform reported a loss of $0.30 per share on $639.9 million in revenue. That was steeper than analysts’ estimates for a loss of $0.21 per share and missed revenue expectations of $644.4 million. Roblox had 52.2 million average daily active users last quarter, down from 54.1 million in Q1. Average bookings per daily active user tumbled 21% year over year to $12.25. The Chief Business Officer remained optimistic about the future in an interview with CNBC saying, “We’re very much in investment mode and that’s going to put a little bit of drag on earnings, but these are investments that are the right investments for us to make that will pay off in the three-to-five-year timeframe.” Unity Software Cuts Outlook Unity Software (U) shares are 3.6% ahead of the open after reporting mixed Q2 results. The videogame software company reported an adjusted loss of $0.18 per share on $297 million in revenue. That was better than analysts’ expectations for a $0.21 per share loss but revenue fell short of estimates for $299.7 million. The results came hours after Applovin (APP) offered to buy Unity in an all-stock transaction worth $20 billion. Unity forecast Q33 revenue between $315 million and $335 million with full-year sales ranging between $1.3 billion and $1.35 billion. That was down from its previous full-year forecast for revenue between $1.35 billion and $1.43 billion. Analysts were expecting Q3 revenue of $34.37 million and $1.36 billion for the full-year. Sweetgreen Plummets After Slashing Outlook, Announcing Layoffs Sweetgreen (SG) shares are plunging 20.8% in premarket trade after cutting its 2022 forecast and announcing layoffs. The salad chain reported a loss of $0.36 per share on $124.9 million in revenue. That was in line with analysts’ profit loss expectations but lower than estimates for $130.2 million in revenue. Sweetgreen said it laid off 5% of its support center workforce and is downsizing to a smaller office building to lower operating costs. The company forecast full-year revenue of $480 million to $500 million, down from its previous forecast of $515 million to $535 million. Same-store sales are now expected to grow 13% to 19% year over year vs the prior forecast for 20% to 25% growth. Oil Prices Flat As U.S. Inventory Jumps Unexpectedly Oil prices are flat after an unexpected increase in U.S. inventories last week. West Texas Intermediate crude futures are up 0.1% at $90 bbl while Brent crude futures are up 0.03% at $96 bbl. The American Petroleum Institute reported Tuesday that U.S. crude stockpiles rose by 2.2 million barrels last week. Analysts were expecting a 400,000 barrel decline in inventories. The unexpected jump signals a potential drop in demand. The Energy Information Administration reports official inventory levels today. In Case You Missed It Confidence among small business owners rose more than expected in July. The NFIB Small Business Optimism Index rose to 89.9 from 89.5 in June. Economists were expecting the index to be unchanged. 37% of owners said inflation is their single most important problem, up 3% from June and the highest level since Q4 1979. NFIB’s Chief Economist said, “The uncertainty in the small-business sector is climbing again as owners continue to manage historic inflation, labor shortages, and supply chain disruptions.”
Continue Reading -->Coffee With Greta: Worker Productivity Tumbles In Q2
DJIA Futures: +3 (+0.01%) SPX Futures: -9 (-0.2%) NASDAQ Futures: -75 (-0.6%) Good morning friends! Futures are mostly lower as falling chip stocks weigh on the tech sector and new data shows worker productivity fell further in Q2. Let’s get right to it! Worker Productivity Drops, Labor Costs Soar U.S. productivity levels dropped again in the second quarter while labor costs continued to surge. The Labor Department reported worker productivity fell 4.6% annually in Q2 vs economists’ expectations for a 4.3% decline. This is the second straight quarterly decline in productivity. Hours worked rose 2.6% while output fell 2.1%. Unit labor costs jumped 10.6% quarterly and 9.5% year-over-year. That was steeper than the 8.2% annual gain in Q1. Micron Slips After Revenue Warning Micron Technology (MU) is falling 4.1% in premarket trade after issuing a revenue warning for the rest of the year. The chip maker said fiscal Q4 revenue “may come in at or below the low end of the revenue guidance range provided in our June 30 earnings call.” Executives said, “[W]e expect a challenging market environment in FQ4 22 and FQ1 23.” This comes a day after Nvidia (NVDA) warned its Q2 results will be weaker-than-expected on Monday. Spirit Tops Q2 Expectations Despite Surging Costs Spirit Airlines (SAVE) shares are up 0.7% ahead of the open after beating Q2 expectations. The discount airline reported an adjusted loss of $0.30 per share on $1.37 billion in revenue. That was better than analysts’ expectations for a loss of $0.46 per share on $1.35 billion in revenue. Revenue surged 59% year-over-year and was 34.9% higher than Q2 2019. Revenue per passenger, per flight jumped 24% from 2019 to $140.61. Spirit expects pre-tax margins in Q3 to range between negative 1% and positive 1%. The company plans to expand its schedule 14% from 2019 levels in Q3 and 25% in Q4. Novavax Craters on Unexpected Q2 Loss Novavax (NVAX) shares are plummeting 30.3% in premarket trade after reporting an unexpected profit loss in the second quarter and slashing its full-year guidance. The drugmaker reported a loss of $6.53 per share on $185.9 million in revenue. That sharply missed analysts’ expectations for earnings of $5.54 per share on $1.02 billion in revenue. Novavax now expects full-year revenue of $2 billion to $2.3 billion, a sharp downgrade from previous guidance for $4 billion to $5 billion. The company said it slashed guidance “account for several evolving market dynamics.” The CEO said the new forecast reflects an unexpected shortfall in demand for the company’s Covid vaccines. GoodRx Surges On Strong Q2 Results GoodRx (GDRX) shares are surging 29.4% ahead of the open after beating Q2 expectations on the top and bottom line. The company reported adjusted earnings of $0.06 per share on $191.8 million in revenue. That beat analysts’ expectations for adjusted EPS of $0.04 on $184.7 million in revenue. The company also announced it has addressed a previously disclosed issue with a major grocer. Tesla’s China Sales Slump Tesla (TSLA) shares are down 0.3% in premarket trade after reporting a sharp slowdown in China sales last month. The electric automaker delivered 28,217 vehicles from its factory in Shanghai in July. That was down sharply from a record 78,906 in June. 20,000 of those cars were exported and over 8,000 were delivered to Chinese customers. This drop was expected though as Tesla took some planned downtime last month to upgrade equipment at the assembly plant. But preliminary reports showed deliveries around 30,000. In Case You Missed It Consumer inflation expectations cooled in July. The New York Fed’s Survey of Consumer Expectations found Americans still expect inflation to be at a 6.2% annual pace a year from now. That’s down from the record-high 6.8% in June. In 3 years, consumers see inflation at 3.2% vs 3.6% in June. Americans expect home prices to rise just 3.5% over the next 12-months, the lowest reading since November 2020.
Continue Reading -->Are We Due For A Pullback?
Sami explains why he’s still bullish but explains the setup he sees for a possible market pullback. The buy setup he sees in Bitcoin Why ARKK appears to have bottomed The penny stock he really likes this week The 123 short setups he sees in DXC The hourly based breakdown in HAYW
Continue Reading -->5 Big Tech Names You Need to Watch
We have mixed markets around the world with an upbeat feel. Europe has green arrows and Asia is a bit muted. Last Friday, the markets took the hot jobs report in stride as SPX held 4107. Lots of sectors acted well to extend the active sequence intact from the June lows. We have the CPI on Wednesday. Stay nimble, take trades, and try not to get caught up in opinions. You need to avoid revenge trading and pain trades. 4167 is last week’s high. I don’t think we’ll hit new highs this year, but 4220 can happen in the weeks ahead. We’ll go day-by-day to measure the action. Now let’s go through 5 big names we should all be watching: TSLA went from $760 to $940 the past few weeks. Many traders got stopped out as it broke $915 to see a low of $856. We’ll see if the early strength holds today. I’d approach it slowly. AAPL led the move off the June lows to see a high of $166.59. It held in pretty well Friday, giving us the $163 area to trade against. I wouldn’t chase this open, that but that doesn’t mean it’s an easy short. MSFT was a great trade from $260 to $283+. I sold mine. It acted fine Friday and some bought the dip. Today it’s above $283.80. I’d trim into strength and buy dips. GOOGL lags a bit but I bought some calls early last week and some stock in case it wants to play catchup. It needs to hold $116. A strong move on volume above $118.78 and $119.69 will open the door for higher prices. META held $154-$155 and got out of the danger zone as it cleared $165 to see $172.50+. I put on a call spread for this Friday. We’ll see if it tries to play catch-up. It needs to clear $172 with power for that. Scott’s Positions Disclosure:
Continue Reading -->Coffee With Greta: Focus Turns To Inflation
DJIA Futures: +159 (+0.5%) SPX Futures: +25 (+0.6%) NASDAQ Futures: +99 (+0.7%) Good morning friends! Futures are rising as traders turn their focus to inflation and continue to digest earnings. Let’s get right to it! Focus Turns to Inflation The focus for traders this week is the July CPI report which will be released on Wednesday. That’s expected to show headline inflation slowed to 8.7% annually last month as gas prices cooled from the record-highs in June. But the core CPI is expected to increase to 6.1% from 5.9%. The data comes after the July jobs report crushed expectations last week. The inflation data this week will give the market more clarity on the Fed’s next rate hike. CME Group’s FedWatch Tool shows 68.5% of traders now expect another 0.75% rate hike at the September meeting. Tyson Reports Mixed Fiscal Q3 Results As Meat Prices Soar Tyson Foods (TSN) shares are falling 4.9% ahead of the open after reporting mixed fiscal Q3 results. The meat producer reported adjusted earnings of $1.94 per share on $13.5 billion in revenue. That missed analysts’ expectations for adjusted EPS of $1.97 but beat estimates for $13.31 billion in revenue. That profit miss came as demand fell for many of its products due to higher prices. Total sales volume fell 1.9% while prices rose 8.1% on average. Chicken volume fell 2.1% but sales increased 25.6% due to higher prices. Beef volume increased 1.3% and sales rose 1%. The company said the USDA has indicated domestic production of meat in fiscal 2022 should see flat annual growth compared to last year. Palantir Plunges On Surprise Q2 Loss Palantir (PLTR) shares are plunging 14.8% in premarket trade after reporting a surprise profit loss in the second quarter. The data analytics company reported a loss of $0.01 per share on $473 million in revenue. That missed analysts’ expectations for earnings of $0.03 per share but beat estimates for $471.3 million in revenue. Overall revenue rose 26% year-over-year with commercial revenue jumping 46%. Palantir said its commercial customer count increased 250% annually, growing from 34 customers to 119. The CFO blamed the profit miss on a decline in investments and marketable securities. But he said commercial growth is widespread. Palantir forecast Q3 revenue between $474 million and $475 million and full-year sales between $1.9 billion and $1.902 billion. Signify Health Surges On Possible CVS Takeover Signify Health (SGFY) shares are surging 17.2% ahead of the open amid reports CVS (CVS) is planning a takeover bid of the company. The Wall Street Journal first reported CVS is seeking to make a bid this week. The pharmacy chain said in its earnings last week it is looking to expand in home-health services. And Signify Health previously said it is exploring strategic alternatives, including a sale. Initial bids are due this week and CVS is expected to face competition. CVS shares are up 0.6% in premarket trade. Pfizer to Purchase Global Blood Therapeutics Global Blood Therapeutics (GBT) shares are up 4.7% ahead of the open after agreeing to be acquired by Pfizer (PFE). Pfizer will pay $68.50 per share for Global Blood. The deal is valued at about $5.4 billion, including assumed debt. GBT shares soared last week as original reports emerged the two companies were in talks for an acquisition. PFE shares are flat in premarket trade. Oil Prices Slide On Recession Fears Oil prices are sliding as demand concerns rise on fresh recession fears. West Texas Intermediate crude futures are down 1.1% at $88 bbl while Brent crude futures are down 1% at $94 bbl. New data also showed China imported just 8.79 million barrels of crude per day in July. That was up from the four-year low in June but still 9.5% lower than July 2021. In Case You Missed It Tesla (TSLA) shares are rising 2.2% after shareholders approved a 3-for-1 stock split last week. Each stockholder of record on August 17 will receive a dividend of 2 new shares for every one they own after the close on August 24. The stock will then begin trading on a split-adjusted basis on August 25. The Senate narrowly passed Democrats’ “Inflation Reduction Act” over the weekend. The legislation was approved in a 51-50 vote along party lines on Sunday, with the Vice President casting the tie-breaking vote. The bill is now headed to the House which plans to return from summer recess on Friday to approve it. The bulk of spending in the bill is focused on addressing climate change. It also addresses prescription drug pricing, puts a cap on insulin prices, includes a new 15% minimum tax on large corporations, and creates a new 1% excise tax on stock buybacks.
Continue Reading -->Coffee With Greta: Stocks Drop On HOT July Jobs Report
DJIA Futures: -189 (-0.6%) SPX Futures: -37 (-0.9%) NASDAQ Futures: -151 (-1.1%) Good morning friends! Futures are falling as a strong July jobs report gives the Fed more room to stay aggressive on inflation. Let’s get right to it! July Job Growth Crushes Expectations The Labor Department reported today that the U.S. economy added 528,000 jobs in July. That crushed economists’ expectations for a gain of 258,000. The unemployment rate slipped to 3.5% vs 3.6% expected. And wage gains also continued with average hourly earnings up 0.5% monthly and 5.2% year-over-year. The Fed has been focused on those wage gains as they add fuel to already red hot inflation. The data shows the labor market maintaining strength, giving the Fed more room to continue aggressive rate hikes to fight inflation. But there are still more jobs to be recovered from before the pandemic as the labor force participation rate slipped to 62.1% from 62.2%. That’s still down from 63.4% in February 2020. The report also included upward revisions for May and June. May’s job growth was revised higher by 2,000 to show 386,000 jobs added while June was revised higher by 26,000 to show 372,000 jobs added. DoorDash Reports Record Number of Orders DoorDash (DASH) shares are up 5.4% ahead of the open after mixed Q2 results. The food delivery service reported a loss of $0.72 per share on $1.61 billion in revenue. That was steeper than analysts’ expectations for a loss of $0.41 per share but beat revenue estimates for $1.52 billion. DoorDash said it delivered 426 million orders last quarter, up 23% year-over-year and a record-high. The company did warn it expects a “softer consumer spending environment” in the second half of the year. Because of uncertainty about how quickly consumer activity will shift, DoorDash forecast adjusted EBITDA to fall between $25 million and $75 million in Q3. Lyft Rallies on Earnings Beat Lyft (LYFT) shares are rising 5.8% in premarket trade after its strongest quarterly results since before the pandemic. The ride-hailing company reported adjusted earnings of $0.13 per share on $990.7 million in revenue. That topped analysts’ expectations for a loss of $0.04 per share on $989 million in revenue. Lyft said it had 19.86 million riders in Q2, up by more than 2 million year-over-year and in line with estimates. Revenue per ride came in at $49.89, above analysts’ estimates for $49.30. The co-founder and president said, “We feel great about what we did this quarter. We generated our highest adjusted Ebitda, added more than 2 million riders, and saw a recovery in the driver side.” Lyft forecast Q3 revenue between $1.04 billion and $1.06 billion, just shy of analysts’ expectations for $1.1 billion. The company expects adjusted EBITDA of $55 million to $65 million vs $61 million expected by analysts. AMC Revenue Surges, Company Announces New APE Shares AMC (AMC) shares are dropping 9.5% ahead of the open despite beating Q2 expectations. The theater chain reported an adjusted loss of $0.20 per share on $1.17 billion in revenue. That was better than analysts’ expectations for a loss of $0.23 per share and in line with revenue estimates. CEO Adam Aron said movies like “Top Gun: Maverick” and Jurassic World: Dominion” drove sales during the quarter. Global attendance surged 168%. AMC also announced it will issue a dividend to all shareholders in the form of preferred shares. The company applied to list those preferred shares under the ticker symbol APE. Aron said, “Today we are rewarding and recognizing our passionate and supportive shareholders, both to our shareholders in the U.S. and internationally. Shareholders will receive one AMC Preferred Equity unit for each company-issued share of AMC common stock that they own.” AMC expects to issue a dividend of about 517 million APE units later this month and the shares will start trading on August 22. The CEO said, “Given the flexibility that APEs will give us, we likely will be able to raise money if we need or so choose, which immensely lessens any survival risk as we continue to work our way through this pandemic to recovery and transformation.” Beyond Meat Cuts Outlook, Announces Job Cuts Beyond Meat (BYND) shares are falling 4.1% in premarket trade after missing Q2 expectations and lowering its full-year forecast. The alternative meat company reported a loss of $1.53 per share on $147 million in revenue. That was worse than analysts’ expectations for a loss of $1.18 per share on $149.2 million in revenue. Beyond forecast full-year revenue between $470 million and $520 million, down from its prior forecast of $560 million to $620 million. The company cited inflation, rising interest rates, and recession concerns for that downgrade. Beyond also announced it will lay off about 4% of its global workforce. Amazon to Acquire iRobot iRobot (IRBT) shares are surging 19.1% ahead of the open after Amazon (AMZN) announced plans to acquire the robot vacuum maker. Amazon will acquire iRobot for $61 per share. The all-cash deal values the company at $1.7 billion. The hardware devices chief at Amazon said, “Customers love iRobot products — and I’m excited to work with the iRobot team to invent in ways that make customers’ lives easier and more enjoyable.” The current iRobot CEO will continue to run the company after the deal closes. Oil Prices Flat Oil prices are flat but on track for weekly losses as demand concerns weigh on the market. West Texas Intermediate crude futures are up 0.1% to over $88 bbl while Brent crude futures are up 0.1% to over $94 bbl. The market has been in a volatile back and forth over supply worries and demand concerns. But the demand worries seemed to win this week after the EIA reported another drop in U.S. gasoline demand. In Case You Missed It Coinbase (COIN) shares rallied 10% on Thursday after the crypto exchange announced a partnership with BlackRock (BLK) that will allow its institutional clients to buy bitcoin. Coinbase will provide crypto trading, custody, prime brokerage, and
Continue Reading -->Coffee With Greta: Lucid Slashes Production Goals Again
DJIA Futures: +18 (+0.1%) SPX Futures: +6 (+0.1%) NASDAQ Futures: +31 (+0.2%) Good morning friends! Futures are flat as traders digest fresh jobs data and earnings results. Let’s get right to it! Lucid Plunges After Cutting Production Target Lucid (LCID) shares are down 12.7% ahead of the open after missing Q2 sales expectations and slashing its 2022 production target. The electric automaker reported a loss of $0.33 per share on $97.3 million in revenue. That was better than analysts’ expectations for a loss of $0.39 per share but missed estimates for $145 million in revenue. Lucid delivered just 679 cars in Q2. Although the company said it has over 37,000 reservations for its Air sedan it still cut its full-year delivery guidance. Lucid now expects to deliver just 6,000 to 7,000 vehicles this year. The CEO said, “Our revised production guidance reflects the extraordinary supply chain and logistics challenges we encountered. We’ve identified the primary bottlenecks, and we are taking appropriate measures – bringing our logistics operations in-house, adding key hires to the executive team, and restructuring our logistics and manufacturing organization.” The company hired a former Stellantis (STLA) executive to serve as its senior vice president of operations. He will run Lucid’s manufacturing, logistics, and quality-control efforts. WeWork Slips On Weak Q2 Results WeWork (WE) shares are down 2.3% in premarket trade after reporting a wider loss than expected in Q2. The flexible workplace provider reported a loss of $0.76 per share on $815 million in revenue. That was worse than analysts’ expectations for a loss of $0.58 per share on $824.3 million in revenue. But WeWork’s adjusted EBITDA was negative $134 million, which was better than analysts’ estimates for negative $158.2 million. The company confirmed its full-year outlook. Alibaba Jumps on Earnings Beat Alibaba (BABA) shares are up 5.2% ahead of the open after beating fiscal Q1 expectations. The Chinese online retailer reporting earnings of $0.22 per share on $30.7 billion in revenue. That was better than analysts’ expectations for EPS of $0.20 on $30.3 billion in revenue. Revenue was flat year-over-year and dropped 1% in the Chinese commerce segment. That’s a sharp slowdown from the same time last year when revenue grew 34% annually. Alibaba did not provide forward guidance. Walmart Begins Corporate Layoffs Walmart (WMT) shares are flat in premarket trade after beginning corporate layoffs. The retailer confirmed it started those layoffs on Wednesday. Walmart said the cuts are an effort to “better position the company for a strong future.” The layoffs come after the company slashed its profit outlook just last week. A Walmart spokesperson said, “Shoppers are changing. Customers are changing. We are doing some restructuring to make sure we’re aligned.” It’s unclear how many employees will be cut and which divisions will be impacted. Weekly Jobless Claims Rise Weekly jobless claims rose again last week as the labor market remains tight. The Labor Department reported 260,000 Americans filed initial claims for unemployment benefits last week. That was up by 6,000 from the week before and in-line with economists’ expectations. Continuing claims also rose by 50,000 to 1.42 million in the week ending July 23. This data comes ahead of the July jobs report on Friday. That’s expected to show the U.S. economy added 258,000 jobs last month with the unemployment rate unchanged at 3.6%. Trade Deficit Narrows in June The U.S. trade deficit shrank more than expected in June. The Commerce Department reported that gap fell to $79.6 billion. That’s down 6.2% from May and lower than expectations for $80 billion. Exports rose 1.7% to $260.8 billion while imports fell 0.3% to $340.4 billion. Oil Prices Slip On Falling U.S. Fuel Demand Oil prices are slipping on concerns over low fuel demand in the U.S. West Texas Intermediate crude futures are down 0.2% to over $90 bbl while Brent crude futures are down 0.6% to over $96 bbl. The Energy Information Administration reported a drop in U.S. gasoline demand Wednesday. That demand fell to 8.59 barrels per day last week from 8.81 million barrels the week before. That was down sharply from 9.42 million barrels per day a year ago. The EIA report showed U.S. crude inventories rose by 4.5 million barrels last week. That sharply beat analysts’ expectations for a 1.7 million barrel increase. Gasoline stockpiles rose by 200,000 barrels vs expectations for a 1.5 million barrel drop. In Case You Missed It Ford (F) shares jumped 3.5% on Wednesday after the automaker reported strong July sales. The company sold 163,942 new vehicles last month, up 36.6% year-over-year and 7.7% from June. F-series pickup truck sales rose 21.1% annually and 10% monthly to 63,341. Electric vehicle sales surged 169% year-over-year to 7,700. Ford said it share of the EV market in the U.S. jumped to 10.9% in July.
Continue Reading -->Coffee With Greta: $HOODwinked! Robinhood Cuts More Jobs
DJIA Futures: +176 (+0.5%) SPX Futures: +25 (+0.6%) NASDAQ Futures: +84 (+0.7%) Good morning friends! Futures are higher as Wall Street looks to bounce back from back-to-back losing sessions. Let’s get right to it! Robinhood Announces More Lay Offs Robinhood (HOOD) shares are up 1% ahead of the open despite the company announcing new layoffs and mixed Q2 results. CEO Vlad Tenev announced the job cuts in a blog post on Tuesday. He said Robinhood is reducing its headcount by 23%. Those cuts will mostly impact operations, marketing, and program management positions. This is the second round of layoffs this year after the company cut 9% of its workforce in April. Tenev said since then, Robinhood has seen “additional deterioration of the macro environment, with inflation at 40-year highs accompanied by a broad crypto market crash. This has further reduced customer trading activity and assets under custody.” Impacted employees were notified immediately and will be able to stay on until October 1. Robinhood also reported mixed Q2 earnings on Tuesday. The company lost $0.34 per share on $318 million in revenue vs analysts’ expectations for a loss of $0.37 per share on $321 million in revenue. PayPal Rallies On Solid Q2 Results PayPal (PYPL) shares are rallying 13.5% in premarket trade after beating Q2 expectations. The digital payments platform reported adjusted earnings of $0.93 per share on $6.81 billion in revenue. That topped analysts’ expectations for adjusted EPS of $0.86 on $6.79 billion in revenue. PayPal had 429 million active accounts at the end of Q2, up 6% year-over-year but lower than analysts’ estimates for 432.8 million. Activist investment group Elliott Management, which owns a $2 billion stake in PayPal, said the company “has an unmatched and industry-leading footprint across its payments businesses and a right to win over the near- and long term.” PayPal also announced a new $15 billion share buyback program and said it has a “commitment to work with Elliott Investment Management L.P. on a comprehensive evaluation of capital return alternatives.” The company hiked its full-year forecast, expecting adjusted EPS between $3.87 and $3.97. That was better than analysts’ expectations for $3.82. AMD Slips On Weak Forecast Advanced Micro Devices (AMD) shares are down 4.3% ahead of the open despite beating Q2 expectations. The chipmaker reported adjusted earnings of $1.05 per share on $6.55 billion in revenue. That beat analysts’ expectations for adjusted EPS of $1.03 on $6.53 billion in revenue. Overall revenue rose 70% year-over-year. But AMD’s Q3 forecast came in short of estimates. The company expects $6.7 billion in revenue this quarter vs analysts’ expectations for $6.83 billion. Starbucks Rises On Q2 Earnings Beat Starbucks (SBUX) shares are up 1.7% in premarket trade after topping Q2 expectations. The coffee chain reported adjusted earnings of $0.84 per share on $8.15 billion in revenue. That was better than analysts’ estimates for adjusted EPS of $0.75 on $8.11 billion in revenue. Starbucks said inflation and higher wages weighed on its margins in Q2. Same-store sales in the U.S. rose 9% as higher prices pushed order totals higher. But sales outside the U.S. were down 18% as sales in China tumbled 44% due to renewed Covid lockdowns. The company declined to provide a full-year forecast citing uncertainty about those restrictions in China. Airbnb Slumps Despite Strong Q2 Airbnb (ABNB) shares are falling 6.8% ahead of the open despite reporting record profits in Q2. The vacation rental site reported earnings of $0.56 per share on $2.10 billion in revenue. That beat analysts’ expectations for EPS of $0.43 and was in line with revenue estimates. Revenue jumped 58% compared to Q2 2021, but that was down from the 70% annual growth in the first quarter. Airbnb said customers booked 103.7 million nights and experiences last quarter, a record high and up 24% compared to 2019. But that was shy of analysts’ expectations for 106.2 million nights and experiences booked. Airbnb also announced a $2 billion share buyback program. The CEO said, “Our Q2 results demonstrate that Airbnb has achieved growth and profitability at scale.” The company forecast record Q3 revenue between $2.78 billion and $2.88 billion, topping analysts’ estimates for $2.77 billion. CVS Beats Q2 Expectations, Hikes Guidance CVS (CVS) shares are up 4.1% in premarket trade after beating Q2 expectations and hiking its full-year forecast. The drugstore chain reported adjusted earnings of $2.40 per share on $80.64 billion in revenue. That topped analysts’ estimates for adjusted EPS of $2.17 on $76.37 billion in revenue. The CEO said, “Despite a challenging economic environment, our differentiated business model helped drive strong results this quarter, with significant revenue growth across all of our business segments.” Same-store sales rose 8% year-over-year. CVS administered more than 4 million Covid tests and 6 million vaccines in Q2, down from 6 million and 8 million in Q1. The company now expects full-year adjusted EPS between $8.40 and $8.60 vs its previous estimate between $8.20 and $8.40. Moderna Rises On Earnings Beat Moderna (MRNA) shares are up 4.5% ahead of the open after beating Q2 expectations on the top and bottom line. The biotech company reported adjusted earnings of $5.24 per share on $4.7 billion in revenue. That was better than expectations for adjusted EPS of $4.55 on $4.1 billion in revenue. $4.5 billion of that total revenue was Covid vaccine sales. Moderna said it took a nearly $500 million hit from expiring vaccinations. The company maintained its full-year forecast for $21 billion in Covid vaccine sales. Moderna also announced a $3 billion share buyback program. Nikola Wins Shareholder Approval To Issue More Stock Nikola (NKLA) shares are up 3.8% in premarket trade after shareholders voted in favor of the company’s plan to issue more stock. The CEO announced the measure had passed in a webcast on Tuesday. He did not reveal the margin of the vote but it required approval from owners of at least 50% of the company’s outstanding shares. Ex-CEO and founder Trevor Milton, who holds a 20% stake in the company, previously
Continue Reading -->Coffee With Greta: Stocks Drop As Tensions Ramp Up With China
DJIA Futures: -181 (-0.6%) SPX Futures: -29 (-0.7%) NASDAQ Futures: -123 (-1%) Good morning friends! Futures are slipping as tensions rise between the U.S. and China. Let’s get right to it! China Tensions Boil Ahead of Pelosi’s Taiwan Trip Tensions are rising between the U.S. and China as House Speaker Nancy Pelosi is expected to visit Taiwan. Reuters reported Pelosi will travel to Taiwan today and stay overnight. Chinese officials reportedly threatened to take action if she went through with the trip. The Chinese foreign ministry spokesman said, “We would like to tell the United States once again that China is standing by, the Chinese People’s Liberation Army will never sit idly by, and China will take resolute responses and strong countermeasures to defend its sovereignty and territorial integrity.” Pelosi would be the first House Speaker to visit Taiwan since Newt Gingrich in 1977. Pinterest Pops On Strong User Numbers Pinterest (PINS) shares are surging 18.8% ahead of the open after reporting better than expected Q2 user numbers. The social media site reported adjusted earnings of $0.11 per share on $666 million in revenue. That missed analysts’ expectations for adjusted EPS of $0.18 on $667 million in revenue. Pinterest’s global monthly active users fell 5% year over year to 433 million. That beat analysts’ estimates for a decline to 431 million. The company attributed the financial miss to the weakening advertising market. Pinterest’s outlook was also weak. The company said it expects Q3 revenue growth in the mid-single digits” annually vs analysts’ expectations for 12.7% growth. The company said, “The macroeconomic environment has created meaningful uncertainty for our advertiser partners.” Separately, activist investment group Elliott Management confirmed it is Pinterest’s largest shareholder and expressed confidence in the business. The group said, “As the market-leading platform at the intersection of social media, search and commerce, Pinterest occupies a unique position in the advertising and shopping ecosystems, and CEO Bill Ready is the right leader to oversee Pinterest’s next phase of growth.” Uber Jumps On Revenue Beat Uber (UBER) shares are rallying 13.8% in premarket trade after reporting mixed Q2 results. The ride-share giant reported a loss of $1.33 per share on $8.07 billion in revenue. That was worse than analysts’ expectations for a loss of $0.27 per share but topped estimates for $7.4 billion in revenue. The quarter included a $1.7 billion headwind due to equity investments. Uber had $382 million in free cash flow during the quarter, becoming cash flow positive for the first time ever. The CFO said, “We became a free cash flow generator in Q2, as we continued to scale our asset-light platform, and we will continue to build on that momentum.” Uber forecast Q3 adjusted EBITDA between $440 million and $470 million, crushing analysts’ estimates for $383.2 million. JetBlue Slips As Costs Surge JetBlue (JBLU) shares are falling 4.1% ahead of the open after missing Q2 expectations as costs surged. The airline reported an adjusted loss of $0.47 per share on $2.44 billion in revenue. That was worse than analysts’ estimates for an adjusted loss of $0.11 on $2.45 billion in revenue. That miss came as cost per available seat mile surged nearly 35% compared to 2019. JetBlue forecast it will return to profitability in the third quarter but capacity will still be 3% lower than Q3 2019. The CEO said, “We reported a record-breaking revenue result for the second quarter, and we’re on pace to top it again here in the third quarter and drive our first quarterly profit since the start of the pandemic.” The company forecast cost per available seat mile, excluding fuel, will rise 15% to 17% in the current quarter. Avis Budget Crushes Q2 Expectations Avis Budget (CAR) shares are up 4.6% in premarket trade after sharply beating Q2 expectations. The rental car company reported adjusted earnings of $15.94 per share on $3.24 billion in revenue. That smashed analysts’ expectations for adjusted EPS of $11.48 on $3.17 billion in revenue. Profits surged more than 170% year over year, while revenue jumped 36.7% annually. Avis executives said it was a record-breaking quarter for revenue. The CEO said those results were driven by “enhanced revenue generation, diligent fleet management, and stringent cost control.” Oil Prices Flat Oil prices are flat today as the back and forth between demand concerns and supply worries continues. West Texas Intermediate crude futures are up 0.7% to $94.50 bbl while Brent crude futures are up 0.5% to $100.50 bbl. Concern over lower demand mounted on Monday after new data showed a manufacturing downturn across the U.S., Europe, and Asia. But Wednesday’s OPEC+ meeting is still in focus as the group is set to decide on September output levels. The American Petroleum Institute releases its data on U.S. crude and gasoline inventories later today. Gas Prices Are Still Falling U.S. gas prices fell for the 47th day in a row today. AAA shows the national average for regular gas fell to $4.189/gal. The national average for diesel is down to $5.257/gal. Coming Up: JOLTS The Labor Department releases its June Job Openings and Labor Turnover Survey (JOLTS) at 10:00 a.m. ET. That survey is expected to show there were 11 million job openings in June. Although that would be a decline from 11.3 million in May, it would still show a major labor gap in the U.S. economy. There were 5.9 million unemployed workers in June. In Case You Missed It The Commerce Department reported Monday that construction spending tumbled 1.1% in June, sharply missing expectations for a 0.4% gain. Spending on private residential construction projects fell 1.6% while residential public construction spending rose 0.5%. Private nonresidential spending and public nonresidential spending both fell 0.5%.
Continue Reading -->Market Bias Turns Bullish
Sami explains how the market bias has turned bullish and what he is looking for to be all out bullish himself: His long strategy after the market bottom The 123 setup in CCI Why GSAT is primed for a breakout Why he likes real estate stocks like ABR short The 123 bearish continuation play in CINF and CYH
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