Coffee With Greta: Recession Alarms Go Off

DJIA Futures: +33 (+0.1%)

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Good morning friends!

Futures are falling flat after new data shows the U.S. economy contracted further than initially estimated in Q1.

Let’s get right to it!

Q1 GDP Contraction Was Worse Than Originally Estimated

The U.S. economy contracted further than originally estimated in the first quarter. 

The Commerce Department released its final Q1 GDP revision this morning, showing the economy shrank 1.6% annually. 

That was worse than the initial estimate of a 1.4% contraction.

All eyes are now on the first Q2 GDP estimate on July 28.

If that report shows another contraction it would meet the official criteria for a recession.

Bed Bath & Beyond Sales Plunge

Bed Bath & Beyond (BBBY) shares are tumbling 12.6% ahead of the open after missing fiscal Q1 expectations on the top and bottom line. 

The retailer reported a loss of $2.83 per share on $1.46 billion in revenue.

That was worse than analysts’ expectations for a loss of $1.39 per share on $1.51 billion in revenue. 

Same-store sales tumbled 24% year-over-year, worse than the 20.1% drop in the previous quarter. 

Bed Bath & Beyond also announced it is replacing CEO Mark Tritton. 

Sue Gove, who serves as an independent director on the board, will tak over as interim CEO. 

In a statement, Gove said, “We must deliver improved results. Our shareholders, Associates, customers, and partners all expect more.”

General Mills Tops Fiscal Q4 Expectations

General Mills (GIS) shares are up 2.4% in premarket trade after topping fiscal Q4 expectations on the top and bottom line.

The company reported adjusted earnings of $1.12 per share on $4.89 billion in revenue. 

That was better than analysts’ expectations for adjusted EPS of $1.03 on $4.81 billion in revenue.

Sales rose 8% year-over-year and General Mills said price increases helped offset supply chain challenges and higher costs. 

The Chairman and CEO said, “Though significant inflation and supply chain disruptions put pressure on our margins, we responded quickly to address those challenges and keep our brands on shelf for our customers and consumers.”

The company said it expects double-digit inflation on its costs of goods sold in the next fiscal year and plans to raise prices further. 

Gas Prices Continue to Tumble

U.S. gas prices are continuing to tumble.

AAA shows the national average for regular gas fell to $4.868/gal today. 

That’s down about 15 cents from the record high earlier this month. 

Diesel prices are also continuing to decline. 

The national average for diesel slipped to $5.78/gal today, down from the peak of $5.816/gal on June 19.

Oil Prices Rise on Supply Worries

Oil prices are rising for the fourth straight session as supply concerns outweigh economic growth worries.

West Texas Intermediate crude futures are up 1.5% at over $113 bbl while Brent crude futures are up 1.4% to just under $120 bbl. 

The market is concerned OPEC will not be able to make up for lost Russian oil supply. 

Saudi Arabia and the UAE have so far been seen as the only two countries with spare capacity to fill that gap. 

Tesla Begins Layoffs

Tesla (TSLA) shares are down 1% in premarket trade after the automaker layed off about 200 autopilot workers. 

CNBC confirmed the automaker is shutting down its office in San Mateo, CA and eliminating the jobs located there. 

The employees at that location labeled videos from Tesla cars to improve the Autopilot system. 

The layoffs are part of a wider cost-cutting effort at the company after CEO Elon Musk said he has a “super bad feeling” about the economy. 

Pinterest CEO Steps Down

Pinterest (PINS) shares are up 4.3% ahead of the open after announcing its CEO Bel Silbermann is stepping down. 

The company made that announcement after the close on Tuesday and said a former Google executive, Bill Ready, will take his place. 

Ready also previously served as the vice president and COO of PayPal (PYPL).

In a statement, Silbermann said, “In our next chapter, we are focused on helping Pinners buy, try and act on all the great ideas they see. Bill is a great leader for this transition. He is a builder who deeply understands commerce and payments.”

Ready said in a LinkedIn post, “As someone who has spent most of my career in commerce and payments, it’s so clear to me that Pinterest has the opportunity to build something unique—something special.”In Case You Missed It

• Consumer confidence tumbled to a 16-month low as Americans deal with high inflation. The Conference Board’s consumer confidence index fell to 98.7 this month from 103.2 in May. That was worse than economists’ expectations for 100. Confidence in current conditions fell to 147.1 from 147.4 while six month expectations plunged to 66.4 from 73.7.