Coffee With Greta: Meta Bets Big On Its Future

DJIA Futures: -27 (-0.1%) 

SPX Futures: +30 (+0.7%)

NASDAQ Futures: +213 (+1.7%)

Good morning friends!

Futures are mixed with tech stocks rallying after a big stock buyback announcement from Meta.

Let’s get right to it!

Meta Surges

Meta Platforms (META) shares are surging 19.5% ahead of the open after beating Q4 revenue expectations. 

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

• EPS: $1.76 vs $2.26 expected
• Revenue: $32.17 billion vs $31.53 billion expected
• Daily Active Users (DAUs): 2 billion vs 1.99 billion expected
• Monthly Active Users (MAUs):  2.96 billion vs 2.98 billion expected
• Average Revenue per User (ARPU): $10.86 vs $10.63 expected

The market shook off the profit miss after the company also announced a $40 billion stock buyback. 

That was a signal the company is feeling good about its future.

Meta forecast Q1 revenue between $26 billion and $28.5 billion, in line with analysts’ estimates of $27.1 billion. 

CEO Mark Zuckerberg said, “Our management theme for 2023 is the ‘Year of Efficiency’ and we’re focused on becoming a stronger and more nimble organization.”

The company expects its total expenses in 2023 to range between $89 billion and $95 billion, lower than the previous outlook of $94 billion to $100 billion.

Meta’s bet on the metaverse continued to cost it money though. 

The company’s Reality Labs unit lost $4.28 billion in Q4 and $13.72 billion in all of 2022. 

Meta said, “Reality Labs operating losses in 2023 will grow significantly year-over-year.”

FedEx Laying Off Officers, Directors

FedEx (FDX) shares are up 3.1% in premarket trade after announcing it will lay off 10% of its officers and directors. 

The corporate job cuts are part of efforts to cut costs as consumer demand falls. 

The CEO said, “this was a necessary action to become a more efficient, agile organization.”

The cuts come on top of FedEx’s previously announced plan to slash $1 billion in costs by parking planes and shutting down some offices.

The company is aiming to cut about $3.7 billion total this fiscal year.

Tesla Expected To Increase Shanghai Output

Tesla (TSLA) shares are rising 2.6% ahead of the open following a Reuters report the automaker is planning to raise output at its Shanghai factory. 

The EV maker has reportedly seen increased demand following price cuts it announced in early January. 

A memo seen by Reuters said Tesla plans to produce a weekly average of nearly 20,000 units at the Shanghai location in February and March.

The move to increase production comes after the company cut output in December by about a third from November as it faced lower demand.

Weekly Jobless Claims Fall

Weekly jobless claims fell unexpectedly at the end of January. 

The Labor Department reported 183,000 Americans filed initial claims for unemployment benefits last week. 

That was down by 3,000 from the week before and lower than 195,000 expected. 

It was the lowest level of claims since April 2022. 

Continuing claims also fell by 10,000 to 1.66 million in the week ending January 21.

ECB Hikes Rates By 50bp

The European Central Bank voted in favor of another 50 basis point rate hike today. 

In a statement, the bank vowed to “stay the course in raising interest rates significantly at a steady pace.”

The ECB said it plans to hike by another 50bp in March and then future decisions will be data-dependent. 

Today’s hike put the eurozone’s key rate at 2.5%.

Although eurozone inflation fell for the third straight month in January, headline inflation remains at 8.5% as high energy prices squeeze consumers.

Key Earnings After The Close

Here’s a look at the companies set to report earnings after the close today:

• Apple (AAPL)
• Amazon (AMZN)
• Alphabet (GOOGL)
• Ford (F)

In Case You Missed It

• The Fed hiked rates as expected by 25bp on Wednesday. The FOMC voted unanimously for that hike and said more hikes are still appropriate. But stocks rallied after the Fed chair struck a more dovish tone during his press conference. Jerome Powell told reporters, “we can now say for the first time that the disinflationary process has started.” The market is betting on 2 rate cuts at the end of this year but Powell said, “Given our outlook, I don’t see us cutting rates this year, if our outlook comes true.”