Coffee With Greta: Higher Unemployment Boosts Stocks


DJIA Futures: +27 (+0.1%)

SPX Futures: +13 (+0.3%)

NASDAQ Futures: +68 (+0.6%)

Good morning friends!

Futures are rising as the February jobs report shows signs of slowing inflation.

Let’s get right to it!

Unemployment Rises, Wage Gains Slip

U.S. job growth came in hotter than expected but the unemployment rate rose unexpectedly in February. 

The Labor Department reported the economy added 311,000 jobs last month vs expectations for a 225,000 gain. 

The unemployment rate rose to 3.6% vs expectations for it to be unchanged at 3.4%. 

Although February’s job growth was hotter than expected, it was a cooldown from January’s blowout number which was revised lower by just 13,000 to 504,000 jobs. 

Leisure and hospitality continued to lead the gains, adding 105,000 jobs.

Retail added 50,000, government added 46,000, and professional and business services grew by 45,000.

Information-related jobs declined by 25,000 while transportation and warehousing lost 22,000.

Average hourly earnings rose 4.6% year over year, below expectations for a 4.8% gain. 

On a monthly basis, wages rose 0.2% vs 0.4% expected.

Bitcoin Falls Below $20,000

Crypto prices continue to fall alongside stocks with the collapse of Silvergate Capital (SI) putting more pressure on the industry. 

Bitcoin gave up the $20,000 level earlier this morning before recovering some of those losses. 

Currently the coin is at $20,031, down 7.5% over the past 24 hours. 

Ethereum is down 8.5% at just over $1,400. 

Oracle Revenue Disappoints

Oracle (ORCL) shares are falling 4.9% ahead of the open after missing fiscal Q3 revenue expectations. 

Here’s how the software company’s results compared to analysts’ estimates:

  • Adjusted EPS: $1.22 vs $1.20 expected
  • Revenue: $12.4 billion vs $12.43 billion expected

The CEO forecast fiscal Q4 EPS of $1.56 to $1.60 on revenue of $13.62 billion to $13.85 billion. 

Analysts were estimating earnings of $1.47 per share on $13.75 billion in revenue.

Oracle also hiked its quarterly dividend by 25% to $0.40 per share.

That dividend will be paid on April 24 to all shareholders of record as of April 11.  

Gap Falls On Big Q4 Loss

Gap (GPS) shares are falling 8.1% in premarket trade after reporting a wider Q4 loss than expected. 

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

  • Loss per share: $0.75 vs $0.46 expected
  • Revenue: $4.24 billion vs $4.36 billion expected

Comparable sales were down 5% year over year while in-store sales dropped 3% and online sales plummeted 10%. 

Gap announced it was eliminating its chief growth officer role, effective immediately, while Athleta’s CEO also left the company on Thursday. 

The company said it plans to close 50 to 55 Gap and Banana Republic stores this year while opening 30 to 35 Athleta and Old Navy stores. 

DocuSign Drops Despite Earnings Beat

DocuSign (DOCU) shares are tumbling 13.5% ahead of the open despite beating Q4 expectations on the top and bottom line. 

Here’s how the online document signing company’s results compared to analysts’ estimates: 

  • Adjusted EPS: $0.65 vs $0.52 expected
  • Revenue: $659.6 million vs $641 million expected

Guidance was also in line with expectations with DocuSign saying it expects Q1 revenue of $639 million to $643 million. 

The CEO said, “We finished the year strong, delivering across our key financial metrics and making tangible progress on our strategic priorities. We are reshaping DocuSign to invest in our innovation roadmap and self-service capabilities.”

The company announced its CFO will stepdown later this year and the stock was downgraded by JPMorgan analysts to underweight from neutral. 

In Case You Missed It

  • General Motors (GM) shares dropped 4.9% on Thursday after the automaker announced it will offer voluntary buyouts to a “majority” of its salaried employees. CEO Mary Barra made that announcement in a letter sent to workers. The Voluntary Separation Program is part of GM’s efforts to cut $2 billion in costs over the next two years. All U.S. employees who have been with the company for five years or more are eligible for the program. Those approved for the program will receive one month of pay for every year they’ve worked for the company. 

Leave a Comment: