Coffee With Greta: Fed Decision Looms


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DJIA Futures: -28 (-0.1%)

SPX Futures: +2 (+0.04%)

NASDAQ Futures: +8 (+0.1%)

Good morning friends!

Futures are flat as traders await this afternoon’s Fed decision.

Let’s get right to it!

Private Job Growth Weaker Than Expected

The U.S. private sector added fewer jobs than expected in October. 

Payroll firm ADP reported private employers added 113,000 jobs last month vs 130,000 expected. 

That was still an increase from 89,000 in September.

Wages rose 5.7% from a year ago, the smallest annual gain since October 2021. 

Education and health services added the most jobs with 45,000 new workers. 

Trade, transportation and utilities added 35,000, financial activities added 21,000, and leisure and hospitality added 17,000. 

Nearly all of the added jobs were in service-providing industries with goods producers adding just 6,000. 

This report comes ahead of the official Labor Department jobs report on Friday. 

That’s expected to show the economy added 170,000 jobs in October with the unemployment rate unchanged at 3.8%. 

AMD Slips On Soft Q4 Guidance

Advanced Micro Devices (AMD) shares are down 0.4% ahead of the open after beating Q3 expectations but issuing a weak forecast. 

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

  • Adjusted EPS: $0.70 vs $0.68 expected
  • Revenue: $5.8 billion vs $5.7 billion expected

Revenue was up 4% year over year. 

The data center group reported $1.6 billion in sales, flat from a year ago. 

AMD’s Client group reported $1.5 billion in sales, up 42% year over year.

Sales in the gaming segment fell 8% from a year ago to $1.5 billion, due to fewer “semi-custom” chip sales.

AMD said it expects about $6.1 billion in Q4 sales vs $6.37 billion expected.

CVS Drops After Slashing Outlook

CVS Health (CVS) shares are dropping 4.6% in premarket trade after beating Q3 expectations but cutting its outlook. 

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

  • EPS: $2.21 vs $2.13 expected
  • Revenue: $89.8 billion vs $88.3 billion expected

But the company cut its full-year outlook for the third consecutive quarter. 

CVS now expects full-year earnings to be between $6.37 and $6.61, down from its original forecast of $7.73 to $7.93. 

The CEO said, “Despite a challenging business environment, we continue adapting to the changing needs of our consumers by connecting our care delivery capabilities in communities across the country, broadening access to care and lowering costs.”

Adjustable-Rate Mortgage Demand Jumps

Total mortgage demand continued to fall last week but buyers are increasingly turning to adjustable-rate mortgages. 

The Mortgage Bankers Association reported purchase applications fell 1% weekly and 22% year over year. 

Refinance applications dropped 4% weekly and 12% annually. 

But adjustable-rate applications jumped nearly 10% from the week before. 

ARMs made up 10.7% of all applications last week, the largest share in nearly a year. 

The average 30-year fixed contract rate decreased to 7.86% from 7.90% last week while the average 5/1 ARM rate decreased to 6.77%.

In Case You Missed It

  • U.S. home prices rose for the sixth month in a row in August. The S&P CoreLogic Case-Shiller 20-city house price index increased 1% from July vs 0.8% expected. The index was up 2.2% year over year. The national index also rose 0.9% monthly and 2.6% annually. 
  • Consumer confidence dropped to a five-month low in October. The Conference Board’s consumer confidence index fell to 102.6 from 104.3 in September. That was better than economists’ expectations for the index to fall to 100. Confidence in current economic conditions fell to 143.1 from 146.2. The six-month expectations index fell to 75.6 from 76.4, remaining below the 80 mark that is believed to signal a recession.

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