Coffee With Greta: PCE Inflation Cools


DJIA Futures: -24 (-0.1%)

SPX Futures: -16 (-0.4%)

NASDAQ Futures: -69 (-0.6%)

Good morning friends!

Futures are slipping despite new data showing inflation pressures continued to cool at the end of 2022 as disappointing earnings weigh on the market.

Let’s get right to it!

PCE Inflation Cools

The Fed’s favorite inflation gauge continued to cool in December. 

The Bureau of Economic Analysis’ personal consumption expenditures price index rose 0.1% monthly and 5% year over year. 

That was down from the 5.5% annual gain in November. 

The core PCE price index, which excludes food, energy, and trade services, rose 0.3% monthly and 4.4% year over year. 

That was also down from the 4.7% annual gain in November and in line with economists’ expectations. 

Intel Tumbles After Earnings Miss, Weak Guidance

Intel (INTC) shares are tumbling 9.8% ahead of the open after missing Q4 expectations and issuing weak guidance. 

Here’s how the chipmaker’s results compared to analysts’ expectations: 

  • Adjusted EPS: $0.10 vs $0.21 expected
  • Revenue: $14.04 billion vs $14.49 billion expected

Intel missed its own prior forecast of EPS of $0.20 on $14 billion to $15 billion in revenue. 

The tech company forecast an adjusted loss of $0.15 per share on revenue of about $10.5 billion to $11.5 billion in Q1. 

Intel also expects gross margins of just 34.1% in the current quarter, far off from the 51% to 53% goal the company set last year and down from 55.1% in Q1 2022. 

The company blamed an inventory glut for the expected struggles this quarter as customers work through an oversupply of chips.

The CEO told investors, “While we know this dynamic will reverse, predicting when is difficult.”

Chevron Slips As Earnings Come Up Short

Chevron (CVX) shares are down 1.4% in premarket trade after missing Q4 profit expectations. 

Here’s how the oil giant’s results compared to analysts’ expectations: 

  • Adjusted EPS: $4.09 vs $4.33 expected
  • Revenue: $56.47 billion vs $52.68 billion expected

For the full year, Chevron earned a record $36.5 billion in profit.

That was about $10 billion higher than its previous record set in 2011. 

The CEO said, “We delivered record earnings and cash flow in 2022, while increasing investments and growing U.S. production to a company record.”

Bed Bath & Beyond Defaults On Credit Line

Bed Bath & Beyond (BBBY) shares are up 1.5% ahead of the open as potential bankruptcy hopes rise after the retailer defaulted on its credit line with JPMorgan. 

In an SEC filing, Bed Bath said it “does not have sufficient resources to repay the amounts under the Credit Facilities and this will lead the Company to consider all strategic alternatives, including restructuring its debt under the U.S. Bankruptcy Code.”

The company’s debt load includes a $550 million asset-backed loan with JPMorgan, $375 million with lender Sixth Street, and nearly $1.2 billion in unsecured Treasury notes. 

In a separate filing today, Bed Bath said its Board has named restructuring expert Carol Flaton as an independent director.

Key Earnings Next Week

Earnings season continues to pick up steam next week. Here’s some of the major companies set to report:

  • SoFi (SOFI)
  • Exxon Mobil (XOM)
  • Pfizer (PFE)
  • McDonald’s (MCD)
  • UPS (UPS)
  • Caterpillar (CAT)
  • Advanced Micro Devices (AMD)
  • General Motors (GM)
  • Spotify (SPOT)
  • Snap (SNAP)
  • Meta Platforms (META)
  • Apple (AAPL)
  • Alphabet (GOOGL)
  • Amazon (AMZN)
  • Ford (F)

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