Coffee With Greta: Fed Chair Takes The Hot Seat


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Good morning friends!

Futures are higher as traders await day one of the Fed Chair’s testimony in Congress.

Let’s get right to it!

Fed Chair To Testify

Fed Chair Jerome Powell is set to testify in the House Financial Services Committee today. 

The testimony is day one of his Semi-Annual Monetary Policy Report to Congress. 

In his prepared remarks, Powell reiterates the Central Bank is not yet ready to start cutting rates. 

He says, “In considering any adjustments to the target range for the policy rate, we will carefully assess the incoming data, the evolving outlook, and the balance of risks. The Committee does not expect that it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.”

Powell emphasizes that the Fed will remain data dependent for future rate decisions as they remain concerned about not losing the progress made against inflation so far. 

He says, “We believe that our policy rate is likely at its peak for this tightening cycle. If the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year. But the economic outlook is uncertain, and ongoing progress toward our 2 percent inflation objective is not assured.”

His testimony is set to begin at 10:00 a.m. ET. 

Private Job Growth Weaker Than Expected

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

Payroll firm ADP reported private employers added 140,000 jobs last month vs 150,000 expected. 

That was still an increase from the revised 111,000 in January. 

Leisure and hospitality led the gains adding 41,000 jobs, construction added 28,000, trade, transportation and utilities added 24,000, finance added 17,000, and other services added 14,000. 

Overall, the services sector added 110,000 jobs while goods producers added just 30,000. 

Annual pay increased 5.1%, the smallest increase ADP has seen since August 2021. 

This data comes ahead of the official February jobs report on Friday which is expected to show the U.S. economy added 198,000 jobs with the unemployment rate unchanged at 3.7%.

Nordstrom Tumbles On Weak Guidance

Nordstrom (JWN) shares are dropping 11.1% ahead of the open after beating Q4 expectations but issuing weak guidance.

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

  • Adjusted EPS: $0.96 vs $0.88 expected
  • Revenue: $4.42 billion vs $4.39 billion

Nordstrom forecast full-year revenue will range from a 2% decline to a 1% gain year over year. 

The company expects full-year EPS between $1.65 and $2.05

Foot Locker Plunges After Earnings

Foot Locker (FL) shares are tumbling 15.5% in premarket trade after reporting a loss in the holiday quarter and issuing a soft outlook. 

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

  • Adjusted EPS: $0.38 vs $0.32 expected
  • Revenue: $2.38 billion vs $2.28 billion expected

On an unadjusted basis, Foot Locker lost $389 million, or $4.13 per share, in the quarter. 

Sales rose 2% year over year. 

The company forecast full-year adjusted EPS between $1.50 and $1.70 vs $1.40 to $2.30 expected.

Foot Locker expects full-year sales to be between down 1% and up 1%. 

Mortgage Demand Surges

Weekly mortgage demand surged last week as more homes were put on the market. 

The Mortgage Bankers Association reported purchase application volume jumped 11% from the previous week but was still down 8% from a year ago. 

That increase came as there were 14.8% more homes actively for sale in February vs the same time last year. 

The average 30-year fixed contract rate decreased slightly to 7.02% from 7.04%. 

Refinance applications rose 8% weekly and fell 2% annually. 

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