Coffee With Greta: The Bear Just Missed…

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DJIA Futures: +272 (+0.9%)

SPX Futures: +43 (+1.1%)

NASDAQ Futures: +173 (+1.5%)

Good morning friends!

Futures are higher as the market looks poised for a Friday rally after two days of selling.

Let’s get right to it!

S&P 500 Inching Closer to Bear Market

The S&P 500 looks like it will avoid opening in bear market territory as the index teeters on the edge of that cliff.

The official closing level for a bear market is 3,837.25, which would be down 20% from the index’s most recent record in January. 

If the S&P slips into that territory it would be its first bear market since the pandemic plunge in March 2020.

The Nasdaq is already deep in a bear market, down 29% from its November record as of Thursday’s close.

The Dow has dropped more than 15% from its high. 

Even with today’s bounce, the Dow is on track for its first 8-week losing streak since 1932.

Both the S&P and the Nasdaq are on track for their seventh straight weekly loss.

Investors Flee To Bonds

The 10-year and 30-year Treasury yields are both flat, after tumbling on Thursday as investors flee to safety amid turmoil on Wall Street. 

Yields fall as more investors buy Treasury notes and bonds. 

Analysts say this week’s activity in the Treasury market shows investors are becoming increasingly concerned about the short-term future of the economy as the Fed tackles inflation.

Foot Locker Rises on Earnings Beat

Foot Locker (FL) shares are up 4.2% ahead of the open after beating Q1 profit expectations. 

The shoe retailer reported adjusted earnings of $1.60 per share on $2.18 billion in revenue.

Analysts were expecting adjusted EPS of $1.54 on $2.2 billion in revenue. 

Comparable-store sales fell 1.9% year over year and the company’s gross margin fell by 1% as supply-chain costs and markdowns rose.

Foot Locker forecast full-year earnings at the top range of its guidance. 

The company expects EPS to be between $4.25 and $4.60 in 2022.

Discount Retailer Ross Plunges On Earnings

Ross Stores (ROST) shares are tumbling 23.3% in premarket trade after missing Q1 expectations. 

The discount retailer reported earnings of $0.97 per share on $4.33 billion in revenue. 

That missed analysts’ expectations for EPS of $0.99 on $4.53 billion in revenue. 

It was also a sharp decline from EPS of $1.34 on $4.52 billion a year ago. 

Comparable-store sales dropped 7% compared to Q1 2021. 

Ross forecast same-store sales will fall 4% to 6% annually in Q2 with EPS between $0.99 and $1.07. 

Deere Slips Despite Earnings Beat

Deere & Company (DE) shares are down 5.7% ahead of the open despite beating Q1 expectations. 

The company reported earnings of $6.81 per share on $13.4 billion in revenue. 

That was better than analysts’ expectations for EPS of $6.69 on $13.2 billion in revenue. 

It was also an increase from Q1 2021 and Deere hiked its full-year earnings guidance.

The company now expects $7.2 billion in net income this year, up from $6.9 billion previously and higher than analysts’ estimates for $7 billion.

Palo Alto Networks Jumps On Outlook

Palo Alto Networks (PANW) shares are up 11.8% in premarket trade after beating fiscal Q3 expectations and hiking its full-year guidance. 

The cybersecurity company reported adjusted earnings of $1.79 per share on $1.39 billion in revenue. 

That topped expectations for adjusted EPS of $1.68 on $1.36 billion in revenue.

Revenue jumped 29% year-over-year.

Palo Alto’s CEO said, “We saw strong top-line growth in Q3, which is a testament to our teams’ consistent execution in capitalizing on the strong cybersecurity demand trends.”

The company hiked its full-year outlook, forecasting adjusted EPS between $7.43 and $7.46 per share and revenue between $5.481 billion and $5.501 billion. 

That beat analysts’ estimates for EPS of $7.29 on $5.46 billion in revenue.

Oil Prices Hold Steady

Oil prices are slightly higher today as the market weighs several factors. 

West Texas Intermediate crude futures are up 0.3% to $112.50 bbl while Brent crude futures are 0.3% higher at $112.40 bbl.

Concerns about slowing economic growth in the U.S. are offsetting expectations of a demand rebound in China. 

The EU is also still working to approve a sanctions package which includes a ban of Russian oil imports.

Both WTI and Brent are on track for their fourth straight weekly gain. 

U.S. Gas Prices Hit New Record

Average U.S. gas prices jumped to another record-high for the 11th day in a row today.

AAA shows the national average for a gallon of regular rose to $4.593 overnight.

Diesel slipped to $5.57/gal after touching $5.577 earlier this week.

Gas prices have been surging due to reduced refinery capacity in the U.S. on top of higher oil prices from Russia’s war in Ukraine. 

In Case You Missed It

• Existing home sales tumbled 2.4% in April as mortgage rates rose. The National Association of Realtors reported sales dropped to a seasonally adjusted annual rate of 5.61 million units vs 5.64 million expected. The median sales price jumped 14.8% year-over-year to a record $391,200. There were 1.03 million homes for sale at the end of April, representing a 2.2-month supply at the current sales pace.

• The Conference Board’s leading economic index fell 0.3% in April. That drop was unexpected as economists had forecast a flat reading. The decline was largely due to a decline in home building permits and consumer confidence. The Conference Board expects the U.S. economy will expand just 2.3% this year vs 5.6% in 2021.