Coffee With Greta: Traders Anticipate Fed Pivot


DJIA Futures: +70 (+0.2%)

SPX Futures: +4 (+0.1%)

NASDAQ Futures: +13 (+0.1%)

Good morning friends!

Futures are rising as traders gear up for a busy earnings week and look ahead to a smaller rate hike next week. 

Let’s get right to it!

Fed Pivot Expected

Wall Street is feeling confident the Fed will continue to dial back the size of its rate hikes at the next meeting. 

CME Group’s FedWatch Tool shows 98.7% of traders expect the central bank to approve a 25 basis point move at the February 1st meeting. 

That would be the smallest rate hike since the current tightening cycle started in spring 2022. 

Spotify To Cut 6% Of Workforce

Spotify (SPOT) shares are up 5.6% ahead of the open after announcing layoffs this morning. 

The streaming giant said it plans to cut 6% of its workforce or roughly 600 jobs. 

The chief content and advertising business officer will also depart the company as part of a broader reorganization.

Spotify is the latest tech company to cut jobs in the face of lower ad spending amid the current demand downturn. 

Activist Investor Takes A Stake In Salesforce

Salesforce (CRM) shares are rising 4.5% in premarket trade following reports that activist investor Elliott Management has bought a large stake in the company. 

Elliott’s managing partner told Reuters, “We look forward to working constructively with Salesforce to realize the value befitting a company of its stature.”

He also called Salesforce “one of the preeminent software companies in the world.”

It’s unclear what Elliott may push for at Salesforce but the investment comes after the company announced job cuts and office closures earlier this year. 

Big Banks Team Up On New Digital Wallet

PayPal (PYPL) shares are falling 1.8% ahead of the open following reports that the nation’s largest banks are teaming up to create a new digital wallet.

JPMorgan Chase (JPM), Bank of America (BAC), and Wells Fargo (WFC) are all reportedly part of the project with four other banks. 

The Wall Street Journal reported the digital wallet would be managed by Early Warning Services LLC, which is the bank-owned company that operates Zelle. 

The digital wallet would be linked to shoppers’ debit and credit cards and the goal is to compete with PayPal and Apple’s (AAPL) Apple Pay. 

Busy Earnings Week

Earnings season picks up steam this week with several key companies reporting. Here’s a look at the highlights:

  • Tuesday AM: 3M (MMM), Johnson & Johnson (J&J), General Electric (GM)
  • Tuesday PM: Microsoft (MSFT)
  • Wednesday AM: Boeing (BA), Kimberly-Clark (KMB)
  • Wednesday PM: Tesla (TSLA)
  • Thursday AM: American Airlines (AAL)
  • Thursday PM: Intel (INTC) 
  • Friday AM: Chevron (CVX)

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