Coffee With Greta: Traders Await Powell

DJIA Futures: -114 (-0.3%)

SPX Futures: -7 (-0.2%)

NASDAQ Futures: -1 (-0.01%)

Good morning friends!

Futures are mostly lower as traders await a speech by Fed Chair Jerome Powell.

Let’s get right to it!

Powell On Deck

Fed Chair Jerome Powell is scheduled to speak at an event at the Economic Club of Washington today. 

Powell’s speech is expected to begin around 12:40 p.m. ET.

The market is monitoring this speech after the chairman struck a more dovish tone after last week’s rate hike. 

But after the January jobs report came in hot on Friday, Powell’s tone may shift back to be more hawkish.

Minneapolis Fed President Neel Kashkari maintained his hawkish stance in an interview with CNBC this morning. 

Kashkari said, “We have a job to do. We know that raising rates can put a lid on inflation. We need to raise rates aggressively to put a ceiling on inflation, then let monetary policy work its way through the economy.”

He sees the federal funds rate peaking at 5.4% later this year, from the current range of 4.5% to 4.75%. 

But other Fed officials see the terminal rate around 5.1%. 

Kashkari highlighted the continued strength in the labor market as an issue.

He said that data “tells me that so far we’re not seeing much of an imprint of our tightening to date on the labor market.”

Pinterest Slips On Q4 Revenue Miss, Weak Outlook

Pinterest (PINS) shares are falling 1% ahead of the open after missing Q4 sales expectations and issuing weak guidance. 

Here’s how the social media company's results compared to analysts’ estimates:

• EPS: $0.29 vs $0.27 expected
• Revenue: $877 million vs $886.3 million expected

Q4 revenue was up 4% year over year while overall sales for the year rose 9%. 

For the full-year, Pinterest logged a net loss of $96 million. 

The company forecast Q1 sales growth in the “low single digits” vs analysts’ expectations of 6.9% growth. 

But the CEO remains optimistic about the turnaround. 

He said, “While the industry as a whole is facing headwinds, we are adapting quickly to a changing macro environment and are committed to creating a more positive online experience for our users and advertisers.”

Bed Bath & Beyond Collapses

Bed Bath & Beyond (BBBY) shares are plummeting 37.5% in premarket trade after the company announced a new public offering to raise more than $1 billion.

The company will be offering shares of Series A convertible preferred stock, warrants to purchase Series A shares, and warrants to buy the common stock. 

Analysts see this as a last ditch effort to raise cash before a bankruptcy filing. 

Wedbush analysts lowered their price target on the stock to $0 after the announcement. 

Oak Street Health Rallies On CVS Acquisition News

Oak Street Health (OSH) shares are surging 34.6% ahead of the open on news CVS (CVS) is nearing a deal to buy the company. 

The Wall Street Journal reported today that CVS is close to an agreement to acquire Oak Street for about $10.5 billion including debt.

That would price the company around $39 per share, the stock closed at $25.96 on Monday. 

Oak Street operates more than 160 primary-care centers across 21 states and focuses on patients enrolled in Medicare.

Annual Trade Deficit Hits Record

The U.S. trade deficit widened less than expected in December but the annual gap hit a record-high.

The Commerce Department reported that gap increased 10% to $67.4 billion at the end of 2022. 

That was better than economists’ expectations of $68.5 billion.

Meantime, the annual deficit jumped 12.2% to $948 billion in 2022.

Exports rose 17.7% last year to $3 trillion while imports rose 16.3% to $4 trillion.