All posts by Greta Wall
Coffee With Greta: Digesting The Rally
DJIA Futures: -178 (-0.5%) SPX Futures: -10 (-0.2%) NASDAQ Futures: -1 (-0.01%) Good morning friends! Futures are slipping as traders digest last week’s record-breaking run. Let’s get right to it! Upcoming S&P 500 Members Rise Super Micro Computer (SMCI) shares are rallying 16.9% ahead of the open with Deckers Outdoor (DECK) up 4.5% after the S&P 500 announced Friday the two companies will join the blue-chip index later this month. They will replace Whirlpool (WHR) and Zions Bancorp (ZION) as of the market open on March 18. SMCI currently has a market cap of over $50 billion while DECK is valued at about $22 billion. JetBlue, Spirit Ditch Merger Agreement Spirit Airlines (SAVE) shares are plunging 19.7% in premarket trade after announcing it is ending its agreement to merge with JetBlue Airways (JBLU). JBLU shares are up 4.3%. The airlines have decided to ditch the deal after losing a federal antitrust lawsuit that challenged it in January. The companies appealed that decision soon after as required under the merger agreement but it was not expected to succeed. In a note to staff, JetBlue’s CEO said the merger was, “a bold and courageous plan intended to shake up the industry status quo, and we were right to compete with Frontier and go for an opportunity that would have supercharged our growth and provided more opportunities for crewmembers.” She added, “However, with the ruling from the federal court and the Department of Justice’s continued opposition, the probability of getting the green light to move forward with the merger anytime soon is extremely low.” Investment Firms Increase Macy’s Buyout Offer Macy’s (M) shares are jumping 14.2% ahead of the open after Arkhouse Management and Brigade Capital Management increased their buyout offer for the department store chain. The firms are now offering to acquire the M stock they do not already own for $24 per share vs the previous offer for $21 per share. That represents a premium of about 33% to the closing price of $18.01 per share on Friday and values Macy’s at $6.6 billion. Arkhouse said, “We continue to offer the company an attractive alternative solution through a sale of the company at a substantial premium. This would provide Macy’s stockholders with significant value and immediate liquidity.” Macy’s said, “The Macy’s Inc Board will carefully review and evaluate the latest proposal.” Bitcoin Tops $65,000 Bitcoin is starting the new week higher, inching closer to its all-time high. The cryptocurrency is currently up 4.1% at $65,334.82. It touched $65,658.10 earlier this morning, the highest level since November 2021. Bitcoin gained 21% last week, marking its best week in nearly a year. The coin hit an all-time high of $68,982.20 intraday in November 2021.
Continue Reading -->Coffee With Greta: AI-Fueled Record
DJIA Futures: -34 (-0.1%) SPX Futures: +1 (0.02%) NASDAQ Futures: +7 (+0.04%) Good morning friends! Futures are flat after Thursday’s record-breaking climb. Let’s get right to it! Record Highs The Nasdaq and the S&P 500 both ended the month of February at record highs. The tech-heavy Nasdaq ended Thursday’s session 0.6% higher at 16,082.33, the first record close since 2021. The S&P rose 0.4% to a record close of 5,097.27. All the major indexes rose in February with the Dow ending the month 1.8% higher, the S&P 500 rising 4.6%, and the Nasdaq leading with a 5.2% monthly gain. It was the Dow’s first four-month winning streak since May 2021. Dell Surges On Earnings Beat, Strong AI Demand Dell Technologies (DELL) shares are surging 27.3% ahead of the open after beating Q4 expectations on the top and bottom line. Here’s how the computer software company’s results compared to analysts’ estimates: EPS: $2.20 vs 1.73 expected Revenue: $22.32 billion vs $22.16 billion expected The stock is on track to open at a fresh all-time high following that beat. Dell reported a surge in demand for its artificial intelligence servers as its backlog rose to $2.9 billion from $1.6 billion in Q3. The majority of those servers are powered by Nvidia (NVDA) H100 chips. Dell’s COO also said the company is seeing strong interest in servers equipped with the next generation of AI chips, including Advanced Micro Devices (AMD)’s MI300x and Nvidia’s H200. That demand is helping to push NVDA shares up 1.1% and AMD shares up 2.7%. Hewlett Packard Drops On Revenue Drop Hewlett Packard Enterprise (HPE) shares are falling 3.2% in premarket trade after reporting a steep drop in fiscal Q1 revenue. Here’s how the information technology company’s results compared to analysts’ estimates: Adjusted EPS: $0.48 vs $0.45 expected Revenue: $6.76 billion vs $7.09 billion expected Revenue tumbled 14% year over year. HPE forecast fiscal Q2 revenue between $6.6 billion and $7 billion vs $7.1 billion expected. In Case You Missed It Pending home sales dropped unexpectedly in January. The National Association of Realtors reported the number of contracts signed to purchase a home fell 4.9% vs expectations for a 1.5% increase. It was the largest monthly drop in pending sales since August 2023 as rates pushed higher at the end of January. Transactions were down 8.8% year over year.
Continue Reading -->Coffee With Greta: Inflation Data As Expected
DJIA Futures: +50 (0.1%) SPX Futures: +15 (+0.3%) NASDAQ Futures: +96 (+0.5%) Good morning friends! Futures are higher after the release of new inflation data that was in line with expectations. Let’s get right to it! PCE As Expected The Fed’s preferred inflation gauge rose as expected in January. The Bureau of Economic Analysis’ personal consumption expenditures (PCE) price index rose 0.3% monthly and 2.4% year over year. The core PCE price index, which excludes food and energy, rose 0.4% monthly and 2.8% annually. Both numbers were in line with economists’ expectations. Services prices rose 0.6% monthly and 3.9% annually while goods prices fell 0.2% monthly and were down 0.5% from a year ago. Food prices rose 0.5% monthly and 1.4% annually while energy prices slid 1.4% monthly and dropped 4.9% annually. Personal incomes rose far more than anticipated, up 1% vs 0.3% expected. Personal spending decreased 0.1% vs expectations for a 0.2% gain. Weekly Jobless Claims Rise Weekly jobless claims rose more than expected last week. The Labor Department reported 215,000 Americans filed initial claims for unemployment benefits. That was up by 13,000 from the week before and higher than 210,000 expected. Continuing jobless claims rose by 45,000 to 1.91 million in the week ending February 17. Salesforce Rises After Earnings Beat Salesforce (CRM) shares are up 1.1% ahead of the open after beating Q4 expectations on the top and bottom line. Here’s how the software company’s results compared to analysts’ estimates: Adjusted EPS: $2.29 vs $2.26 expected Revenue: $9.29 billion vs $9.22 billion expected Total revenue was up 10.8% year over year while professional services revenue dropped 9%. Salesforce forecast Q1 adjusted EPS of $2.37 to $2.39 on $9.12 billion to $9.17 billion in revenue. That topped analysts’ expectations for $2.20 in adjusted EPS on $9.15 billion in revenue. For the full fiscal year, the company sees adjusted EPS between $9.68 and $9.76 on $37.7 billion to $38 billion in revenue. That implies 8.6% growth in the middle of the range. Analysts were forecasting full-year EPS of $9.57 on $38.62 billion in revenue. Snowflake Tumbles Snowflake (SNOW) shares are plunging 22.3% in premarket trade after beating Q4 expectations but announcing a surprise executive change. Here’s how the cloud software company’s results compared to analysts’ estimates: Adjusted EPS: $0.35 vs $0.18 expected Revenue: $774 million vs $760 million expected Total revenue increased 32% year over year with product revenue up 33%. Salesforce announced CEO Frank Slootman is retiring and will be replaced by former Google executive Sridhar Ramaswamy. In a statement, Slootman said, “There is no better person than Sridhar to lead Snowflake into this next phase of growth and deliver on the opportunity ahead in AI and machine learning. He is a visionary technologist with a proven track record of running and scaling successful businesses.” Snowflake forecast Q1 product revenue between $745 million and $750 million vs $759 million expected. The company said its Q1 adjusted operating margin would be 3% vs 7.2% expected.
Continue Reading -->Coffee With Greta: Waiting Game
DJIA Futures: -110 (-0.3%) SPX Futures: -15 (-0.3%) NASDAQ Futures: -83 (-0.5%) Good morning friends! Futures are falling as traders await new inflation data on Thursday. Let’s get right to it! Q4 GDP Revised Lower The U.S. economy expanded less than originally estimated in the fourth quarter. The Commerce Department’s first revision shows GDP expanded at a 3.2% annual pace at the end of 2023 vs the first estimate of 3.3%. Economists were expecting GDP to be unchanged. Consumer spending was revised higher to 3.0% growth from 2.8%. But business investment was weaker than originally reported. Total spending rose 0.9% vs the 2.1% initial estimate. Beyond Meat Soars On Revenue Beat Beyond Meat (BYND) shares are surging 63.6% ahead of the open after beating Q4 revenue expectations and detailing plans to cut costs this year. Here’s how the faux meat company’s results compared to analysts’ estimates: Loss per share: $0.92 vs $0.88 expected Revenue: $73.7 million vs $66.7 million expected Revenue dropped 7.8% year over year while sales volume jumped 8%. The CEO said Beyond Meat would “steeply reduce” operating expenses and cash use in 2024. The company forecast full-year net revenue between $315 million and $345 million vs $343.8 million expected. For the first quarter, Beyond expects revenue between $70 million and $75 million. TJX Reports Strong Holiday Quarter TJX Companies (TJX) shares are up 0.5% in premarket trade after beating Q4 expectations on the top and bottom line. Here’s how the retailer’s results compared to analysts’ estimates: EPS: $1.22 vs $1.12 expected Revenue: $16.41 billion vs $16.21 billion expected Sales jumped 13% year over year during the key holiday quarter. TJX forecast Q1 EPS between $0.84 and $0.86 vs $0.82 to $0.93 expected. For the full year, the company expects EPS of $3.94 to $4.02 vs $3.88 to $4.40 expected. Rates Drag Down Mortgage Demand Mortgage demand tumbled last week as rates remained above 7%. The Mortgage Bankers Association reported total application volume dropped 5.6% from the previous week. Purchase applications fell 5% weekly and 12% year over year. Refinance applications dropped 7% weekly and 1% annually. The drop came as the average 30-year fixed contract rate decreased to 7.04% from 7.06%, up about 0.25% compared to a year ago. Rates have pushed further above 7% this week with Mortgage News Daily showing the average 30-year fixed at 7.16% as of Tuesday.
Continue Reading -->Coffee With Greta: Earnings Continue
DJIA Futures: -27 (-0.1%) SPX Futures: +6 (+0.1%) NASDAQ Futures: +49 (+0.3%) Good morning friends! Futures are mixed as traders digest the latest batch of earnings and look ahead to key data. Let’s get right to it! Lowe’s Falls On Outlook Lowe’s (LOW) shares are down 1.1% ahead of the open after beating Q4 expectations but issuing guidance for revenue to fall. Here’s how the home improvement retailer’s results compared to analysts’ estimates: EPS: $1.77 vs $1.68 expected Revenue: $18.60 billion vs $18.45 billion expected Comparable sales dropped 6.2% year over year as DIY demand fell and poor weather in January impacted sales. Lowe’s forecast revenue between $84 billion and $85 billion in fiscal 2024, down from $86.38 billion last year. The company expects comparable sales to decline between 2% and 3% this year and EPS of $12 to $12.30. Macy’s Falls On Weak Q4 Macy’s (M) shares are sliding 2.2% in premarket trade after reporting mixed Q4 results. Here’s how the department store chain’s results compared to analysts’ estimates: Adjusted EPS: $2.45 vs $1.96 expected Revenue: $8.12 billion vs $8.15 billion expected Sales fell nearly 2% from a year ago during the quarter. Macy’s said it expects sales to remain stagnant this year, forecasting revenue between $22.2 billion and $22.9 billion this fiscal year vs $23.09 billion last year. The company said it expects comparable sales to range between a 1.5% decline and 1.5% gain year over year. As part of its strategy to return to growth, Macy’s plans to close about 150 stores. Zoom Pops On Strong Q4 Zoom Video Communications (ZM) shares are up 8.2% ahead of the open after beating Q4 expectations on the top and bottom line. Here’s how the video chat software company’s results compared to analysts’ estimates: Adjusted EPS: $1.22 vs $1.15 expected Revenue: $1.15 billion vs $1.13 billion expected Revenue rose less than 3% year over year. The company had 220,400 enterprise customers at the end of the quarter, up from 219,700 at the end of Q3. Zoom forecast Q1 adjusted EPS between $1.18 and $1.20 on $1.125 billion in revenue. Analysts were anticipating a forecast for $1.13 in adjusted EPS on $1.13 billion in revenue. For the full fiscal year, Zoom expects adjusted EPS of $4.85 to $4.88 on $4.60 billion in revenue vs $4.71 EPS on $4.65 billion in revenue expected. In Case You Missed It New home sales were weaker than expected in January. The Census Bureau reported sales of newly built homes rose 1.5% to a seasonally adjusted annual rate of 661,000 units vs 680,000 expected. Most of the country reported growth in new sales except for the South where new sales dropped 15.6%. December’s data was also revised lower to a 7.2% increase from 8% originally. The median price of a new home sold in January rose to $420,700.
Continue Reading -->Coffee With Greta: Awaiting Key Data Ahead
DJIA Futures: +6 (+0.02%) SPX Futures: +3 (+0.1%) NASDAQ Futures: +23 (+0.1%) Good morning friends! Futures are higher but flat as traders digest last week’s record-breaking moves and look ahead to key inflation data this week. Let’s get right to it! New Week Traders will get a quieter start to the week before some important economic data is released in the days ahead. The Census Bureau reports new home sales for January at 10:00 a.m. ET today. Tuesday’s data includes durable and core durable goods orders, plus the S&P Case-Shiller home price index before the market open followed by the Conference Board’s consumer confidence index at 10:00 a.m. ET. On Wednesday, traders will get the first revision of Q4 GDP, advanced goods trade balance, advanced retail inventories, and advanced wholesale inventories all at 8:30 a.m. ET. Thursday is the busiest day with weekly jobless claims, the PCE and core PCE price index, personal income, and personal spending at 8:30 a.m. ET. The core PCE price index is the Fed’s preferred inflation gauge. Then the National Association of Realtors reports pending home sales for January at 10:00 a.m. ET. Friday closes out the week with the S&P manufacturing PMI, ISM manufacturing PMI, construction spending, and revised consumer sentiment. There are several Fed speakers scheduled on Wednesday, Thursday, and Friday as well. Domino’s Jumps On Profit Beat Domino’s Pizza (DPS) shares are up 6.7% ahead of the open after beating Q4 profit expectations. Here’s how the pizza chain’s results compared to analysts’ estimates: EPS: $4.48 vs $4.38 expected Revenue: $1.40 billion vs $1.42 billion expected Same-store sales in the U.S. grew 2.8% year over year vs 2.2% growth expected. The company said its board of directors approved a 25% increase to its quarterly dividend on February 21. The $1.51 per share dividend will be paid on March 29 to shareholders of record as of March 15. Domino’s also announced a $1 billion buyback, increasing its total authorization for repurchases to $1.14 billion. Amazon Joins The DJIA Amazon (AMZN) shares are up 0.7% in premarket trade as the mega-cap tech stock is set to join the Dow Jones Industrial Average today. Amazon will replace Walgreens Boots Alliance (WBA) on the blue-chip index. The e-commerce giant will increase the 30-stock Dow’s exposure to the tech and consumer retail sectors.
Continue Reading -->Coffee With Greta: Extending NVDA’s Boost
DJIA Futures: +54 (+0.1%) SPX Futures: +8 (+0.2%) NASDAQ Futures: +17 (+0.1%) Good morning friends! Futures are higher after the S&P 500 closed at a fresh record-high on Thursday. Let’s get right to it! S&P Hits New Record The S&P 500 and Nasdaq both logged their best days since early 2023 on Thursday, fueled by Nvidia (NVDA)’s post-earnings rally. The S&P closed 2.1% higher, its best day since January 2023. The Nasdaq climbed 3%, its best session since February 2023. While the S&P closed at a new record-high, the Nasdaq is now within striking distance of its prior closing record of 16,057.44. It was a broad-based rally with 10 of the 11 sectors in the S&P positive on Thursday. Block Rallies On Surprise Profit Block (SQ) shares are rallying 17.3% ahead of the open after reporting a surprise profit in the fourth quarter. Here’s how the digital payments company’s results compared to analysts’ estimates: Adjusted EPS: $0.45, not comparable to estimates Revenue: $5.77 billion vs $5.7 billion expected Block’s $2.03 billion in gross profit was up 22% from a year ago. The company hiked its adjusted EBITDA forecast for the current quarter to at least $2.63 billion from $2.4 billion previously. Carvana Surges After First Annual Profit Carvana (CVNA) shares are surging 26.7% in premarket trade after reporting its first ever annual profit and issuing strong guidance. Here’s how the used car retailer’s Q4 results compared to analysts’ estimates: Loss per share: $1 vs $0.85 expected Revenue: $2.424 billion vs $2.562 billion expected For the full year, Carvana reported $450 million in net income vs the $1.59 billion loss in 2022. It was the company’s first-ever annual profit as it focused on streamlining operations. The company sold 76,090 units in Q4, down 13% year over year. Carvana forecast Q1 adjusted EBITDA “significantly above $100 million” vs $70.5 million expected. In Case You Missed It Existing home sales rose more than expected in January. The National Association of Realtors reported existing sales jumped 3.1% last month to a seasonally adjusted annual rate of 4 million units vs 3.97 million expected. Sales were down 1.7% year over year. Inventory also increased with 1.01 million homes for sale at the end of January, up 3.1% compared to a year ago. That marked a three-month supply at the current sales pace. The median price of an existing home sold last month rose 5.1% year over year to $379,100, marking an all-time high for the month of January.
Continue Reading -->Coffee With Greta: After NVDA
DJIA Futures: +208 (+0.5%) SPX Futures: +68 (+1.4%) NASDAQ Futures: +363 (+2.1%) Good morning friends! Futures are rallying as tech stocks jump on the heels of Nvidia’s strong earnings report. Let’s get right to it! Nvidia Rallies On Blockbuster Quarter Nvidia (NVDA) shares are rallying 11.8% ahead of the open after crushing quarterly estimates yet again. Here’s how the chipmaker’s results compared to analysts’ expectations: Adjusted EPS: $5.65 vs $4.64 expected Revenue: $22.10 billion vs $20.62 billion expected EPS surged 769% year over year while revenue jumped 265%. The company said, “Strong demand was driven by enterprise software and consumer internet applications, and multiple industry verticals including automotive, financial services, and healthcare Nvidia forecast Q1 sales of $24 billion vs $22.17 billion expected. CEO Jensen Huang expressed optimism the company will continue to expand through 2025 and beyond saying, “Fundamentally, the conditions are excellent for continued growth.” Rivian Plunges On Earnings Miss, Weak Guidance Rivian (RIVN) shares are tumbling 19.2% in premarket trade after missing Q4 expectations and issuing weak guidance. Here’s how the electric vehicle maker’s results compared to analysts’ estimates: Per share loss: $1.58 vs $1.35 expected Revenue: $1.3 billion, as expected Rivian forecast production will total 57,000 vehicles in 2024 vs 81,700 expected and down from 57,232 in 2023. The CEO said, “We firmly believe in the full electrification of the automotive industry, but recognize in the short-term, the challenging macro-economic conditions.” Rivian also announced it will cut its workforce by 10%. Moderna Pops On Surprise Profit Moderna (MRNA) shares are up 6.1% ahead of the open after reporting a surprise profit in the fourth quarter. Here’s how the pharmaceutical giant’s results compared to analysts’ estimates: EPS: $0.55 vs $0.97 loss expected Revenue: $2.81 billion vs $2.5 billion expected The company’s Covid vaccine sales dropped 43% year over year. Moderna booked $6.7 billion total in revenue from the Covid vaccine in 2023, down from $18 billion in 2022. The CFO said, “We started to see some fruits of productivity in the fourth quarter, and so that’s what we’re happy about.” Moderna reiterated its 2024 guidance for revenue of roughly $4 billion. Weekly Jobless Claims Weekly jobless claims fell more than expected last week as the labor market continues to maintain strength. The Labor Department reported 201,000 Americans filed initial claims for unemployment benefits. That was down by 12,000 from the week before and lower than 216,000 expected. It was the lowest level of claims in five-weeks. Continuing claims also fell by 27,000 to 1.86 million in the week ending February 10.
Continue Reading -->Coffee With Greta: NVDA Earnings Day
DJIA Futures: -80 (-0.2%) SPX Futures: -15 (-0.3%) NASDAQ Futures: -108 (-0.6%) Good morning friends! Futures are slipping as traders look ahead to the Fed minutes this afternoon and Nvidia (NVDA)’s earnings after the close. Let’s get right to it! Nvidia Earnings Day Nvidia (NVDA) shares are down 2% ahead of the open as traders look ahead to the company’s earnings report after the market close. The chipmaker is expected to report $20.6 billion in revenue for the fourth quarter, marking 240% growth year over year. It would be the second straight quarter of over 200% growth. The stock has been falling since it peaked at a high over $742 per share on February 14. Traders will be focused on the CEO’s comments about how long the company will be able to maintain such blockbuster growth. In 2023, Nvidia hiked guidance by large margins several times. Palo Alto Plunges Palo Alto Networks (PANW) shares are plunging 24.9% in premarket trade after beating fiscal Q2 expectations but cutting guidance. Here’s how the cybersecurity company’s results compared to analysts’ estimates: Adjusted EPS: $1.46 vs $1.30 expected Revenue: $1.98 billion vs $1.97 billion expected The company forecast revenue between $1.95 billion and $1.98 billion in the current quarter vs $2.04 billion expected. For the full year, Palo Alto expected total billings between $10.1 and $10.2 billion vs $10.7 to $10.8 billion previously. The company sees full year revenue ranging between $7.95 and $8 billion vs prior guidance for $8.15 to $8.2 billion. The CEO blamed the lowered guidance on a “shift” in strategy, “wanting to accelerate growth, our platform migration and consolidation and activating AI leadership.” Mortgage Demand Tumbles Mortgage demand dropped sharply last week as rates jumped back above 7%. The Mortgage Bankers Association reported total application volume fell 10.6% from the previous week. Purchase applications fell 10% weekly and 13% year over year. Refinance applications fell 11% weekly and were 0.1% higher annually. The average 30-year fixed contract rate rose to 7.06% from 6.87%. Rates have continued to move higher this week with the latest quote from Mortgage News Daily showing an average of 7.11%.
Continue Reading -->Coffee With Greta: Short Week, NVDA In Focus
DJIA Futures: -116 (-0.3%) SPX Futures: -16 (-0.3%) NASDAQ Futures: -65 (-0.4%) Good morning friends! Futures are slipping as the holiday-shortened week of trade begins. Let’s get right to it! Walmart Jumps On Earnings Beat Walmart (WMT) shares are up 4.9% ahead of the open after beating Q4 expectations on the top and bottom line. Here’s how the retail giant’s results compared to analysts’ estimates: Adjusted EPS: $1.80 vs $1.65 expected Revenue: $173.39 billion vs $170.71 billion expected Revenue rose 6% year over year. Global e-commerce sales surged 23%, topping $100 billion total. U.S. e-commerce sales rose 17%. Walmart forecast EPS of $1.48 to $1.56 in Q1 on a pre-stock split basis. The company expects consolidated net sales to rise 4% to 5% during the quarter. Walmart also announced today it will acquire smart TV maker Vizio for $2.3 billion or $11.50 per share. Home Depot Slips As Sales Decline Home Depot (HD) shares are falling 2.5% in premarket trade despite beating Q4 expectations as revenue declined year over year. Here’s how the home improvement retailer’s results compared to analysts’ estimates: EPS: $2.82 vs $2.77 expected Revenue: $34.79 billion vs $34.64 billion expected Sales declined nearly 3% from a year ago as demand slipped and higher rates caused homeowners to put off large projects. But the CFO said the company sees a chance to return to growth this year. He told CNBC, “Our market is on its way back to normal demand conditions. We’re not quite there yet, but the pressures we saw in 2023 are receding.” Home Depot forecast sales growth of about 1% in fiscal 2024 vs 1.6% expected. Nvidia Earnings Week Nvidia (NVDA) shares are down 1.3% ahead of the open as the market awaits the company’s earnings report this week. The chipmaker is scheduled to report Q4 earnings after the market close on Wednesday. Analysts are expecting the company to report $20.6 billion in revenue, up 240% year over year. . This will be Nvidia’s first earnings report since its market cap surpassed those of Alphabet (GOOGL) and Amazon (AMZN) last week.
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