Coffee With Greta: Nvidia Surprise

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SPX Futures: +35 (+0.8%)

NASDAQ Futures: +306 (+2.2%)

Good morning friends!

Futures are mixed as tech stocks rally after Nvidia’s blowout earnings report.

Let’s get right to it!

Nvidia Skyrockets

Nvidia (NVDA) shares are surging 29.0% ahead of the open after crushing Q1 expectations and hiking its Q2 guidance. 

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

• Adjusted EPS: $1.09 vs $0.92 expected
• Revenue: $7.19 billion vs $6.52 billion

Nvidia’s CEO said the company is seeing “surging demand” for its data center products and is going to have a “giant record year”. 

That group’s sales jumped 14% last quarter to $4.28 billion vs $3.9 billion expected.

Nvidia forecast $11 billion in Q2 sales, crushing analysts’ estimates for $7.15 billion.

Dollar Tree Shrinks After Cutting Guidance

Dollar Tree (DLTR) shares are falling 12.1% in premarket trade after missing Q1 earnings expectations and cutting its full-year profit outlook. 

Here’s how the discount retailer’s results compared to analysts’ estimates: 

• Adjusted EPS: $1.47 vs $1.53 expected
• Revenue: $7.32 billion vs $7.28 billion expected

Dollar Tree maintained its full-year revenue outlook but cut guidance for earnings. 

The company now expects EPS between $5.73 and $6.13 vs $6.30 to $6.80 previously. 

The CEO said, “We are adjusting our EPS outlook as we expect the elevated shrink and unfavorable sales mix to persist through the balance of the year. We still expect earnings to be more back-end loaded this year as the benefits of lower ocean freight rates flow through.”

Q1 GDP Growth Revised Higher

Economic growth in the first quarter was unexpectedly revised higher.

The Commerce Department’s second estimate shows annual GDP growth of 1.3% vs 1.1% initially estimated. 

The increase was primarily driven by an upward revision to inventory investment. 

Weekly Jobless Claims Lower Than Expected

Weekly jobless claims came in lower than expected last week. 

The Labor Department reported 229,000 Americans filed initial claims for unemployment benefits. 

That was an increase from the revised 225,000 in the previous week. 

The previous week was initially estimated at 242,000.

But mass fraud has been discovered in unemployment numbers in Massachusetts in recent weeks, which contributed to the apparent increase in nationwide unemployment.

The state says it is working to address the problem and will amend previous reports. 

That could reduce overall claims for the weeks of May 6 and May 13.

Debt Ceiling Talks Make Progress

House Speaker Kevin McCarthy says talks for a debt ceiling deal are making progress but the two sides still disagree on spending. 

After negotiators met at the White House on Wednesday, McCarthy said, “We will come to an agreement worthy of the American public and there should not be any fear. Money’s coming in [to the Treasury] every day.”

But lawmakers are still leaving Washington for Memorial Day recess beginning today, indicating no deal is close to needing a vote.

Rep. Steve Scalise said Wednesday, “If some new agreement is reached between President [Joe] Biden and Speaker McCarthy, members will receive 24 hours notice in the event we need to return to Washington for any additional votes, either over the weekend or next week.”

In response to the turmoil over the debt limit, credit rating agency Fitch places the United States’ AAA status on “rating watch negative”. 

The agency said, “The brinkmanship over the debt ceiling, failure of the U.S. authorities to meaningfully tackle medium-term fiscal challenges that will lead to rising budget deficits and a growing debt burden signal downside risks to U.S. creditworthiness.”