All posts by Greta Wall
Coffee With Greta: Inflation Is Cooling
DJIA Futures: +81 (+0.2%) SPX Futures: +11 (+0.3%) NASDAQ Futures: +29 (+0.3%) Good morning friends! Futures are up as new data shows inflation continuing to cool. Let’s get right to it! CPI Cools In December U.S. inflation pressures declined as expected at the end of 2022. The Bureau of Labor Statistics’ consumer price index fell 0.1% monthly and was up 6.5% year over year. That was down from the 7.1% annual pace in November and the slowest in 14 months. The core CPI rose 0.3% monthly and 5.7% annually. That was also in line with expectations and down from 6% annually in November. The new data shows the Fed’s rate hikes are working to lower inflation. CME Group’s FedWatch Tool now shows 88.7% of traders expecting the central bank to pivot to a 0.25% hike on February 1. Weekly Jobless Claims Dip Weekly jobless claims fell unexpectedly at the start of the new year. The Labor Department reported 205,000 Americans filed initial unemployment claims last week. That was down by 1,000 from the previous week and lower than expectations for an increase to 210,000. Continuing claims also fell by 70,000 to 1.63 million in the week ending December 31. American Airlines Hikes Q4 Guidance American Airlines (AAL) shares are up 4.6% in premarket trade after hiking its Q4 guidance. The airline said this morning its expects to report adjusted Q4 EPS of $1.12 to $1.17 vs analysts’ estimate of $0.61. American also expects Q4 revenue growth of 16% to 17% vs its earlier estimate of 11% to 13% growth. The carrier is scheduled to report full Q4 results on January 26. The first major airline to report will be Delta Airlines (DAL) tomorrow morning. Disney Names New Chairman Disney (DIS) shares are up 2.1% ahead of the open after naming a new chairman late Wednesday. The company chose Nike’s (NKE) executive chairman Mark Parker to succeed current Chair Susan Arnold after the annual shareholders meeting. The board will be reduced to 11 members at that time. Disney also announced it is opposed to activist investor Nelson Peltz’s attempt to join the board. Alphabet To Cut Staff Of Health Sciences Unit Alphabet (GOOGL) shares are 0.2% higher in premarket trade after announcing layoffs in its health sciences unit, Verily. In an email to employees, Verily’s CEO said the unit is cutting 15% of its workforce. This is part of the unit’s restructuring efforts as it strives for financial independence from Alphabet. This is the first round of layoffs at the Google parent company amid the recent wave of industry-wide layoffs at other tech companies. In Case You Missed It Bed Bath & Beyond (BBBY) shares skyrocketed 68.6% on Wednesday while AMC (AMC) rallied 21.2%, and GameStop (GME) rose 7.2% in the latest meme stock surge. The BBBY rally was initially triggered after the company announced a new round of layoffs.
Continue Reading -->Coffee With Greta: Refinance Demand Surges
DJIA Futures: +91 (+0.3%) SPX Futures: +14 (+0.4%) NASDAQ Futures: +35 (+0.3%) Good morning friends! Futures are rising as traders look ahead to the next inflation report on Thursday. Let’s get right to it! Mortgage Refinance Demand Jumps As Rates Fall Mortgage refinance demand jumped last week as rates dropped at the beginning of the new year. The Mortgage Bankers Association reported refinance applications rose 5% weekly but volume was still down 86% year over year. That surge in refinance activity came as the average 30-year contract rate fell to 6.42% from 6.58%. But prchase applications fell 1% weekly and were 44% lower annually. It was the lowest total of purchase applications since 2014 as buyers struggle with high rates and falling supply. Airline Stocks Flat After FAA Outage Grounds U.S. Flights Shares of the major U.S. airlines are flat ahead of the open after the FAA temporarily halted all departing flights in the U.S. due to a system outage. The regulator’s Notice to Air Missions System, which is used to send messages to pilots, went down this morning. The FAA has just lifted the ground stop but the airlines are now working to catchup. More than 3,700 flights remain delayed according to flight tracking site FlightAware. The White House Press Secretary said in a tweet, “There is no evidence of a cyberattack at this point, but the President directed DOT to conduct a full investigation into the causes.” Southwest Airlines (LUV) shares are tumbling 2% in premarket trade after the president of the Southwest Airlines Pilots Association told CNBC the airline is preparing to cancel its flights today to avoid further disruption. Tesla Plans To Expand Texas Factory Tesla (TSLA) shares are up 2.5% ahead of the open after the company registered with the state of Texas to expand its EV factory in Austin. Filings with the Texas Department of Licensing and Registration show the electric automaker plans to spend $770 million on building new facilities at the factory. The company plans to use the new facilities for battery cell manufacturing and testing, cathode and drive unit manufacturing, and a die shop. Binance Plans 2023 Hiring Spree Crypto firm Binance is planning a hiring spree this year even as its competitors like Coinbase (COIN) conduct mass layoffs. Speaking at the Crypto Finance Conference in Switzerland, CEO Changpeng Zhao said the company plans to increase its staff by 15% to 30% this year. In 2022, Binance increased its headcount from 3,000 employees to nearly 8,000. Zhao said the hiring spree is an effort to get the company “well organized” before the next crypto bull market. “We will continue to build and hopefully we will ramp up again before the next bull market,” he said. In Case You Missed It Bed Bath & Beyond (BBBY) shares surged 27.8% on Tuesday after the company started its latest round of layoffs that were previously announced in August. In an email to employees, the CEO said the retailer is cutting jobs “across our corporate, supply chain and store portfolio.” She also announced the company is eliminating its chief transformation officer role. The stock is up another 26.1% ahead of the open.
Continue Reading -->Coffee With Greta: Powell In Focus
DJIA Futures: -146 (-0.4%) SPX Futures: -18 (-0.5%) NASDAQ Futures: -77 (-0.7%) Good morning friends! Futures are down as traders wait to hear what Fed Chair Jerome Powell will say in Sweden. Let’s get right to it! All Eyes On Powell Fed Chair Jerome Powell is speaking at a Central Bank event in Sweden this morning. Wall Street is closely watching that speech for any comments on his views about inflation and the Fed’s plans in 2023. The Central Bank does not hold its first meeting until January 31 – February 1. CME Group’s FedWatch Tool shows 77.1% of traders expect the FOMC to pivot to a smaller 0.25% rate hike at that meeting. Bed Bath & Beyond Reports Steep Fiscal Q3 Loss Bed Bath & Beyond (BBBY) shares are up 4.3% ahead of the open despite reporting a steeper fiscal Q3 loss than expected. Here’s how the retailer’s results compared to analysts’ expectations: Adjusted loss per share: $3.65 vs $2.23 expected Revenue: $1.26 billion vs $1.34 billion expected The $393 million loss was even worse than Bed Bath’s projection for a $385.8 million loss last week and 42% larger than a year ago. Comparable sales tumbled 32% year over year. Those losses included a $100 million impairment charge related to “certain store-level assets”. The CEO said they have aggressively cut costs and are on track to close the 150 stores that were previously announced. Those efforts have reduced operating expenses to $583.6 million from $698 million a year ago. Albertsons Tops Fiscal Q3 Expectations Albertsons (ACI) shares are up 0.6% in premarket trade after beating fiscal Q3 expectations. Here’s how the grocery store chain’s results compared to analysts’ expectations: Adjusted EPS: $0.87 vs $0.66 expected Revenue: $18.2 billion vs $17.8 billion expected Sales rose by $1.5 billion year over year. More Layoffs At Coinbase Coinbase (COIN) shares are falling 2.0% ahead of the open after announcing another round of mass layoffs. The crypto exchange reportedly plans to cut another 950 jobs, representing about 20% of its workforce. This is on top of the layoffs in June which impacted about 18% of the company’s workforce. CEO Brian Armstrong told CNBC, “With perfect hindsight, looking back, we should have done more. The best you can do is react quickly once information becomes available, and that’s what we’re doing in this case.” The layoffs and other restructuring measures are expected to reduce Coinbase’s operating expenses by 25% this quarter. Oak Street Health Surges On Reported CVS Takeover Oak Street Health (OSH) shares are surging 32.2% in premarket trade following a Bloomberg report that CVS (CVS) is exploring options to buy the company. CVS is reportedly in negotiations to buy the clinic chain for more than $10 billion. Oak Street has more than 160 healthcare centers across 21 states. In Case You Missed It Consumers’ short-term inflation expectations improved in December. The New York Fed released its latest Survey of Consumer Expectations on Monday. That showed Americans expect inflation to still be at 5% 1 year from now, down from 5.2% in November. But longer-term expectations rose. Respondents to the survey said they see inflation at 2.4% 5 years from now, up from 2.3% in November.
Continue Reading -->Coffee With Greta: Inflation Week
DJIA Futures: +117 (+0.4%) SPX Futures: +20 (+0.5%) NASDAQ Futures: +74 (+0.7%) Good morning friends! Futures are rising as a new week of trade begins and traders look ahead to key inflation data. Let’s get right to it! Inflation In Focus Inflation is on the brain as traders will get the final CPI reading for 2022 later this week. The key data coming out today is also focused on inflation. The New York Fed releases its December survey of consumer expectations at 11:00 a.m. ET. The market will be focused on the 1-year and 5-year inflation expectations in that report. On Tuesday, Fed Chair Jerome Powell is set to speak in Sweden at 9:00 a.m. ET. The Bureau of Economic Analysis releases the December CPI and core CPI at 8:30 a.m. ET on Thursday. And the week will round out on Friday with the University of Michigan’s January consumer sentiment index and inflation expectations. The December jobs report showed wage-side inflation pressures easing up. That caused a big rally on Wall Street with traders anticipating the Fed may pause rate hikes earlier than previously planned. Duck Creek Technologies Skyrockets Duck Creek Technologies (DCT) shares are surging 45.3% ahead of the open after reaching a takeover deal with private firm Vista Equity Partners. Vista will pay $19 per share in cash for Duck Creek, valuing the insurance tech firm at about $2.6 billion. Trading has been halted on the stock at $18.87 per share. The deal is a 68% premium to Friday’s closing price of $11.28 per share. Lululemon Slides After Revising Q4 Guidance Lululemon (LULU) shares are sliding 10.2% in premarket trade after the company revised its Q4 guidance. The athleisure apparel retailer now expects gross margins in Q4 to decline by 90 to 110 basis points. That’s down from previous expectations for margins to improve by 10 to 20 basis points. But the company raised its Q4 net revenue guidance to a range of $2.66 billion to $2.70 billion vs $2.61 billion to $2.66 billion previously. Energy Stocks Gain As Oil Prices Rise Oil prices are higher this morning on demand optimism in China. West Texas Intermediate crude futures are up 3.3% to over $76 bbl while Brent crude futures are up 3% to just under $81 bbl. China reopened its borders over the weekend as part of its continued efforts to ease Covid restrictions. About 2 billion domestic trips for the Lunar New Year season are expected this year, nearly double last year. The Energy Select Sector SPDR ETF (XLE) is up 1.7% ahead of the open. Bed Bath & Beyond Rebounds Bed Bath & Beyond (BBBY) shares are jumping 16.8% in premarket trade as the company looks to bounce back from last week’s major drop. The threat of bankruptcy is looming overhead as the struggling home goods retailer prepares to report earnings Tuesday morning. Bed Bath & Beyond warned last week it expects to report lower sales than analysts are anticipating. The company also said it has “substantial doubt” about its “ability to continue as a going concern.”
Continue Reading -->Coffee With Greta: Wage Gains Ease Up
DJIA Futures: +289 (+0.9%) SPX Futures: +35 (+0.9%) NASDAQ Futures: +91 (+0.8%) Good morning friends! Futures are rising as traders shake off a hotter-than-expected jobs report and focus on the lighter wage gains. Let’s get right to it! Job Growth Runs Hot, Wage Gains Cool The U.S. economy added more jobs than expected in December with the unemployment rate falling unexpectedly. The Labor Department reported employers added 223,000 workers last month vs economists’ expectations for 200,000. The unemployment rate fell to 3.5% from 3.7% vs economists’ expectations for that to be unchanged. But average hourly earnings rose less than expected, up 0.3% monthly and 4.6% year over year. Economists were estimating wages would gain 0.4% monthly and 5% annually. The sectors with the largest job gains were leisure and hospitality at 67,000, healthcare at 55,000, construction at 28,000, and social assistance at 20,000. WWE Rallies As McMahon Returns World Wrestling Entertainment (WWE) shares are rallying 10.4% ahead of the open after Vince McMahon announced his return to the company on Thursday. McMahon said he elected himself executive chairman on Thursday and also brought on two former WWE co-presidents and board members. His return comes after he previously retired from the company over a sexual misconduct scandal. But he said his return is necessary as WWE prepares for media rights negotiations. In a statement, McMahon said, “The only way for WWE to fully capitalize on this opportunity is for me to return as Executive Chairman and support the management team in the negotiations for our media rights and to combine that with a review of strategic alternatives. My return will allow WWE, as well as any transaction counterparties, to engage in these processes knowing they will have the support of the controlling shareholder.” Bed Bath & Beyond Still Collapsing Bed Bath & Beyond (BBBY) shares are plunging 13.6% in premarket trade, extending the 29.9% drop from Thursday. The plunge comes after the company warned it is low on cash and considering filing for bankruptcy. The Wall Street Journal later reported Bed Bath & Beyond is in the “early stages” of readying a bankruptcy filing. But a spokeswoman for the company said, “no determinations have been made as of this time” as the company works with advisers to secure financing. Tesla Cuts Prices In China Tesla (TSLA) shares are falling 6.3% ahead of the open after the electric automaker cut its prices in China. The Model 3 in China will now be priced at 229,900 yuan ($33,541) while the Model Y will cost 259,900 yuan ($37,887). This is the second time in less than three months that Tesla has cut car prices in China. According to a Reuters calculation, the latest cut amounts to a 13% to 24% reduction in prices from September. A Tesla executive said the cuts were meant to boost demand. She said the moves “respond to the government’s call with practical actions to promote economic development and encourage consumption. The China Passenger Car Association also reported on Thursday that Tesla’s sales of China-made cars fell to 55,796 vehicles in December. That was the lowest level in five months. In Case You Missed It Stitch Fix (SFIX) shares rallied 9.4% Thursday after announcing layoff plans. Founder Katrina Lake told employees the company will cut 20% of its salaried workforce and reassumed her role as CEO. Lake said, “I will be stepping in as interim CEO and leading the search process for our next CEO. Despite the challenging moment we are in right now, the board and I still deeply believe in the Stitch Fix business, mission and vision.”
Continue Reading -->Coffee With Greta: Strong Private Job Growth Spooks Traders
DJIA Futures: -165 (-0.5%) SPX Futures: -22 (-0.6%) NASDAQ Futures: -72 (-0.6%) Good morning friends! Futures are falling after the release of strong labor market data. Let’s get right to it! Private Payrolls Surge In December Private sector job growth blew past expectations in December. Payroll firm ADP reported private employers added 235,000 employees last month. That was sharply higher than 153,000 expected and up from 127,000 in November. The services sector led those gains, adding 213,000 workers. Leisure and hospitality added 123,000, professional and business services grew by 52,000, and education and health services added 42,000. Wages also continued strong gains with annual pay across all categories up 7.3% year over year. This data comes ahead of the official December jobs report from the Labor Department on Friday. That’s expected to show the U.S. economy added 200,000 jobs last month with the unemployment rate unchanged at 3.7%. Weekly Jobless Claims Drop Weekly jobless claims fell to a 14-week low at the end of 2022. The Labor Department reported 204,000 Americans filed initial claims for unemployment benefits last week. That was down by 19,000 from the week before and better than 223,000 expected. Continuing claims also dipped by 30,000 to 1.69 million in the week ending December 24. Trade Deficit Tumbles In November The U.S. trade deficit narrowed more than expected in November. The Commerce Department reported that gap tumbled 21% to $61.5 billion. That was down from $77.8 billion in October and better than $63.1 billion expected. Bed Bath & Beyond Sinks After Warning Bed Bath & Beyond (BBBY) shares are plummeting 18.7% ahead of the open after the company warned about slower than expected sales. The home goods retailer said it now expects fiscal Q3 sales of $1.26 billion vs analysts’ expectations for $1.41 billion. That’s down from $1.88 billion in the same quarter one year ago. Bed Bath & Beyond also expects to report a $385.8 million net loss in the quarter, up from $276.4 million a year ago. The company also issued a “going concern” which is a warning that it likely will not have the cash to cover expenses in the upcoming months. BBBY is set to report full quarterly results on Tuesday. Silvergate Capital Tanks Silvergate Capital (SI) shares are tanking 35.5% in premarket trade after the crypto bank released preliminary Q4 results. That report showed total crypto deposits plunged 68% at the end of Q4 to $3.8 billion vs $11.9 billion at the end of Q3. The massive withdrawals came as crypto exchange FTX, which was a Silvergate customer, collapsed. The bank also said $150 million of its deposits at the end of December were held by customers who had filed for bankruptcy. Silvergate said it sold $5.2 billion of debt securities to raise cash. That put its total cash and cash equivalents held at the end of December at $4.6 billion. The CEO said, “In response to the rapid changes in the digital asset industry during the fourth quarter, we took commensurate steps to ensure that we were maintaining cash liquidity in order to satisfy potential deposit outflows, and we currently maintain a cash position in excess of our digital asset related deposits.” The bank also announced it’s laying off 200 employees, representing about 40% of its workforce. Walgreens Tops Fiscal Q1 Expectations, Hikes Outlook Walgreens (WBA) shares are falling 4.8% ahead of the open despite beating fiscal Q1 expectations. Here’s how the drugstore chain’s results compared to analysts’ expectations: Adjusted EPS: $1.16 vs $1.14 expected Revenue: $33.38 billion vs $32.84 billion expected But Walgreens reported an unadjusted loss of $3.7 billion, or $4.31 per share, driven by a $5.2 billion settlement for opioid-related litigation. An early cold and flu season drove strong sales in the quarter as demand surged for over-the-counter medications. Walgreens hiked its full-year sales guidance to $137.5 billion from $133.5 billion previously. The company maintained its full-year EPS guidance of $4.45 to $4.65 vs analysts’ estimates of $4.50. GM Reclaims America’s Top Automaker Title General Motors (GM) shares are slipping 0.8% in premarket trade after the company reclaimed the title of America’s top automaker from Toyota in 2022. GM reported its total 2022 sales in the U.S. on Wednesday. The automaker said it sold 2.27 million vehicles in the U.S. last year, up 2.5% year over year. That topped Toyota’s U.S. sales of 2.1 million vehicles in 2022. GM sold 623,261 vehicles in the fourth quarter, up 41.4% year over year. The automaker’s EV sales also surged in Q4, with the company selling 16,108 vehicles vs just 25 a year ago. In Case You Missed It The minutes of the Fed’s December 2022 meeting showed officials are committed to lowering inflation and expect higher interest rates to remain in place for “some time”. The meeting summary said, “Participants generally observed that a restrictive policy stance would need to be maintained until the incoming data provided confidence that inflation was on a sustained downward path to 2 percent, which was likely to take some time.” The Fed’s latest dot plot showed no interest rate cuts beginning until 2024. The number of job openings in the U.S. was relatively unchanged in November, a sign the labor market is maintaining strength in the face of the Fed’s rate hikes. The Labor Department’s Job Openings and Labor Turnover Survey showed there were 10.46 million unfilled jobs in November, down just slightly from the upwardly revised 10.51 million in October. The number of job openings outnumbered unemployed workers by 1.7 to 1. That’s well above pre-pandemic levels of 1.2 to 1. Apple (AAPL) reclaimed its $2 trillion market cap on Wednesday. The iPhone maker’s stock closed 1.03% higher at $126.36 per share. That put its valuation at $2.088 trillion. The company’s market cap slipped under that key level Tuesday for the first time since May 2021.
Continue Reading -->Coffee With Greta: Can Apple Reclaim $2 Trillion?
DJIA Futures: +141 (+0.4%) SPX Futures: +23 (+0.6%) NASDAQ Futures: +90 (+0.8%) Good morning friends! Futures are higher as traders try to shake off Tuesday’s down start to the year and look ahead to key economic data. Let’s get right to it! Apple Market Cap Drops Below $2 Trillion Apple (AAPL) shares are up 1.1% ahead of the open, rebounding from Tuesday’s decline that pushed the tech giant’s market cap below $2 trillion. It was the first time since May that the iPhone maker’s valuation slipped below that key level. AAPL shares closed 3.7% lower Tuesday at $125.07, a new 52-week low and putting the company’s market cap at $1.99 trillion. The stock has fallen sharply from its brief jump above a $3 trillion market cap in January 2022. Apple’s share price fell nearly 27% in 2022. Salesforce To Cut 10% Of Its Workforce Salesforce (CRM) shares are up 4.7% in premarket trade after announcing a restructuring plan. The tech company said today it will lay off about 10% of its employees and close some offices. Those moves are expected to lead to between $1.4 billion and $2.1 billion in charges. $800 million to $1 billion of that will be record in fiscal Q4 2023. Co-CEO Marc Benioff said in a letter to employees, “The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions.” Laid-off employees in the U.S. will receive five months pay, health insurance, and other benefits as part of their severance package. GE Healthcare Spinoff Starts Trading Today General Electric (GE) shares are up 0.3% ahead of the open as the company’s healthcare spinoff is set to begin trading as a separate company today. GE Healthcare Technologies will trade on the S&P 500 under the ticker symbol GEHC. This is part of GE’s plans it revealed in 2021 to break up into three separate companies so it can focus on its aviation business. The company plans to spinoff its energy segment in 2024. Ford Reigns As America’s Bestselling Truck Ford (F) are up 0.9% in premarket trade, extending Tuesday’s gains. The automaker reported sales of its F-Series pickups surpassed 640,000 trucks in 2022. That made the F-Series America’s bestselling truck for the 46th straight year and the bestselling vehicle overall for 41 years. The 2022 sales were down from 726,004 F-Series trucks sold in 2021. Ford is set to report its total year-end sales for 2022 on Thursday. Mortgage Demand Plunges At End of 2022 Mortgage demand plunged at the end of 2022 as rates pushed higher and seasonal slowness weighed on the market. The Mortgage Bankers Association reported total application volume dropped 13.2% last week compared to 2 weeks earlier. MBA was closed the prior week due to the holiday. Purchase applications dropped 12.2% on a weekly basis and were down 42% year over year. Refinance applications tumbled 16.3% weekly and 87% annually. The average 30-year fixed contract rate rose to 6.58% from 6.34%. That’s up sharply from 3.33% at the end of 2021. JOLTS Preview The Labor Department releases the first piece of key jobs data later this morning. The November Job Openings and Labor Turnover Survey (JOLTS) will be out at 10:00 a.m. ET. That survey is expected to show there were 10.1 million job openings in November, down from 10.3 million in October. Although openings are still outnumbering job seekers, that gap has shrunk as the labor market tightened at the end of 2022. In Case You Missed It The contraction in the U.S. manufacturing sector deepened in December. The S&P Global Manufacturing PMI fell to 46.2 from 47.7 in November. That was the lowest reading since May 2020 and the second straight month of contraction. Tesla (TSLA) shares plunged 12.2% on Tuesday after the electric automaker reported weaker-than-expected Q4 deliveries and production. The drop came as some analysts took that miss as a warning sign for Tesla’s future. The company still reported record 40% growth in deliveries year over year. TSLA shares are up 1.1% ahead of the open.
Continue Reading -->Coffee With Greta: New Year Begins For Traders
DJIA Futures: +144 (+0.4%) SPX Futures: +22 (+0.6%) NASDAQ Futures: +93 (+0.8%) Good morning friends! Futures are higher as traders gear up for the start of a new year on Wall Street. Let’s get right to it! Tesla Q4 Deliveries Fall Short Tesla (TSLA) shares are falling 4.4% ahead of the open after reporting lower-than-expected Q4 deliveries. The electric automaker delivered 405,278 vehicles in the fourth quarter and producer 439,701. That brings Tesla’s total annual deliveries in 2022 to 1.31 million with total production at 1.37 million vehicles. The annual numbers are a new record for the company and up 40% year over year. But analysts were expecting Tesla to deliver around 427,000 vehicles in Q4. Gold Surges To 6-Month High Gold prices surged to a 6-month high early this morning as the recent rally continues. Spot gold peaked at just below $1,850 per troy ounce on the London Metal Exchange. U.S. gold futures are currently up 0.9% to $1,843. Gold prices have been rising since the beginning of November. Oil Prices Begin 2023 Lower Oil prices are falling this morning amid weak demand in China and global economic concerns. West Texas Intermediate crude futures are down 1.1% to under $79.50 bbl while Brent crude futures are down 1% to $85 bbl. The latest data from China shows factory activity shrank in December as Covid cases surged in the country after authorities relaxed restrictions. The IMF’s Managing Director also said over the weekend the the U.S., Europe, and China were all slowing simultaneously. She said that will make 2023 tougher than 2022 for the global economy. Treasury Yields Slip U.S. Treasury yields are falling this morning as uncertainty about 2023 lingers over the market. The 2-year yield is down 5 basis point to 4.38% while the 10-year yield is down 13 basis points to 3.75%. Investors are looking ahead to key data ahead this week for clues about the state of the economy. Busy Week Of Jobs Data It will be a big week of economic data, mostly focused on the labor market. On Wednesday, the Labor Department releases its November Job Openings and Labor Turnover Survey (JOLTS) and the Fed will release the minutes of its last meeting. ADP then reports private employment numbers for December on Thursday while the Labor Department reports weekly jobless claims. Then on Friday is the official December jobs report from the Labor Department. This data is key for the market to gauge its expectations for Fed policy as the bank has said a slowdown in the labor market is needed in order to get inflation under control. In Case You Missed It 2022 was Wall Street’s worst year since 2008. The Dow Jones ended the year 8.8% lower, while the S&P 500 dropped 19.4%, and the Nasdaq sank 33.1%. But the Dow and S&P 500 did post gains in the 4th quarter, breaking a three quarter losing streak. The Dow rose 15.4% in Q4 while the S&P 500 was up 7.1%. The Nasdaq still slipped 1.0% last quarter. Many analysts expect the bear market to persist into 2023 until a recession hits.
Continue Reading -->Coffee With Greta: Year-End For Traders
DJIA Futures: -149 (-0.5%) SPX Futures: -26 (-0.7%) NASDAQ Futures: -117 (-1.1%) Good morning friends! Futures are lower as traders gear up for the final trading day of 2022. Let’s get right to it! The End of 2022 Today is the final trading day of 2022 with no Santa Rally lifting the market as the year comes to a close. This will be the worst year for stocks since 2008 and the major indexes are all on track to snap a two-month win streak in December. Year-to-date, the Dow Jones is down 8.6%, while the S&P 500 has lost 19.2%, and the Nasdaq has tumbled 33%. But the 4th quarter as a whole has actually been positive for Wall Street. The Dow is on track for a 15.7% quarterly gain, its best since Q2 2020. The S&P is also up 7.4% this quarter. But the Nasdaq has slipped 0.9%, on track for its fourth straight negative quarter for the first time since 2001. Most analysts expect the bear market to extend into the new year as the Fed continues to tighten and a recession is expected in the first half of the year. Oil Prices Slip, On Track For Annual Gain Oil prices are falling this morning but on track to close higher in 2022 for the second straight year. West Texas Intermediate crude futures are down 0.3% to $78 bbl while Brent crude futures are down 0.2% to $83 bbl. Although both contracts have fallen sharply from this year’s earlier peak they’re still on track for annual gains. Brent looks set to gain more than 7% in 2022 after a 50% jump in 2021. WTI is on track to rise 4.1% this year vs 55% last year. Bond Markets Close Early Today U.S. Treasury yields are mixed on the final trading day of the year as uncertainty remains about Fed policy and an impending recession. The 2-year yield is up 5 basis points to 4.41% while the 10-year yield is down 1 basis point to 3.87%. CME Group’s FedWatch Tool shows 69.7% of traders expecting the Fed to continue slowing rate hikes with a 25 basis point move at their first meeting in 2023. The bond markets close early at 2:00 p.m. ET today and will be closed Monday alongside the equities market in observance of New Year’s Day. Southwest Expects Normal Operations Today Southwest Airlines (LUV) shares are slipping 0.8% ahead of the open after rallying on Thursday after saying it expected to return to normal operations today. The airline has only canceled 39 flights scheduled for today, down from more than 2,300 on Thursday. In a staff memo Thursday, the CEO said, “We have all hands on deck and tested solutions in place to support the restored operation. I’m confident, but I’m also cautious.” Executives also warned on a call with reporters that the holiday meltdown “will certainly be an impact to the fourth quarter”. Southwest has promised to reimburse customers for expenses they incurred due to the cancellations including hotels, food, or other travel accommodations.
Continue Reading -->Coffee With Greta: No Santa In Sight For Wall Street
DJIA Futures: +167 (+0.5%) SPX Futures: +29 (+0.8%) NASDAQ Futures: +116 (+1.1%) Good morning friends! Futures are higher as stocks rebound but traders’ hopes for a Santa rally fizzle out. Let’s get right to it! Unemployment Claims Jump Weekly jobless claims rose more than expected last week. The Labor Department reported 225,000 Americans filed initial claims for unemployment benefits. That was up by 9,000 from the previous week and higher than economists’ expectations for 223,000. Continuing claims also rose by 41,000 to 1.71 million in the week ending December 17. That’s the highest level since February and a sign that it’s taking more time for laid off workers to find new jobs. Tesla Rebounds Tesla (TSLA) shares are rising 5.2% ahead of the open, extending the rebound that started Wednesday afternoon. Wednesday was the first positive close for the stock in eight sessions. But TSLA is still on track for its worst year ever. CNBC obtained an email that CEO Elon Musk sent to employees on Wednesday telling them not to be “too bothered by stock market craziness.” He said Tesla needs to “demonstrate continued excellent performance,” and “long-term, I believe very much that Tesla will be the most valuable company on Earth!” Apple Bounces Back Apple (AAPL) shares are up 1.5% in premarket trade after the stock closed at a new 1.5 year low on Wednesday. Year-to-date, AAPL is down 29% as the tech sector has been hit hard in the 2022 bear market. So far in December, the iPhone maker’s stock is down nearly 15%. Oil Prices Fall As Covid Cases Spike In China Oil prices are rising this morning as surging Covid cases in China dampen hopes for higher demand. West Texas Intermediate crude futures are down 0.9% to $78 bbl while Brent crude futures are down 0.9% to $82.50 bbl. As China has relaxed its Covid restrictions, the country has seen a surge in cases. The latest outbreak has prompted five countries including the U.S. to enact a testing requirement for travelers from China. In Case You Missed It Pending home sales fell more than expected in November. The National Association of Realtors reported pending sales dropped 4% last month vs expectations for a 1.8% decline. That was the sixth straight monthly drop and the lowest level of contract signings since April 2020. Pending sales were down a sharp 37.8% compared to November 2021.
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