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 reporting capabilities to BlackRock clients. The offering will be available to clients of the bank’s portfolio management platform Aladdin. A BlackRock executive said this partnership will allow its clients to “manage their bitcoin exposures directly in their existing portfolio management and trading workflows.”