Coffee With Greta: New Year Rally Fizzles

DJIA Futures: -268 (-0.8%)

SPX Futures: -32 (-0.8%)

NASDAQ Futures: -101 (-0.9%)

Good morning friends!

Futures are falling as the January rally fizzles out amid fears the Fed will over-tighten.

Let’s get right to it!

December Housing Starts & Building Permits

New home construction fell less than expected at the end of 2022. 

The Census Bureau reported housing starts slumped 1.4% to a seasonally adjusted annual rate of 1.382 million units from a revised 1.401 million in November. 

That was better than expectations for a drop to 1.359 million units.

But it was still the fourth straight month of declining building activity.

Single-family starts surged 11.3% monthly but were still down 25% year over year while multi-family starts tumbled 18.9% monthly and were 16.3% lower compared to a year ago.

The slowdown in building is expected to continue as permits fell in December. 

The number of new permits authorized dropped 1.6% last month to a seasonally adjusted annual rate of 1.33 million units from a revised 1.351 million in November.

Permits were expected to rise to 1.37 million. 

Single-family permits fell 6.5% monthly and 34.7% year over year while multi-family permits rose 7.1% monthly but were down 21.8% from a year ago.

Weekly Jobless Claims Fall Unexpectedly

Weekly jobless claims fell unexpectedly last week to a four-month low. 

The Labor Department reported 190,000 Americans filed initial claims for unemployment benefits. 

That was down by 15,000 from the week before and lower than expectations for an increase to 215,000.

It was the lowest total since September. 

Procter & Gamble Profits Fall

Procter & Gamble (PG) shares are falling 3.0% ahead of the open despite reporting fiscal Q2 results that were in line with expectations. 

Here’s how the consumer goods giant’s results compared to analysts’ estimates: 

• Adjusted EPS: $1.59, as expected
• Revenue: $20.77 billion vs $20.73 billion expected

Profits fell by $320 million year over year while revenue was down 1%. 

All of Procter & Gamble’s divisions reported lower sales volumes in the quarter as consumer demand falls. 

The company is still planning to hike prices further in the months ahead to make up for that lower sales volume. 

The CFO said consumers have reacted to higher prices “generally better than expected” and “consumers don’t stop washing their hands or doing their laundry.”

P&G expects 2023 sales growth between 4% and 5%, up from 3% to 5% previously. 

Bed Bath & Beyond Reportedly Looking For Buyer

Bed Bath & Beyond (BBBY) shares are up 1.0% in premarket trade amid reports the retailer has been in discussions with potential buyers and lenders ahead of a likely bankruptcy filing. 

Sources say the company is hoping to find a buyer that would keep both its major chains, Bed Bath & Beyond and Buybuy Baby, open. 

Bed Bath has also reportedly been looking for a lender to provide capital to keep it afloat through a bankruptcy filing. 

A company spokeswoman said Wednesday, “Multiple paths are being explored and we are determining our next steps thoroughly, and in a timely manner,”  but declined to comment further.

Key Earnings After The Close

Here are the major companies set to report earnings after the close today:

• Netflix (NFLX)

In Case You Missed It

• Homebuilder sentiment rose unexpectedly this month. The National Association of Homebuilders’ sentiment index improved to 35 from 31 in December. That broke a 12-month losing streak and was better than expectations for a decline to 30. The gain comes as mortgage rates have fallen at the start of the year and as the typically busy spring homebuying season approaches.