All posts by Greta Wall
Coffee With Greta: Soft Jobs Report Boosts Stocks
Register now for next week’s free trading Q&A on LinkedIn with options specialist Dan Darrow! DJIA Futures: +149 (+0.4%) SPX Futures: +21 (+0.5%) NASDAQ Futures: +59 (+0.4%) Good morning friends! Futures are rising with yields tumbling after a weaker-than-expected October jobs report. Let’s get right to it! Soft Jobs Report The U.S. economy added fewer jobs than expected in October, which is good news for the Fed’s fight against inflation. The Labor Department reported nonfarm payrolls increased by 150,000 last month vs 170,000 expected. The unemployment rate rose unexpectedly to 3.9% vs expectations for it to hold steady at 3.8%. Average hourly earnings rose 0.2% monthly and 4.1% annually vs 0.3% monthly and 4% annually expected. The previous two months were also revised lower. September’s job gains were revised down by 39,000 to +297,000 with August revised down by 62,000 to +165,000. Apple Falls On Weak Outlook Apple (AAPL) shares are down 1.6% ahead of the open as a weak outlook overshadows the company’s fiscal Q4 earnings beat. Here’s how the iPhone maker’s results compared to analysts’ estimates: EPS: $1.46 vs $1.39 expected Revenue: $89.5 billion vs $89.28 billion expected iPhone revenue: $43.81 billion, as expected Mac revenue: $7.61 billion vs $8.63 billion expected iPad revenue: $6.44 billion vs $6.07 billion expected Wearables revenue: $9.32 billion vs $9.43 billion expected Services revenue: $22.31 billion vs $21.35 billion expected Gross margin: 45.2% vs 44.5% expected For the full year, Apple reported $383.29 billion in sales, down 3% year over year. But services revenue helped boost underperformance in other segments, jumping more than 15% from a year ago. While Apple did not give formal guidance, the CFO said the company expects current quarter revenue to “be similar to” last year. Analysts were expecting $122.98 billion in fiscal Q1 revenue, which would be growth of about 5%. Block Surges On Strong Guidance Block (SQ) shares are rallying 17.3% in premarket trade after beating Q3 expectations and issuing strong guidance. Here’s how the fintech company’s results compared to analysts’ estimates: Adjusted EPS: $0.55 vs $0.47 expected Revenue: $5.6 billion vs $5.4 billion expected Revenue jumped 24.4% year over year with gross profit up 21%. Block forecast Q4 gross profit of $1.96 billion to $1.98 billion vs $1.98 billion expected. The company expects adjusted ebitda of $430 million to $450 million, better than estimates. For the 2024 fiscal year, Block expects adjusted ebitda of $2.4 billion, well above $1.94 billion expected. In a letter to shareholders, the company said it believes it can achieve gross profit growth in the midteens and a mid-20% adjusted operating income margin in 2026. Block also announced a $1 billion share buyback plan. Coinbase Drops On Lower Trading Volume Coinbase (COIN) shares are down 2.5% ahead of the open after reporting a slump Q3 trading volume. Here’s how the crypto exchange’s results compared to analysts’ estimates: Loss per share: $0.01 vs $0.55 expected Revenue: $674 million vs $651 million expected Although smaller than expected it marked Coinbase’s seventh straight quarterly loss. The company said it had $76 billion in total trading volume last quarter, down from $92 billion in Q2, and $159 billion a year ago. But as the price of Bitcoin has risen since the end of Q3, Coinbase has seen a rise in volume.
Continue Reading -->Coffee With Greta: Earnings Rush
Register now for next week’s free trading Q&A on LinkedIn with options specialist Dan Darrow! DJIA Futures: +218 (+0.7%) SPX Futures: +39 (+0.9%) NASDAQ Futures: +197 (+1.3%) Good morning friends! Futures are up and yields are falling as traders bet the Fed is done hiking rates and digest a rush of earnings reports ahead of Apple this afternoon. Let’s get right to it! Starbucks Rallies On Earnings Beat Starbucks (SBUX) shares are rallying 10% ahead of the open after beating fiscal Q4 expectations on the top and bottom line. Here’s how the coffee giant’s results compared to analysts’ estimates: EPS: $1.06 vs $0.97 expected Revenue: $9.37 billion vs $9.29 billion expected Net sales climbed 11.4% year over year. Starbucks’ same-store sales rose 8% from a year ago vs 6.8% expected, due to higher average checks and a 3% increase in customer traffic. The average check in the U.S. rose 6% year over year. Starbucks forecast same-store sales growth of 5% to 7% in fiscal 2024, 10% to 12% revenue growth, and EPS growth of 15% to 20%. Peloton Sinks On Fiscal Q1 Miss Peloton (PTON) shares are sinking 6.2% in premarket trade after reporting a wider-than-expected loss for its fiscal first quarter. Here’s how the fitness company’s results compared to analysts’ estimates: Loss per share: $0.44 vs $0.34 expected Revenue: $595.5 million vs $591 million expected Connected fitness subscriptions: 2.96 million vs 2.99 million expected Subscription revenue of $415 million far outpaced hardware sales revenue of $180.6 million. Peloton forecast fiscal Q2 revenue between $715 million and $750 million, down 8% at the midpoint from a year ago and lower than $763.2 million expected. The company expects between 2.97 million and 2.98 million paid subscriptions during the current quarter, lower than 3.03 million expected. Shopify Skyrockets On Strong Earnings Shopify (SHOP) shares are surging 16.6% ahead of the open after topping Q3 expectations on the top and bottom line. Here’s how the e-commerce platform’s results compared to analysts’ estimates: Adjusted EPS: $0.24 vs $0.15 expected Revenue: $1.7 billion vs $1.67 billion expected Gross merchandise volume jumped 22% year over year to $56.2 billion vs $54.3 billion expected. Shopify forecast Q4 revenue growth in the high-teens percentage rate and full-year revenue growth in the mid 20% range Qualcomm Jumps After Solid Earnings, Strong Forecast Qualcomm (QCOM) shares are up 6.7% in premarket trade after beating fiscal Q4 expectations on the top and bottom line. Here’s how the chipmaker’s results compared to analysts’ estimates: Adjusted EPS: $2.02 vs $1.91 expected Adjusted Revenue: $8.67 billion vs $8.51 billion expected Net income dropped 48% year over year with adjusted revenue down 19%. Qualcomm forecast fiscal Q1 EPS between $2.25 and $2.45 on revenue between $9.1 billion and $9.9 billion. That topped analysts’ estimates for EPS of $2.23 on $9.2 billion in revenue. Roku Surges On Revenue Beat Roku (ROKU) shares are rallying 19.7% ahead of the open after reporting mixed Q3 results and a larger-than-expected increase in active accounts. Here’s how the streaming giant’s results compared to analysts’ estimates: Loss per share: $2.33 vs $2.04 expected Revenue: $912 million vs $857 million expected Active accounts: 75.8 million vs 75.3 million expected Revenue jumped nearly 20% year over year and active accounts were up by 2.3 million from the second quarter. Roku forecast Q4 revenue of about $955 million, better than expected. The company also projected $10 million in adjusted ebitda for the current quarter. Weekly Jobless Claims Hit 7-Week High Weekly jobless claims rose to the highest level in seven weeks. The Labor Department reported 217,000 Americans filed initial claims for unemployment benefits last week. That was up by 5,000 from the previous week and higher than 210,000 expected. Continuing claims rose by 35,000 to 1.818 million vs 1.800 million expected in the week ending October 21. This marks the sixth straight week continuing claims have increased. In Case You Missed It The Federal Reserve held interest rates steady in a range of 5.25% to 5.5% on Wednesday. The FOMC statement added language about tighter “financial conditions” impacting economic conditions, after the recent surge in Treasury yields. Chairman Powell said the committee is undecided on whether another rate hike will be needed in December and said they will remain “data dependent.”
Continue Reading -->Coffee With Greta: Fed Decision Looms
Register now for today’s free pro trader Q&A on LinkedIn with Scott Redler after the Fed decision! 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.
Continue Reading -->Coffee With Greta: End Of October
Register now for tomorrow’s free pro trader Q&A on LinkedIn with Scott Redler on Fed Day! DJIA Futures: +22 (0.1%) SPX Futures: +7 (+0.2%) NASDAQ Futures: +9 (+0.1%) Good morning friends! Futures are rising on the final day of what will be the third straight losing month for the S&P 500. Let’s get right to it! Month-End Yields are slipping and stocks are rising as traders gear up for the final day of October and look ahead to the Fed decision. The 10-year yield is down 6 basis points at 4.83% with the 2-year yield down 3 basis points at 5.03%. The Central Bank’s two-day policy meeting kicks off today with the rate decision released at 2:00 p.m. ET on Wednesday. CME Group’s FedWatch Tool shows over 98% of traders expecting the Fed to leave rates unchanged. Several officials have said in recent weeks they do not see the need for rates to move any higher thanks to the recent surge in Treasury yields. Pinterest Rallies On Q3 Earnings Beat Pinterest (PINS) shares are rallying 15.5% ahead of the open after beating Q3 expectations on the top and bottom line. Here’s how the social media company’s results compared to analysts’ estimates: Adjusted EPS: $0.28 vs $0.20 expected Revenue: $763.2 million vs $743.5 million expected Revenue jumped 11% year over year. Pinterest reported 482 million global monthly active users, up 8% from a year ago and higher than 473 million expected. Average revenue per user also beat at $1.61 vs analysts’ estimates of $1.59. The company forecast Q4 revenue growth of 11% to 13% vs 11.3% expected by analysts. Pfizer Drops After Revenue Miss Pfizer (PFE) shares are falling 1.2% in premarket trade after reporting mixed Q3 results. Here’s how the pharmaceutical giant’s results compared to analysts’ estimates: Adjusted loss per share: $0.17 vs $0.34 expected Revenue: $13.23 billion vs $13.34 billion expected Revenue plunged 42% year over year as Covid product sales plummeted. Pfizer’s Covid vaccine brought in just $1.31 billion in sales, down 70% from a year ago and lower than $1.53 billion expected. The Covid antiviral treatment Paxlovid posted $202 million in sales, down 97% and lower than $613.5 million expected. The company recorded a $5.6 billion charge for inventory write-offs during the quarter due to the lower-than-expected use of Covid products. Pfizer reiterated its lower full-year guidance from a few weeks ago. The company expected sales of $58 billion to $61 billion this year and adjusted EPS of $1.45 to $1.65. Caterpillar Drops On Weak Outlook Caterpillar (CAT) shares are down 4.9% ahead of the open despite beating Q3 expectations as the market focused on weak guidance. Here’s how the heavy equipment maker’s results compared to analysts’ estimates: EPS: $5.52 vs $4.80 expected Revenue: $16.8 billion vs $16.6 billion expected Revenue jumped from $15 billion a year ago, thanks to higher prices. Pricing added about $1.3 billion to sales in Q3 while volumes added about $350 million. But Caterpillar said it only expects Q4 revenue to be “slightly” higher year-over-year, indicating it could miss expectations. JetBlue Tumbles After Earnings JetBlue Airways (JBLU) shares are tumbling 9.8% in premarket trade after missing Q3 expectations and cutting its full-year guidance. Here’s how the airline’s results compared to analysts’ estimates: Adjusted loss per share: $0.39 vs $0.25 expected Revenue: $2.35 billion vs $2.38 billion expected For Q4, JetBlue now sees a loss per share of $0.35 to $0.55 vs $0.15 expected. The company also expects a full-year loss per share of $0.45 to $0.65 vs $0.05 to $0.40 previously. Analysts were estimating a full-year loss of just $0.25 per share.
Continue Reading -->Coffee With Greta: Big Week Kicks Off
Register now for this week’s free pro trader Q&A on LinkedIn with Scott Redler on Fed Day! DJIA Futures: +171 (+0.5%) SPX Futures: +22 (+0.5%) NASDAQ Futures: +92 (+0.6%) Good morning friends! Futures are rising as traders kick off a big week. Let’s get right to it! Important Week This will be a big week of data for the market, focused on the Fed and the labor market. Wednesday morning traders will get ADP’s private employment report for October at 8:15 a.m. ET and then the Labor Department’s JOLTS at 10:00 a.m. The Fed decision will then be released at 2:00 p.m. ET, followed by the Fed Chair’s press conference at 2:30. Friday is the official October jobs report from the Labor Department. There’s been increased focus on the labor market as inflation slowly comes down amid the Fed’s rate hikes. The Central Bank has said it needs to see weakening in the jobs market that it has not yet seen. Earnings Look Ahead On top of the important data this week, traders are still set to get some key earnings reports. Here’s the highlights: Tuesday AM: Pfizer (PFE), Caterpillar (CAT) Tuesday PM: Advanced Micro Devices (AMD) Wednesday AM: CVS Health (CVS) Wednesday PM: Qualcomm (QCOM), Airbnb (ABNB), PayPal (PYPL), DoorDash (DASH), Roku (ROKU) Thursday AM: Starbucks (SBUX), Shopify (SHOP), Moderna (MRNA) Thursday PM: Apple (AAPL), Block (SQ), Coinbase (COIN) McDonald’s Jumps On Earnings Beat McDonald’s (MCD) shares are up 2.6% ahead of the open after beating Q3 expectations on the top and bottom line. Here’s how the fast food giant’s results compared to analysts’ estimates: Adjusted EPS: $3.19 vs $3 expected Revenue: $6.69 billion vs $6.58 billion expected Revenue jumped 14% year over year. Global same-store sales rose 8.8% vs 7.8% expected. Same-store sales in the U.S. jumped 8.1%, fueled by price hikes. SoFi Rallies On Huge Revenue Beat SoFi Technologies (SOFI) shares are soaring 10.6% in premarket trade after sharply beating Q3 expectations. Here’s how the personal finance company’s results compared to analysts’ estimates: Adjusted loss per share: $0.03 vs $0.08 expected Revenue: $530.72 million vs $511 million expected The beat was largely due to a rush of student loan originations as borrowers prepared for payments to resume. SoFi originated $919.3 million worth of student loans in Q3, soaring past expectations for $651.5 million. Personal and home loan originations also beat at $3.89 billion vs $355.7 million expected. The company also lifted its full-year guidance. SoFi now expected adjusted net revenue of $2.045 billion to $2.065 billion this year vs $1.974 billion to $2.034 billion previously. The company forecast full-year adjusted Ebitda of $386 million to $396 million vs $333 million to $343 million previously.
Continue Reading -->Coffee With Greta: PCE Inflation Cools
Register now for next week’s free pro trader Q&A on LinkedIn with Scott Redler on Fed Day! DJIA Futures: +7 (+0.02%) SPX Futures: +16 (+0.4%) NASDAQ Futures: +112 (+0.8%) Good morning friends! Futures are rising after the release of the Fed’s preferred inflation gauge. Let’s get right to it! PCE Inflation In-Line With Expectations The Fed’s preferred inflation gauge was in-line with expectations in September. The Bureau of Economic Analysis’ personal consumption expenditures (PCE) price index rose 0.4% monthly and 3.4% year over year. The core PCE price index rose 0.3% monthly and 3.7% annually. That was the lowest reading for the core PCE since August 2021. Consumer spending rose sharply during the month, up 0.7% vs 0.5% expected. Personal incomes increased 0.3% vs 0.4% expected Amazon Rallies On Blowout Earnings Amazon (AMZN) shares are up 5% ahead of the open after solidly beating Q3 expectations on the top and bottom line. Here’s how the tech giant’s results compared to analysts’ estimates: EPS: $0.94 vs $0.58 expected Revenue: $143.1 billion vs $141.4 billion expected Amazon Web Services revenue: $23.1 billion vs $23.2 billion expected Advertising revenue: $12.1 billion vs $11.6 billion expected Revenue jumped 13% year over year while net income more than tripled. E-commerce sales rose 7% from a year ago, digital ad revenue soared 26%, and Amazon Web Services revenue jumped 12%. Amazon forecast Q4 sales will be between $160 billion and $167 billion vs $166.6 billion expected. The midpoint of that guidance implies 9.6% growth. Intel Jumps On Earnings Beat, Strong Guidance Intel (INTC) shares are rallying 7.2% in premarket trade after beating Q3 expectations and issuing strong revenue guidance. Here’s how the chipmaker’s results compared to analysts’ estimates: Adjusted EPS: $0.41 vs $0.22 expected Revenue: $14.16 billion vs $13.53 billion expected Revenue fell 8% year over year while the company’s gross margin of 45.8% was flat. On the conference call, the CEO said Intel would cut costs by about $3 billion this year. The CFO said operating expenses were down 15% year over year in Q3, which boosted earnings. Intel forecast Q4 adjusted EPS of $0.23 on $14.6 billion to $15.6 billion in revenue vs $0.32 EPS on $14.31 billion in revenue expected. Ford Drops On Earnings Miss Ford (F) shares are down 3.7% ahead of the open after missing Q3 expectations on the top and bottom line. Here’s how the automaker’s results compared to analysts’ estimates: Adjusted EPS: $0.39 vs $0.45 expected Revenue: $41.18 billion vs $41.22 billion expected The CFO blamed that miss on the UAW strikes which began on September 15, saying Ford was “poised” to reach its previous earnings guidance prior to the strikes. The company’s traditional business, Ford Blue, earned $1.72 billion in Q3, the Ford Pro commercial business earned $1.65 billion, and the Model e EV unit lost $1.33 billion. The CFO said Ford will delay about $12 billion in previously announced EV investments due to lower-than-expected demand for its electric vehicles. He also said the new UAW deal reached this week would add $850 to $900 in costs per vehicle assembled and Ford will work to “find productivity and efficiencies and cost reductions throughout the company”. The company did not issue guidance. In Case You Missed It Pending home sales rose unexpectedly in September. The National Association of Realtors reported the number of contracts signed to purchase a home rose 1.1% last month. That was better than expectations for a 1.5% decrease but still marked the second-lowest reading on record. Pending sales were down 11% year over year. These sales are expected to close in 30 to 60 days and serve as a leading indicator for existing home sales.
Continue Reading -->Coffee With Greta: Meta Drags Down Tech
DJIA Futures: -27 (-0.1%) SPX Futures: -16 (-0.4%) NASDAQ Futures: -86 (-0.6%) Good morning friends! Futures are sliding as Meta’s ad-revenue warning drags on tech stocks. Let’s get right to it! Meta Slips On Ad Revenue Warning Meta Platforms (META) shares are down 3.7% ahead of the open despite crushing Q3 expectations. Here’s how the social media giant’s results compared to analysts’ estimates: EPS: $4.39 vs $3.63 expected Revenue: $34.15 billion vs $33.56 billion expected Daily active users: 2.09 billion vs 2.07 billion expected Monthly active users: 3.05 billion, as expected Average revenue per user: $11.23 vs $11.05 expected Revenue jumped 23% year over year while net income surged 164%. But Meta widened its Q4 revenue guidance range because of unpredictability over the war in the Middle East. On the conference call, the CFO said, “We have observed softer ads in the beginning of the fourth quarter, correlating with the start of the conflict, which is captured in our Q4 revenue outlook.” Meta expects revenue of $36.5 billion to $40 billion in Q4, which would mark 19% growth at the midpoint of the range. Full-year expenses are expected to fall between $87 billion and $89 billion vs $88 billion to $91 billion previously estimated. IBM Jumps On Earnings Beat IBM (IBM) shares are rising 1.4% in premarket trade after beating Q3 expectations on the top and bottom line. Here’s how the tech company’s results compared to analysts’ estimates: Adjusted EPS: $2.20 vs $2.12 expected Revenue: $14.75 billion vs $14.73 billion expected Total revenue was up 4.6% year over year. Revenue in IBM’s software segment, which includes its AI platform, jumped 7.8% from a year ago. Consulting revenue rose 5.6% to $ 5 billion, slower than expectations for 8.7% growth. Infrastructure revenue fell 2.4% to $3.3 billion, better than estimates for a 7.5% decline. IBM generated $1.7 billion in free cash flow during the quarter and maintained its full-year forecast for free cash flow of about $10.5 billion. Southwest Falls After Earnings Southwest Airlines (LUV) shares are down 2.1% ahead of the open after reporting Q3 earnings in-line with expectations. Here’s how the airline’s results compared to analysts’ estimates: Adjusted EPS: $0.38, as expected Revenue: $6.53 billion vs $6.57 billion expected Revenue rose 4.9% year over year while net income dropped 30%. Southwest said it plans to slow its capacity growth in 2024 as it sees moderating travel demand. The airline plans to expand its flight schedules 10% to 12% year over year in Q1 2024, down from its previous forecast for as much as 16% growth. For the full year, Southwest is planning on 6% to 8% capacity growth. Ford, UAW Reach Tentative Deal Ford Motor (F) shares are rising 2.8% in premarket trade after reaching a tentative deal with the United Auto Workers Union. The automaker announced the deal to end a nearly six-week strike by the union on Wednesday night. It reportedly includes 25% pay increases over the terms of the agreement and will increase the top wage to more than $40 per hour. It also includes a 68% increase for starting wages to over $28 an hour. The agreement also reinstates cost-of-living adjustments, a three-year path to top wages, and right to strike over plant closures. The UAW president said in a video, ″We told Ford to pony up and they did. We won things nobody thought was possible.” The deal must be approved by local UAW leaders and ratified by a simple majority of Ford’s 57,000 union-represented workers. Those currently on strike from Ford will return to work while the approval process occurs. Q3 GDP Expands More Than Expected The U.S. economy grew more than expected in the third quarter. The Commerce Department reported GDP rose at a 4.9% annualized pace last quarter, up from 2.1% in Q2. That was better than expectations for 4.7% growth. Consumer spending jumped 4%, gross private domestic investment surged 8.4%, and government spending and investment rose 4.6%. Consumer spending on goods was up 4.8% while spending on services rose 3.6%. Weekly Jobless Claims Rise Slightly Weekly jobless claims rose slightly more than expected last week. The Labor Department reported 210,000 Americans filed initial claims for unemployment benefits. That was up by 10,000 from the previous week and higher than expectations for 207,000. Continuing claims rose by 63,000 to 1.79 million in the week ending October 14. That was the fifth straight weekly increase and the highest level since May. In Case You Missed It New home sales rose more than expected in September as buyers turn to builders amid a shortage of existing homes for sale. The Census Bureau reported new sales surged 12.3% to a seasonally adjusted annual rate of 759,000 units last month. That was better than expectations for 680,000 units and marked the highest level of new home sales since February 2022. New sales were up 33.9% year over year. The median sales price of a new home sold last month fell to $418,800 from $430,300 in August. The supply of new homes for sale fell 10.4% to a 6.9-month supply.
Continue Reading -->Coffee With Greta: Mixed Big Tech Results
DJIA Futures: +67 (+0.2%) SPX Futures: -15 (-0.4%) NASDAQ Futures: -88 (-0.6%) Good morning friends! Futures are mixed as traders digest earnings from Microsoft and Alphabet. Let’s get right to it! Microsoft Pops On Earnings Microsoft (MSFT) shares are up 4.5% ahead of the open after beating fiscal Q1 expectations on the top and bottom line. Here’s how the tech giant’s results compared to analysts’ estimates: EPS: $2.99 vs $2.65 expected Revenue: $56.52 billion vs $54.50 billion expected Revenue rose nearly 13% year over year while net income surged 27%. Revenue in Microsoft’s Intelligent Cloud segment rose 19% from a year ago to $24.26 billion. Azure revenue surged 29% vs 26% growth expected. The CFO called for fiscal Q2 revenue in the range of $60.4 billion to $61.4 billion vs analysts’ estimates of $60.9 billion. She also said Azure revenue growth is expected to come in at 26% to 27% next quarter and then remain stable through the second half of the fiscal year. Alphabet Misses On Cloud Revenue Alphabet (GOOGL) shares are dropping 5.9% in premarket trade despite beating Q3 expectations as cloud revenue disappointed. Here’s how the tech giant’s results compared to analysts’ estimates: EPS: $1.55 vs $1.45 expected Revenue: $76.69 billion vs $75.97 billion expected YouTube ad revenue: $7.95 billion vs $7.81 billion expected Google Cloud revenue: $8.41 billion vs $8.64 billion expected Total revenue rose 11% year over year, the first quarter of double digit growth in more than a year. Although cloud revenue was weaker than expected, the segment still grew 22% from a year ago. Alphabet has focused on the cloud unit as it tries to compete with Amazon Web Services and Microsoft Azure. The unit is also key to the growth of generative artificial intelligence. Snap Tops Expectations Snap (SNAP) shares are up 1.7% ahead of the open after beating Q3 expectations on the top and bottom line. Here’s how the social media company’s results compared to analysts’ estimates: Adjusted EPS: $0.02 vs $0.04 loss expected Revenue: $1.19 billion vs $1.11 billion expected Global Daily Active Users: 406 million vs 405.7 million expected Average revenue per user: $2.93 vs $2.74 expected Revenue was up 8% from a year ago, marking a return to sales growth for Snap. Although Snap did not provide official guidance, the company’s internal forecast called for Q4 sales between $1.32 billion and $1.38 billion vs $1.33 billion expected by analysts. The company cited “the unpredictable nature of war” for its decision not to provide official guidance. Snap said it has “observed pauses in spending from a large number of primarily brand-oriented advertising campaigns immediately following the onset of the war in the Middle East.” Boeing Jumps On Revenue Beat Boeing (BA) shares are rising 3.3% in premarket trade despite reporting a steeper Q3 loss than expected. Here’s how the planemaker’s results compared to analysts’ estimates: Adjusted loss per share: $3.26 vs $2.96 expected Revenue: $18.10 billion vs $18.01 billion expected Revenue rose 13% year over year as commercial aircraft sales jumped 25%. Boeing cut its 737 Max delivery forecast for the year as it works through production flaws. The company now expects to deliver between 275 and 400 of the planes down from its previous estimate of 400 to 450. Boeing maintained its forecast for 2023 free cash flow of $3 billion to $5 billion. The planemaker’s conference call with analysts begins at 10:30 a.m. ET. Adjustable-Rate Mortgage Demand Jumps Mortgage demand remained stalled at the slowest pace in 28 years last week. The Mortgage Bankers Association reported total application volume dropped 1% from the week before. Purchase applications fell 2% weekly and 22% year over year while refinance applications dropped 2% weekly and 8% annually. But the adjustable-rate share of total mortgages jumped to 9.5%, the highest level in nearly a year. The average 30-year fixed contract rate rose to 7.90% from 7.70%. But the average 5/1 ARM rate rose to 6.99% from 6.52%.
Continue Reading -->Coffee With Greta: Awaiting Big Tech Earnings
DJIA Futures: +158 (+0.5%) SPX Futures: +24 (+0.6%) NASDAQ Futures: +82 (+0.6%) Good morning friends! Futures are rising as traders assess the latest batch of Q3 earnings and wait for big tech results. Let’s get right to it! Coca-Cola Tops Q3 Expectations, Hikes Outlook Coca-Cola (KO) shares are up 3% ahead of the open after beating Q3 expectations on the top and bottom line. Here’s how the beverage giant’s results compared to analysts’ estimates: Adjusted EPS: $0.74 vs $0.69 expected Revenue: $11.91 billion vs $11.44 billion expected Net sales rose 8% year over year while organic revenue jumped 11%. Prices were 9% higher than a year ago but Coke said in July it is done hiking prices further. For the full-year, the company now expects comparable EPS growth of 7% to 8% vs 5% to 6% previously. Coke expects organic revenue growth of 10% to 11% vs 8% to 9% previously. General Motors Beats Q3 Estimates General Motors (GM) shares are rising 1.3% in premarket trade after beating Q3 expectations on the top and bottom line. Here’s how the automaker’s results compared to analysts’ estimates: Adjusted EPS: $2.28 vs $1.88 expected Revenue: $44.13 billion vs $43.68 billion expected Net income was down 7.3% from a year ago while revenue increased 5.4%. Adjusted earnings in North America fell 9.5% year over year while international adjusted EPS rose by 7%. GM pulled its full-year forecast amid uncertainty about the impact of the ongoing UAW strikes. The CFO also said the company was pulling its near-term targets for electric vehicles due to slower-than-expected demand. GM previously set goals to sell 400,000 EVs in North America from 2022 through mid-2024. 3M Jumps On Earnings Beat, Guidance Hike 3M (MMM) shares are rallying 4.6% ahead of the open after beating Q3 expectations and raising its guidance. Here’s how the consumer goods giant’s results compared to analysts’ estimates: Adjusted EPS: $2.68 vs $2.34 expected Revenue: $8.31 billion vs $7.99 billion expected The company raised its full-year outlook following the beat. 3M now expects adjusted EPS between $8.95 and $9.15 this year vs $8.60 to $9.10 previously. The company forecast adjusted total sales growth of -5% vs previous guidance for -5% to -1%. Spotify Jumps On Q3 Beat Spotify (SPOT) shares are jumping 5.1% in premarket trade after topping Q3 expectations on the top and bottom line. Here’s how the music streaming giant’s results compared to analysts’ estimates: Adjusted EPS: €0.33 vs €0.22 loss expected Revenue: €3.36 billion vs €3.33 billion expected This marked Spotify’s first quarterly profit in more than a year. The company also topped subscriber expectations. Spotify said it had 574 million monthly active users during the quarter and 226 million premium subscribers, both ahead of estimates. The company forecast Q4 operating profit of €37 million on revenue of €3.7 billion, with a gross margin of 26.6%. Spotify expects monthly active users to increase to 601 million this quarter and premium subscribers to climb to 235 million.
Continue Reading -->Coffee With Greta: Yields Surge
DJIA Futures: -133 (-0.4%) SPX Futures: -15 (-0.4%) NASDAQ Futures: -57 (-0.4%) Good morning friends! Futures are tumbling as the 10-year Treasury yield surges. Let’s get right to it! 10-Year Yield Pushes Back Above 5% The 10-year Treasury yield jumped above 5% again today. That yield is currently up 6 basis points at 4.98% after pushing back above 5% earlier this morning. The 2-year yield is flat at 5.11%. Yields have been hovering around the highest levels seen since 2007 as investors assess the Fed’s higher-for-longer interest rate plan. Many analysts believe the surge in yields has eliminated the need for the Fed to hike again before year-end. CME Group’s FedWatch Tool shows 98.4% of traders anticipating no rate hike at next week’s meeting. Traders Await Big Tech Earnings This will be an important week of earnings with most of the major mega-cap tech companies set to report results. Here are the highlights of this week’s scheduled companies: Tuesday AM: Coca-Cola (KO), General Electric (GE), 3M (MMM), General Motors (GM), Spotify (SPOT) Tuesday PM: Microsoft (MSFT), Alphabet (GOOGL), Snap (SNAP) Wednesday AM: Boeing (BA) Wednesday PM: Meta Platforms (META), IBM (IBM) Thursday AM: United Parcel Service (UPS), Southwest Airlines (LUV) Thursday PM: Amazon (AMZN), Intel (INTC), Chipotle Mexican Grill (CMG), Ford Motor (F) Friday AM: Chevron (CVX), Exxon Mobil (XOM) Chevron Agrees To Buy Hess Chevron (CVX) shares are down 2.4% ahead of the open after announcing it agreed to buy Hess (HES) for $53 billion. HES shares are flat, down 0.02%. The takeover will be an all-stock transaction and is the second proposed oil mega-merger this month. The total deal value is $60 billion, including debt. Hess shareholders will receive 1.025 CVX shares for every HES share they own. Textainer Surges On Private Takeover Deal Textainer (TGH) shares are rallying 42.8% in premarket trade after announcing a private takeover deal this morning. Investment firm Stonepeak offered the shipping container leasing company an all-cash deal at $50 per share. The $2.1 billion deal values Textainer at more than $7 billion, debt included. The transaction is expected to close in Q1 2024. Apple Slips Amid Supplier Investigation In China Apple (AAPL) shares are down 0.9% ahead of the open amid reports its biggest supplier, Foxconn, is under tax investigation in China. China’s state-run Global Times newspaper reported that Chinese authorities recently conducted inspections at Foxconn’s businesses in Guangdong and Jiangsu provinces. The natural-resources department reportedly conducted on-site investigations into the company’s land use in the Henan and Hubei provinces. Foxconn manufactures Apple products in three of those provinces. The probe comes after Foxconn’s founder announced in August that he would run for president in Taiwan. He resigned from the company’s board but still holds a 12.5% stake. He’s currently fourth in the polls for the January election.
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