All posts by Greta Wall
Coffee With Greta: Inflation Is Still Hot
DJIA Futures: +69 (+0.2%) SPX Futures: -11 (-0.3%) NASDAQ Futures: -90 (-0.8%) Good morning friends! Futures are mixed as traders digest new inflation data and Amazon’s (AMZN) big Q3 miss puts more pressure on tech stocks. Let’s get right to it! PCE Inflation Is Still Hot U.S. inflation pressures were still running hot in September as the Fed’s rate hikes show no signs of slowing price gains. The Bureau of Economic Analysis’ personal consumption expenditures (PCE) price index rose 0.3% monthly and 5.1% year over year. But it’s not just high gas prices fueling those gains anymore. The core PCE price index – which excludes food and energy prices – rose 0.5% monthly and 5.1% annually. That was up from the 4.9% annual gain in August and that index is the Fed’s preferred measure of inflation. Musk Cleans House at Twitter Twitter (TWTR) shares are up 0.3% in premarket trade after Tesla (TSLA) CEO Elon Musk closed his purchase of the company. Musk reportedly took over at the social media giant Thursday night and quickly fired top executives. CEO Parag Agrawal, CFO Ned Segal, and head of legal policy Vijaya Gadde were all reportedly fired upon the deal closing. Musk named himself CEO after making those moves. He sent out a tweet after the deal closed, saying “the bird is freed”. Amazon Craters on Revenue Miss, Disappointing Guidance Amazon (AMZN) shares are plunging 13.8% ahead of the open after missing Q3 revenue expectations and issuing disappointing Q4 guidance. Here’s how the tech giant’s results compared to analysts’ expectations: EPS: $0.28 Revenue: $127.10 billion vs $127.46 billion expected Amazon Web Services Revenue: $20.5 billion vs $21.1 billion expected Ad Revenue: $9.55 billion vs $9.48 billion expected Amazon expects Q4 revenue between $140 billion and $148 billion vs $155.15 expected. That’s a disappointing outlook for the company’s key holiday shopping quarter. Apple Tops Fiscal Q4 Expectations, iPhone Sales Fall Short Apple (AAPL) shares are up 0.3% in premarket trade after narrowly beating fiscal Q4 expectations. Here’s how the iPhone maker’s results compared to analysts’ expectations: EPS: $1.29 vs. $1.27 expected Revenue: $90.15 billion vs. $88.90 billion expected iPhone revenue: $42.63 billion vs. $43.21 billion expected Mac revenue: $11.51 billion vs. $9.36 billion expected iPad revenue: $7.17 billion vs. $7.94 billion expected Other Products revenue: $9.65 billion vs. $9.17 billion expected Services revenue: $19.19 billion vs. $20.10 billion expected Gross margin: 42.3% vs. 42.1% expected Apple did not provide official guidance for fiscal Q1, which is the company’s biggest sales season of the year. But the CFO said the company expects slower annual revenue growth with Mac sales expected to decline year over year. Intel Beats Q3 Expectations Intel (INTC) shares are rallying 6.7% ahead of the open after beating Q3 expectations on the top and bottom line. Here’s how the chipmaker’s results compared to analysts’ estimates: Adjusted EPS: $0.59 vs $0.32 expected Revenue: $15.34 billion vs $15.25 billion expected Revenue declined 15% year over year, improving from the 22% decline in Q2. Intel trimmed its full-year forecast, now expecting adjusted EPS of $1.95 and $63 billion to $64 billion in revenue. That’s down from the prior forecast for $2.30 in adjusted EPS and $65 billion to $68 billion in revenue. Analysts were expecting guidance for $2.15 in adjusted EPS and $65.26 billion in sales. Intel’s CEO said, “We are planning for the economic uncertainty to persist into 2023.” Amid that uncertainty, the company said it’s aiming to reduce its cost of sales and operating expenses by $3 billion in 2023. Those annual savings are expected to reach $8 billion to $10 billion by the end of 2025. Pinterest Soars On Earnings Beat Pinterest (PINS) shares are jumping 9.1% in premarket trade after beating Q3 estimates. Here’s how the social media company’s results compared to analysts’ expectations: Adjusted EPS: $0.11 vs $0.06 expected Revenue: $684.6 million vs $666.7 million expected Revenue was up 8% year over year while monthly average users remained flat. Pinterest expects Q4 revenue growth in the mid-single digits as it continues to face foreign exchange headwinds. Exxon Mobil Reports Record Profits Exxon Mobil (XOM) shares are up 2.1% ahead of the open after reporting record profits in Q3. Here’s how the oil giant’s results compared to analysts’ expectations: EPS: $4.45 vs $3.86 expected Revenue: $112 billion vs $105 billion expected Exxon’s $18.7 billion profit was a new company record. It’s the second quarter in a row of record earnings which has caused criticism from Democrats as Americans pay high gas prices at the pump. Chevron Reports Near Record Profits Chevron (CVX) shares are up 2.1% in premarket trade after reporting its second-highest quarterly profit ever in Q3. Here’s how the oil company’s results compared to analysts’ estimates: Adjusted EPS: $5.56 vs $4.89 expected Revenue: $66.6 billion vs $57.4 billion expected Profits were up 90% year over year to $10.8 billion, down slightly from $11.4 billion in Q2. Chevron said higher oil and natural gas prices contributed to that surge.
Continue Reading -->Coffee With Greta: META’s Mega Miss
DJIA Futures: +274 (+0.9%) SPX Futures: +6 (+0.2%) NASDAQ Futures: -36 (-0.3%) Good morning friends! Futures are mixed as disappointing tech earnings weigh on the Nasdaq and a higher-than-expected GDP reading boosts the DJIA. Let’s get right to it! Meta Plummets After Earnings Miss Meta (META) shares are plummeting 22.9% ahead of the open after missing Q3 profit expectations and issuing weak guidance. Here’s how the social media giant’s results compared to analysts’ expectations: EPS: $1.64 vs $1.89 expected Revenue: $27.71 billion vs $27.38 billion expected Daily Active Users: 1.98 billion, in line with expectations Monthly Active Users: 2.96 billion vs 2.94 billion expected Average Revenue per User: $9.41 vs $9.83 expected Revenue dropped 4%, the second straight quarter of revenue declines as Meta struggles with a broad slowdown in online ad spending. Costs and expenses jumped 19% compared to a year ago. The company forecast Q4 revenue will be between $30 billion and $32.5 billion vs analysts’ expectations for $32.2 billion. Revenue in Meta’s virtual reality division, Reality Labs, fell to $285 million with its loss widening to $3.67 billion from $2.63 billion a year earlier. Ford Weighed Down by Supply Chain Issues Ford (F) shares are down 2% in premarket trade despite narrowly beating Q3 expectations. Here’s how the automaker’s results compared to analysts’ estimates: Adjusted EPS: $0.30 vs $0.27 expected Revenue: $37.2 billion vs $36.25 billion expected Ford recorded a net loss of $827 million due to continued supply chain issues and costs related to disbanding its autonomous vehicle unit. Adjusted profits were down 40% year over year. Ford updated its full-year guidance, expecting adjusted earnings before interest and taxes of about $11.5 billion vs $11.5 billion to $12.5 billion previously. The company raised its full-year adjusted cash flow forecast to between $9.5 billion and $10 billion vs $5.5 billion to $6.5 billion previously. Higher Prices Boost McDonald’s Profits McDonald’s (MCD) shares are up 2.1% ahead of the open after beating Q3 expectations. Here’s how the fast food giant’s results compared to analysts’ expectations: EPS: $2.68 vs $2.58 expected Revenue: $5.87 billion vs $5.69 billion expected McDonald’s did not see a slowdown in traffic even as it raised its menu prices to mitigate higher costs. Global same-store sales jumped 9.5%, crushing estimates of 5.8% growth. Same-store sales in the U.S. rose 6.1%. U.S. Economy Expands More than Expected The U.S. economy expanded more than expected in Q3 as the shrinking trade deficit boosted GDP. The Bureau of Economic Analysis’ first estimate of Q3 GDP shows 2.6% annualized growth vs 2.3% expected. That’s the first positive reading of this year after the economy contracted in Q1 and Q2. Weekly Jobless Claims Tick Higher Weekly jobless claims rose less than expected last week. The Labor Department reported 217,000 Americans filed initial claims for unemployment benefits. That was up by 3,000 from the previous week but lower than expectations for 220,000. Continuing claims rose by 55,000 to 1.44 million in the week ending October 15. ECB Hikes Rates The European Central Bank announced its another 75-basis point rate hike today. That’s the second 0.75% rate hike in a row and puts the main benchmark rate in at 1.5%, the highest level seen since 2009. The ECB confirmed more rate hikes are ahead. In its statement, the bank said, “The Governing Council… expects to raise interest rates further, to ensure the timely return of inflation to its 2% medium-term inflation target.” The Eurozone is experiencing record-high inflation and a slowing economy. Several economists have projected a 50-basis point hike in December but the ECB did not indicate the level of future hikes. Key Earnings After the Close Here are the key companies set to report earnings after the close today: Apple (AAPL) Amazon (AMZN) Intel (INTC)
Continue Reading -->Coffee With Greta: Big Tech Stumbles
DJIA Futures: -102 (-0.3%) SPX Futures: -36 (-0.9%) NASDAQ Futures: -223 (-1.9%) Good morning friends! Futures are falling as traders digest disappointing earnings from big tech companies. Let’s get right to it! Alphabet Disappoints Alphabet (GOOGL) shares are dropping 6.7% after missing Q3 expectations on the top and bottom line. Here’s how the Google parent company’s results compared to analysts’ expectations: EPS: $1.06 vs $1.25 expected Revenue: $69.09 billion vs $70.58 billion expected YouTube ad revenue: $7.07 billion vs $7.42 billion expected Google Cloud revenue: $6.9 billion vs $6.69 billion expected Revenue growth slowed to just 6% in the quarter vs 41% in the same quarter a year ago. That’s the weakest quarter of growth since 2013 excluding early in the pandemic. The CFO said hiring in Q4 will slow to less than half of the additions in Q3. Microsoft Tops Fiscal Q1 Expectations, Guidance Falls Short Microsoft (MSFT) shares are falling 6.8% in premarket trade despite beating fiscal Q1 expectations after guidance came in weak. Here’s how the tech giant’s results compared to analysts’ expectations: EPS: $2.35 vs $2.30 expected Revenue: $50.12 billion vs $49.61 billion expected Revenue was up 11% year over year. But revenue in the Intelligent Cloud business segment missed expectations at $20.33 billion vs $20.36 billion estimated. Azure revenue grew just 35% in fiscal Q1, down from 40% in the previous quarter and lower than analysts’ expectations for growth over 36%. Microsoft forecast fiscal Q2 revenue between $52.35 billion and $53.35 billion vs analysts’ estimates of $56.05 billion. The company expects Azure revenue growth of 37% next quarter vs the 39.4% estimate from analysts. Price Hikes Boost Chipotle Earnings Chipotle Mexican Grill (CMG) shares are slipping 0.6% ahead of the open after reporting mixed Q3 results. Here’s how the restaurant chains results compared to analysts’ expectations: Adjusted EPS: $9.51 vs $9.21 expected Revenue: $2.22 billion vs $2.23 billion expected Same-store sales rose 7.6% year over year vs 7.3% expected. Total transactions declined 1% but the CEO said Chipotle saw “minimal resistance” to higher menu prices. Chipotle forecast Q4 same-store sales growth in the mid-to-high single digits and expects to open between 235 and 250 new restaurants by year-end. Boeing Reports Surprise Loss Boeing (BA) shares are down 0.7% in premarket trade after reporting an unexpected Q3 loss. Here’s how the plane maker’s results compared to analysts’ expectations: Loss per share: $6.18 vs $0.07 in earnings expected Revenue: $15.96 billion vs $17.76 billion expected Boeing reported a $2.8 billion loss in its defense unit due to the KC-46 tanker and Air Force One. Commercial revenue rose 40% from a year ago as Boeing delivered 112 planes during the quarter vs 85 in Q3 2021. The company generated nearly $3 billion in free cash flow, up from $507 million a year earlier. Boeing reiterated its forecast to achieve positive free cash flow for the year. Bed Bath & Beyond Appoints Interim CEO to Position Permanently Bed Bath & Beyond (BBBY) shares are tumbling 7.4% ahead of the open after naming its interim CEO, Sue Gove, to the position permanently. Gove was appointed to the position over the summer after the company’s board pushed out the former CEO. Bed Bath is still searching for a new CFO. The prior chief accounting officer is serving in that role on an interim basis. Mortgage Demand Falls Further Mortgage demand continued to drop last week as rates surged. The Mortgage Bankers Association reported purchase application fell 2% weekly and were down 42% year over year. Refinance applications slipped just 0.1% weekly and were down 86% annually. Demand is at the lowest level since 1997. The average 30-year contract rate rose to 7.16% from 6.94%, a 21-year high. New Home Sales Expected to Fall The Commerce Department reports new home sales for September at 10:00 a.m. ET. That report is expected to show the pace of sales fell last month to a seasonally adjusted annual rate of 593,000 units vs 685,000 in August. Key Earnings After the Close Here are the key companies set to report earnings after the close today: Meta (META) Ford (F)
Continue Reading -->Coffee With Greta: Traders Await Big Tech Earnings
DJIA Futures: -161 (-0.5%) SPX Futures: -14 (-0.4%) NASDAQ Futures: -15 (-0.1%) Good morning friends! Futures are falling as traders digest a barrage of Q3 earnings and await big tech earnings later today. Let’s get right to it! Coca-Cola Beats Q3 Expectations, Hikes Outlook Coca-Cola (KO) shares are up 2.4% ahead of the open after beating Q3 expectations and hiking its full-year outlook. Here’s how the beverage giant’s results compared to analysts’ expectations: Adjusted EPS: $0.69 vs $0.64 expected Revenue: $11.05 billion vs $10.52 billion expected Sales rose 10% while organic revenue jumped 16%, field by higher prices for the company’s products. Coke now expects comparable earnings growth of 6% to 7% this year vs 5% to 6% previously. UPS Reports Mixed Q3 Results UPS (UPS) shares are up 2.6% in premarket trade after reporting mixed Q3 results. Here’s how the shipping giant’s results compared to analysts’ expectations: EPS: $2.99 vs $2.84 expected Revenue: $24.16 billion vs $24.30 billion expected UPS reaffirmed its full-year outlook for revenue of $102 billion. The company’s shipping volumes decline in the quarter but that drop was partially offset by higher rates. General Motors Crushes Q3 Profit Expectations General Motors (GM) shares are up 3% ahead of the open after sharply beating Q3 earnings expectations. Here’s how the automaker’s results compared to analysts’ estimates: Adjusted EPS: $2.25 vs $1.88 expected Revenue: $41.89 billion vs $42.22 billion expected GM maintained its full-year guidance with the CFO saying the company expects to hit the “mid-point” of that outlook. In a letter to investors, CEO Mary Barra said “demand continues to be strong for GM products and we are actively managing the headwinds we face.” JetBlue Misses Q3 Profit Estimates JetBlue (JBLU) shares are slipping 3.6% in premarket trade after missing Q3 profit expectations. Here’s how the airline’s results compared to analysts’ estimates: Adjusted EPS: $0.21 vs $0.23 expected Revenue: $2.56 billion, in line with estimates Revenue rose 30% year over year as travelers paid higher fares. But JetBlue’s operating margin narrowed to 5.4% vs 9.4% a year ago as expenses surged 36%. In a note to employees, the CFO said, “we have to continue to be thoughtful about every penny we spend, particularly in today’s environment, since our entire business model of competing with lower fares is based on having lower costs relative to the legacy airlines.” She also said the airline won’t post a full-year profit “after the bumps we faced in the first half of the year with the Omicron variant and operational challenges.” General Electric Jumps Despite Profit Miss General Electric (GE) shares are up 1.9% ahead of the open despite missing Q3 expectations. Here’s how the company’s results compared to analysts’ expectations: Adjusted EPS: $0.35 vs $0.47 expected Revenue: $18.4 billion, in line with estimates GE cut its full-year EPS outlook to between $2.40 and $2.80 vs $2.80 to $3.50 previously. That updated forecast includes a $500 million warranty charge in the company’s renewable power division. The outlook implies $1.23 per share in Q4 earnings vs analysts’ expectations for $1.17. 3M Slashes Outlook 3M (MMM) shares are slipping 2.9% in premarket trade after mixed Q3 results and cutting its full-year outlook. Here’s how the company’s results compared to analysts’ estimates: EPS: $2.69 vs $2.60 expected Revenue: $8.6 billion vs $8.7 billion expected 3M now expects full-year EPS between $10.10 to $10.35 vs $10.30 to $10.80 previously. That implies roughly $8.1 billion in Q4 sales and $2.40 EPS vs Wall Street’s expectations for $8.4 billion in revenue and EPS of $2.55. Key Earnings After the Close Here are the key companies set to report earnings after the close today: Microsoft (MSFT) Alphabet (GOOGL) Chipotle Mexican Grill (CMG) Spotify (SPOT)
Continue Reading -->Coffee With Greta: Stocks Build on Best Week Since June
DJIA Futures: +212 (+0.7%) SPX Futures: +24 (+0.6%) NASDAQ Futures: +37 (+0.3%) Good morning friends! Futures are rising as traders try to build on the market’s best week since June. Let’s get right to it! Big Week of Earnings, Inflation Data The market is looking to build on last week’s rally after the major indexes all logged their largest weekly gains since June. Megacap tech names are all set to report Q3 results this week. Microsoft (MSFT) and Alphabet (GOOGL) report Tuesday, Meta (META) Wednesday, with Apple (AAPL) and Amazon (AMZN) on Thursday. The focus is on GOOGL and META after Snap’s (SNAP) revenue miss last week. This week will also cap off with the Fed’s preferred inflation gauge coming out Friday morning. The core PCE price index is expected to have slowed in September after accelerating more than expected in August. Tesla Cuts Car Prices in China Tesla (TSLA) shares are down 2.8% ahead of the open after the electric automaker cut some of its car prices in China. The starting price for the Model 3 is now 265,900 Chinese yuan ($36,615) from 279,900 yuan ($38,415.99). The Model Y price dropped to 288,900 yuan ($39,779.14) from 316,900 yuan ($43,634.51). The cuts reverse some of the earlier price increases Tesla implemented due to inflation of raw material costs. They also come after CEO Elon Musk said “China is experiencing a recession of sorts” last week. Tesla delivered a record 83,135 vehicles in China in September, a monthly record for the company. Chinese Tech Stocks Tumble Chinese tech stocks listed in the U.S. are tumbling as President Xi Jinping tightens his grip on power in the country. Alibaba (BABA) shares are dropping 10.9% in premarket trade with Baidu (BIDU) tumbling 11.9%. Xi paved the way for his third term as president over the weekend and packed the core committee of power with loyalists. The private tech sector in China has been under threat from Xi in recent years and those policies are expected to continue with him remaining in power. Oil Prices Drop on Weak China Demand Oil prices are falling this morning after Chinese data showed weak demand in September. West Texas Intermediate crude futures are down 2% to $83 bbl while Brent crude futures are down 1.6% to $92 bbl. China imported 9.79 million barrels per day of crude in September, down 2% year over year. Eurozone Business Activity Drops European business activity contracted further this month as surging energy costs put pressure on the economy. The euro zone’s flash composite PMI fell to 47.1 in October from 48.1 last month. Any reading below 50 represents a contraction. Germany is seeing the worst slowdown so far with business activity falling to 44.1 from 45.7. The euro dropped against the U.S. dollar following that data, trading at $0.982.
Continue Reading -->Coffee With Greta: Social Media Stocks Slide After SNAP’s Q3 Miss
DJIA Futures: -200 (-0.7%) SPX Futures: -27 (-0.7%) NASDAQ Futures: -133 (-1.3%) Good morning friends! Futures are slipping as traders digest the latest batch of earnings. Let’s get right to it! Snap Plunges on Revenue Miss Snap Inc (SNAP) shares are plunging 28% ahead of the open after missing Q3 revenue expectations. Here’s how the social media giant’s results compared to analysts’ expectations: EPS: $0.08 vs a small loss expected Revenue: $1.13 billion vs $1.14 billion expected Global Daily Active Users: 363 million vs 358.2 million expected Revenue was up just 6% year over year, the first single-digit growth since Snap went public in 2017. Even as daily active users rose 19% compared to a year ago, average revenue per user dropped 11%. In its letter to investors, the company said it is struggling with reduced spending from advertisers. The letter said, “We are finding that our advertising partners across many industries are decreasing their marketing budgets, especially in the face of operating environment headwinds, inflation-driven cost pressures, and rising costs of capital. The company declined to give Q4 guidance. Snap’s revenue miss is dragging down other stocks in premarket trade with Pinterest (PINS) tumbling 8.2%, Meta (META) down 4%, and Alphabet (GOOGL) falling 2%. American Express Slips Despite Earnings Beat American Express (AXP) shares are falling 4.8% in premarket trade despite beating Q3 expectations on the top and bottom line. Here’s how the credit card company’s results compared to analysts’ expectations: EPS $2.47 vs $2.40 expected Revenue: $13.56 billion vs $13.52 billion expected Card-member spending jumped 21% in the quarter, with travel spending surging 57%. American Express built up its loan loss reserves by $387 million in anticipation of a weakening economy. The company hiked its full-year EPS forecast to $9.25 to $9.65. Treasury Yields Extend Rally Treasury yields are up again today with the 10-year hitting a fresh 14-year high. The 10-year yield is up 6 basis points to 4.3% while the 2-year yield is up just about 1 basis point to 4.61%. The recent rally in yields comes amid ramped-up concerns about a recession. Philadelphia Fed President Patrick Harker said in a speech Thursday, “We are going to keep raising rates for a while. Given our frankly disappointing lack of progress on curtailing inflation, I expect we will be well above 4% by the end of the year.” Fed Governor Lisa Cooke echoed those comments, saying inflation is “too high” and the Fed will continue rate hikes “until the job is done.” Oil Prices Steady Oil prices are flat today as concerns about higher interest rates offset hopes of higher Chinese demand and production cuts. West Texas Intermediate crude futures are down 0.1% to $84 bbl while Brent crude futures are slipping 0.1% to $92 bbl. Several Fed officials made hawkish comments this week, tamping down optimism about increased demand in China as the country loosens Covid restrictions. Key Earnings Next Week Several mega-cap names are set to report Q3 results next week, here’s a look at the key reports on the calendar: Tuesday AM: Coca-Cola (KO), General Electric (GE), UPS (UPS), General Motors (GM), 3M (MMM) Tuesday PM: Microsoft (MSFT), Alphabet (GOOGL), Twitter (TWTR) Wednesday AM: Boeing (BA) Wednesday PM: Meta (META), Ford (F) Thursday AM: Caterpillar (CAT), Shopify (SHOP), Southwest Airlines (LUV) Thursday PM: Apple (AAPL), Amazon (AMZN), Pinterest (PINS) Friday AM: Exxon Mobil (XOM), Chevron (CVX)
Continue Reading -->Coffee With Greta: UK’s Truss Is Out
DJIA Futures: +60 (+0.2%) SPX Futures: +1 (+0.01%) NASDAQ Futures: -21 (-0.2%) Good morning friends! Futures are mixed as traders digest the latest batch of Q3 earnings. Let’s get right to it! U.K. Prime Minister Resigns U.K. Prime Minister Liz Truss resigned from her position today after implementing a failed tax-cutting budget that rocked financial markets. In a statement, Truss said, “We set out a vision for a low-tax, high-growth economy that would take advantage of Brexit. I recognize though, given the situation, I cannot deliver the mandate on which I was elected by the Conservative Party. I have therefore spoken to His Majesty the King to announce that I am resigning as leader of the Conservative Party.” Truss had faced pressure from her own party to step down with reports saying more than 100 MPs had written letters of no confidence in the prime minister. On September 23, her finance minister announced a “mini-budget” that included a series of unfunded tax cuts. That plan caused extreme turmoil in the British bond market and imploded the value of the pound. Most of the policies have since been reversed by the new finance minister. Tesla Slips As Q3 Revenue Falls Short Tesla (TSLA) shares are falling 5.7% ahead of the open after reporting mixed Q3 results. Here’s how the electric automaker’s results compared to analysts’ expectations: Adjusted EPS: $1.05 vs $0.99 expected Revenue: $21.45 billion vs $21.96 billion expected Automotive gross margins were unchanged from Q2 at 27.9%. CEO Elon Musk was upbeat about Tesla’s future on the earnings call. He said, “I can’t emphasize enough we have excellent demand for Q4 and we expect to sell every car that we make for as far into the future as we can see. The factories are running at full speed and we’re delivering every car we make, and keeping operating margins strong.” The automaker reiterated its previous guidance saying, “Over a multi-year horizon, we expect to achieve 50% annual growth in vehicle deliveries.” IBM Tops Q3 Expectations IBM (IBM) shares are up 4.2% in premarket trade after beating Q3 expectations on the top and bottom line. Here’s how the tech company’s results compared to analysts’ expectations: Adjusted EPS: $1.81 vs $1.77 expected Revenue: $14.11 billion vs $13.51 billion expected The company hiked its full-year revenue forecast following that beat. The CEO said, “With our year-to-date performance, we now expect full-year revenue growth above our mid-single digit model.” American Airlines Returns to Profitability American Airlines (AAL) shares are up 1.4% ahead of the open after topping Q3 estimates. Here’s how the airline’s results compared to analysts’ expectations: Adjusted EPS: $0.69 vs $0.56 expected Revenue: $13.46 billion vs $13.42 billion expected Revenue hit a record-high during the quarter and was up 13% from 2019 levels. That jump came even as American flew 10% less as travelers paid higher prices. The airline forecast total Q4 revenue will be up 13% compared to 2019 with adjusted EPS between $0.50 and $0.70. Weekly Jobless Claims Drop to 3-Week Low Weekly jobless claims dropped to a 3-week low last week as the impact of Hurricane Ian fades away. The Labor Department reported 214,000 Americans filed initial claims for unemployment benefits last week. That was down by 12,000 from the previous week and lower than economists’ expectations for an increase to 230,000. Existing Home Sales Expected to Fall The National Association of Realtors reports existing home sales for September at 10:00 a.m. ET. Economists expect that report to show sales slowed last month to a seasonally adjusted annual rate of 4.70 million units from 4.80 million in August. The housing market has slowed rapidly in recent months as mortgage rates hit the highest levels seen in more than 20 years. Upcoming Earnings Here are the key companies set to report earnings after the market close today: Snap (SNAP)
Continue Reading -->Coffee With Greta: Is This Netflix’s Big Comeback?
DJIA Futures: -186 (-0.6%) SPX Futures: -28 (-0.8%) NASDAQ Futures: -76 (-0.7%) Good morning friends! Futures are dropping despite strong Q3 results from several companies as economic concerns continue to weigh on the market. Let’s get right to it! Netflix Crushes Earnings Expectations Netflix (NFLX) shares are surging 11.1% ahead of the open after crushing Q3 earnings and user growth expectations. Here’s how the streaming giant’s results compared to analysts’ estimates: EPS: $3.10 vs $2.13 expected Revenue: $7.93 billion vs $7.837 billion expected New global paid net subscribers: 2.41 million vs 1.09 million expected That user growth was more than double Netflix’s own projection for just 1 million and 1.43 million of the total were in the Asia Pacific region. The company expects to add 4.5 million subscribers in the next quarter and revenue of $7.8 billion. Netflix said it is “very optimistic” about its new ad supported tier that launches next month. United Airlines Rallies After Reporting Q3 Profit, Upbeat Outlook United Airlines (UAL) shares are up 5.4% in premarket trade after beating Q3 expectations on the top and bottom line. Here’s how the airline’s results compared to analysts’ expectations: Adjusted EPS: $2.81 vs $2.28 expected Revenue $12.88 billion vs $12.75 billion expected Revenue was up 13% from Q3 2019 as travelers paid higher prices for flights. United forecast adjusted EPS of $2.25 per share in Q4, sharply higher than analysts’ estimates of $0.98. The airline said it “now expects fourth quarter adjusted operating margin to be above 2019 for the first time.” Higher Prices Boost Procter & Gamble Procter & Gamble (PG) shares are up 1.6% ahead of the open after fiscal Q1 expectations. Here’s how the consumer goods giant’s results compared to analysts’ estimates: EPS: $1.57 vs $1.54 expected Revenue $20.61 billion vs $20.28 billion expected Higher prices for its products offset a 3% decline in sales volume. The CFO said, “We feel very good about the consumer reaction to our price increases because we don’t see any major trade downs.” P&G expects net sales to decline 1% to 3% in fiscal 2023 and EPS growth to be at the low end of its prior forecast of flat to up to 4%. Housing Starts Tumble New home construction fell more than expected in September. The Commerce Department reported housing starts dropped 8.1% last month to a seasonally adjusted annual rate of 1.439 million units vs 1.47 million expected. Starts were down 7.7% year over year as high rates put pressure on the market. Single-family starts fell 4.7% while multi-family starts tumbled 13.1%. Building permits rose 1.4% to a seasonally adjusted annual rate of 1.564 million units vs 1.54 million expected. Mortgage Demand Drops to 25-Year Low Mortgage demand hit a 25-year low last week as rates continue to climb. The Mortgage Bankers Association reported purchase applications fell 4% weekly and were down 38% year over year. Refinance applications fell 7% weekly and 86% annually. The drop came as the average 30-year fixed contract rate rose to 6.94% from 6.81%. That’s the highest rate on the MBA index since 2002. More buyers turned to adjustable rate mortgages amid the higher rates. The ARM share of applications rose to 12.8% last week, the highest since March 2008. Upcoming Earnings Here are the key companies set to report earnings after the market close today: Tesla (TSLA) IBM (IBM)
Continue Reading -->Coffee With Greta: Stocks Extend Rally On Strong Earnings
DJIA Futures: +622 (+2.1%) SPX Futures: +82 (+2.2%) NASDAQ Futures: +269 (+2.4%) Good morning friends! Futures are rallying following a series of strong earnings reports this morning. Let’s get right to it! Goldman Sachs Rallies On Earnings Beat Goldman Sachs (GS) shares are up 3.3% ahead of the open after topping Q3 expectations on the top and bottom line. Here’s how the investment bank’s results compared to analysts’ expectations: EPS: $8.25 vs $7.69 expected Revenue: $11.98 billion vs $11.41 billion expected Profit was down 43% year over year while revenue fell 12%. Both fixed-income and equities trading revenue topped expectations, offsetting a miss in investment banking revenue. Goldman’s asset management and consumer & wealth management divisions also beat estimates. CEO David Solomon officially announced a corporate reorganization that was reported earlier this week. He said, “Today, we enter the next phase of our growth, introducing a realignment of our businesses that will enable us to further capitalize on the predominant operating model of One Goldman Sachs. We are confident that our strategic evolution will drive higher, more durable returns and unlock long-term value for shareholders.” Hasbro Earnings Squeezed By Inflation Hasbro (HAS) shares are slipping 0.6% in premarket trade after reporting mixed Q3 results. Here’s how the toy maker’s results compared to analysts’ expectations: Adjusted EPS: $1.42 vs $1.52 expected Revenue: $1.68 billion, in line with estimates The CEO said Hasbro’s third quarter “was further impacted by increasing price sensitivity for the average consumer” as high prices squeeze buyers. The company maintained its full-year forecast for revenue growth to be flat or slightly down. Albertsons Beats Fiscal Q2 Estimates Albertsons (ACI) shares are up 1% ahead of the open after beating fiscal Q2 expectations on the top and bottom line. Here’s how the grocery chain’s results compared to analysts’ expectations: Adjusted EPS: $0.72 vs $0.65 expected Revenue: $17.92 billion vs $17.71 billion expected. Revenue was up 8.6% year over year while same-store sales jumped 7.4%. But the cost of sales surged 9.6% and Albertsons’ gross margin contracted to 27.9% to 28.6%. Johnson & Johnson Tops Q3 Expectations, Trims Sales Guidance Johnson & Johnson (JNJ) shares are up 1.3% in premarket trade after beating Q3 expectations. Here’s how the pharmaceutical giant’s results compared to analysts’ expectations: Adjusted EPS: $2.55 vs $2.48 expected Revenue: $23.8 billion vs $23.4 billion expected Johnson & Johnson forecast full-year sales between $93 billion to $93.5 billion, down from $93.3 billion to $94.3 billion previously. The company expects full-year adjusted EPS of $10.02 to $10.07 vs $10 to $10.10 previously. Microsoft Confirms Job Cuts Microsoft (MSFT) shares are up 2.4% ahead of the open after a company spokesperson confirmed recent job cuts. The spokesperson told CNBC, “Like all companies, we evaluate our business priorities on a regular basis, and make structural adjustments accordingly. We will continue to invest in our business and hire in key growth areas in the year ahead.” Those cuts were first reported by Axios and impacted fewer than 1,000 people. Salesforce Rallies On New Investor Stake Salesforce (CRM) shares are up 6.5% in premarket trade after activist investor Starboard Value LP unveiled a stake in the company. CNBC reported Starboard’s founder said he sees significant opportunity in the software maker. He did not specify the dollar amount of his stake but said it is significant. Homebuilder Sentiment Expected to Fall The National Association of Homebuilders releases its sentiment index for October at 10:00 a.m. ET. That index is expected to fall 2 points to 44, as high mortgage rates continue to squeeze builders. That would be the 10th straight monthly decline with anything under 50 considered negative. Upcoming Earnings Here are the key companies set to report earnings after the market close today: Netflix (NFLX) United Airlines (UAL)
Continue Reading -->Coffee With Greta: Stocks Rebound From Rollercoaster Week
DJIA Futures: +344 (+1.2%) SPX Futures: +52 (+1.4%) NASDAQ Futures: +195 (+1.8%) Good morning friends! Futures are higher following a rollercoaster of a week. Let’s get right to it! Empire State Manufacturing Index Falls The New York Fed’s Empire State manufacturing index fell more than expected this month. The index dropped 7.6 points in October to negative 9.1. That’s the third straight negative reading and worse than economists’ expectations for negative 5. Any reading below 0 indicates deteriorating business conditions. The new orders index was unchanged at 3.7 while the shipments index plunged 19.9 points to negative 24.1. Unfilled orders rose by 3.8 points to negative 3.7 and the prices paid index jumped 9 points to 48.6. That’s the first increase in prices paid over the past three months. This index and the Philly Fed’s manufacturing index are both considered barometers for national factory activity. Bank of America Earnings Bank of America (BAC) shares are up 2.4% ahead of the open after topping Q3 expectations on the top and bottom line. Here’s how the bank’s results compared to economists’ expectations: EPS: $0.81 vs $0.77 expected Revenue: $24.61 billion vs $23.57 billion expected Profit fell 8% compared to a year ago as Bank of America built up its loan loss reserves by $378 million and paid $520 million in charge-offs for bad loans. But the consumer bank benefited from higher interest rates, with net interest income surging 24% to $13.87 billion. Oil Prices Rise Oil prices are higher this morning as the market digests loose monetary policy decisions from China against global recession fears. West Texas Intermediate crude futures are up 0.5% to $86 bbl while Brent crude futures are up 0.6% to $92 bbl. China’s central bank left interest rates unchanged for the second month in a row, bucking the trend of tightening monetary policy around the world. But the strength of the dollar and continued tightening from the U.S. Federal Reserve is keeping a lid on price gains today. Housing Market In Focus This Week The bulk of big economic data releases this week will focus on the U.S. housing market. The National Association of Homebuilders releases its October sentiment index at 10:00 a.m. ET on Tuesday. The Census Bureau reports housing starts and building permits for September on Wednesday. And the National Association of Realtors reports existing home sales for September on Thursday. The housing market has slowed drastically as mortgage rates have surged higher.
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