All posts by Greta Wall
Coffee With Greta: End of Summer Slide Continues
DJIA Futures: -157 (-0.5%) SPX Futures: -23 (-0.6%) NASDAQ Futures: -103 (-0.8%) Good morning friends! Futures are sliding on the first day of September as the market remains focused on rising rates. Let’s get right to it! End of Summer Slide Continues The end of summer is looking bleak on Wall Street. The major indexes are all falling this morning after logging monthly losses for August and dropping for the past 4 sessions in a row. The Dow lost 4.1% in August, while the S&P 500 lost 4.2%, and the Nasdaq fell 4.6%. The drop comes amid hawkish comments from several Fed officials in recent days. CME Group’s FedWatch Tool shows 74% of traders now expecting another 0.75% rate hike later this month. Treasury Yields Extend Rally Treasury yields are still marching higher as traders dump bonds. The 2-year yield is up 4 basis points to 3.5% while the 10-year yield is up 15 basis points to 3.26%. The 2-year yield hit a high of 3.51% earlier today, its highest level since November 2007. The spread between those two yields remains inverted. The market is closely eyeing Friday’s August jobs report for signs of an economic slowdown after Fed Chair Jerome Powell said it may be necessary to cause some economic hardship in order to tackle inflation. Weekly Jobless Claims Drop Weekly jobless claims fell unexpectedly last week as the labor market continues to show strength. The Labor Department reported 232,000 Americans filed initial unemployment claims last week. That was down 5,000 from the previous week and better than expectations for an increase to 245,000. It was the lowest level of weekly claims since June. Continuing claims rose by 30,000 to 1.44 million in the week ending August 20. Nvidia Drops as U.S. Restricts Chip Sales to China Nvidia (NVDA) shares are down 4.4% ahead of the open after announcing Wednesday it had been instructed by the U.S. government to stop selling chips in China and Russia. In an SEC filing, the chipmaker said it was told on August 26 about a new license requirement for future exports to China. The restrictions will affect its A100 and H100 graphics chips. Nvidia now expects to lose $400 million in potential sales in China this quarter. The company said it is applying for a license to continue some Chinese exports but doesn’t know if it will be granted an exemption. Oil Prices Drop on Demand Fears Amid China Lockdowns Oil prices are falling today on fresh demand worries prompted by new Covid lockdowns in China. West Texas Intermediate crude futures are down 1.2% to $88.50 bbl while Brent crude futures are down 1.5% to $94 bbl. Shenzhen tightened Covid restrictions as cases continue to rise, suspending large events and indoor entertainment for three days. The city of Chengdu also announced a lockdown of its 21.2 million residents as it launches four days of citywide testing. Meantime, U.S. oil and gas inventories are continuing to fall. The Energy Information Administration reported a 3.3 million barrel drop in crude stockpiles last week and a 1.2 million barrel declines in gasoline inventories. In Case You Missed It Snap (SNAP) shares rallied 8.7% on Wednesday after announcing a restructuring plan. The company confirmed earlier reports it plans to lay off 20% of its employees and said it will scrap some projects. The cost-cutting efforts are expected to save Snap $500 million annually. You can learn how to invest the simple and easy way with my brand new course, Today I Learned How to Invest. Learn everything you need to start building the massive nest egg you deserve, in just 45 minutes!
Continue Reading -->Coffee With Greta: Private Job Growth Misses Big In August
DJIA Futures: +90 (+0.3%) SPX Futures: +18 (+0.5%) NASDAQ Futures: +102 (+0.8%) Good morning friends! Futures are higher as the market looks to recover from three straight days of losses but traders are digesting some disappointing data. Let’s get right to it! Private Sector Job Growth Disappoints Job growth in the U.S. private sector sharply missed expectations in August. Payroll firm ADP reported the U.S. economy added just 132,000 private jobs last month vs 300,000 expected. That was down from 270,000 in July. ADP’s chief economist said the data “suggests a shift toward a more conservative pace of hiring, possibly as companies try to decipher the economy’s conflicting signals. We could be at an inflection point, from super-charged job gains to something more normal.” The report also adds to inflation worries as wages jumped 7.6% year over year. The services sector added 110,000 jobs, leisure and hospitality gained 96,000 and trade, transportation and utilities added 54,000. But several sectors saw decreases. Financial activities lost 20,000 jobs, education and health services list 15,000, and professional and business services lost 14,000. This comes ahead of the official August jobs report on Friday which is expected to show a gain of 318,000 jobs and the unemployment rate unchanged at 3.5%. Bed Bath & Beyond Plunges After Announcing Layoffs, Store Closures Bed Bath & Beyond (BBBY) shares are cratering 31.4% ahead of the open after announcing store closures and layoffs. The retailer said today it will close about 150 “lower producing” stores and layoff 20% of its corporate and supply chain staff. The company also announced it has secured more than $500 million in new financing as it works to turnaround its business. Bed Bath said its sales have continued to slow sharply in the current fiscal quarter, with same-store sales down 26% so far in Q3. The retailer said it will overhaul its merchandise and bring back popular national brands in an effort to win back customers. The interim CEO said, “We are embracing a straight-forward, back-to-basics philosophy that focuses on better serving our customers, driving growth, and delivering business returns.” Bed Bath also announced its COO is leaving the company and it has eliminated that role and the chief stores officer role. Snap Plans Massive Layoffs Snap (SNAP) shares are tumbling 10.2% in premarket trade after reports the company is planning a massive round of layoffs. The Verge first reported on Tuesday the social media company plans to lay off 20% of its employees. The cuts are expected to begin today, impacting nearly 1,300 employees. The hardware and developer products divisions will likely see the largest impact. Snap hired aggressively during the pandemic-era tech boom but its business has taken a hit coming out of the pandemic. Oil Prices Drop on Recession Fears Oil prices are lower today as recession fears once again grip the market. West Texas Intermediate crude futures are down 2.9% to under $89 bbl while Brent crude futures are down 3.5% to under $96 bbl. The drop comes as factory activity continued to contract in China in August and amid ongoing worries about aggressive rate hikes at Central Banks around the world. Hawkish Fed Comments Continue Cleveland Fed President Loretta Mester struck a hawkish tone in a speech this morning. Mester said, “My current view is that it will be necessary to move the fed funds rate up to somewhat above 4 percent by early next year and hold it there. I do not anticipate the Fed cutting the fed funds rate target next year.” Benchmark rates are currently in a range of 2.25% to 2.5%. Mester also said she expects the rate hikes to slow economic growth and predicted higher unemployment and continued volatility in the financial market. She said the bank must remain aggressive on inflation until substantial progress is seen. “It would be a mistake to declare victory over the inflation beast too soon. Doing so would put us back in the stop-and-go monetary policy world of the 1970s, which was very costly to households and businesses,” she said. In Case You Missed It Consumer confidence rose for the first time in 4 months. The Conference Board’s consumer confidence index jumped 7.5 points in August to 103.2 vs 97.4 expected. U.S. job openings jumped to 11.2 million in July vs an expected decrease to 10.3 million. Openings were nearly double the amount of unemployed workers in the month. National U.S. home price gains slowed in June to an annual pace of 18% vs 19.9% in May. The housing market has slowed sharply as mortgage rates rise. You can learn how to invest the simple and easy way with my brand new course, Today I Learned How to Invest. Learn everything you need to start building the massive nest egg you deserve, in just 45 minutes!
Continue Reading -->Coffee With Greta: Best Buy Sales Tumble, the Stock is Still Up
DJIA Futures: +134 (+0.4%) SPX Futures: +20 (+0.5%) NASDAQ Futures: +86 (+0.7%) Good morning friends! Futures are popping after back-to-back losing sessions. Let’s get right to it! Best Buy Tops Q2 Expectations Even As Sales Tumble Best Buy (BBY) shares are up 1.6% ahead of the open after beating fiscal Q2 expectations. The electronics retailer reported adjusted earnings of $1.54 per share on $10.33 billion in revenue. That was better than analysts’ expectations for adjusted EPS of $1.27 on $10.24 billion in revenue. Same-store sales dropped 12.1% year over year in the quarter as inflation forced consumers to pull back on spending. That was better than Best Buy’s forecast for a 13% drop. The CEO said Best Buy is “focused on balancing our near-term response to difficult conditions and managing well what is in our control.” The company did not give specific guidance but said it expects a larger sales decline in Q3. Big Lots Rises on Smaller Q2 Loss than Expected Big Lots (BIG) shares are up 1.4% in premarket trade after reporting a smaller-than-expected loss in the second quarter. The discount retailer reported an adjusted loss of $2.28 per share on $1.35 billion in revenue. That was better than analysts’ expectations for an adjusted loss of $2.47 per share on $1.46 billion in revenue. Same-store sales fell 9.2% vs expectations for a 9.8% decline. The CEO said, “We remain laser focused on helping our customers navigate these challenging times by delivering outstanding value across our assortment.” Big Lots forecast same-store sales will be down in the low double-digit range in the current quarter. Oil Prices Fall on Demand Concerns Oil prices are lower today as the market anticipates higher interest rates will cause an economic slowdown and soften demand. West Texas Intermediate crude futures are down 2.4% to under $95 bbl while Brent crude futures are down 2.9% to $102 bbl. The Fed is expected to continue aggressive rate hikes with the Fed Chair saying it will likely cause some economic hardship. The oil market has been in a back and forth between demand concerns and supply worries. The American Petroleum Institute releases its data on U.S. inventory levels later today. Consumer Confidence Expected to Rebound The University of Michigan releases its final August consumer confidence index at 10:00 a.m. ET. That survey is expected to show confidence rose to 97.4 this month from 95.7 in July. Consumers have been feeling better about the impact of inflation since the Fed began larger rate hikes to tackle high prices. Lower gas prices have also alleviated some of the price concerns among Americans. JOLTS on Deck The Labor Department’s July Job Openings and Labor Turnover Survey (JOLTS) will be released at 10:00 a.m. ET. That survey is expected to show the number of job openings in the U.S. economy dropped to 10.3 million last month from 10.7 million in June. That would be the second straight monthly decline but available jobs would still outnumber unemployed workers. This is the first piece of key labor market data this week. ADP releases the August private payrolls report on Wednesday followed by the official Labor Department August jobs report on Friday. In Case You Missed It You can learn how to invest the simple and easy way with my brand new course, Today I Learned How to Invest. Learn everything you need to start building the massive nest egg you deserve, in just 45 minutes!
Continue Reading -->Coffee With Greta: Jackson Hole Selloff Continues
DJIA Futures: -218 (-0.7%) SPX Futures: -29 (-0.7%) NASDAQ Futures: -111 (-0.9%) Good morning friends! Futures are lower as traders continue to dump risk assets after hawkish comments from the Fed Chair on Friday. Let’s get right to it! Jackson Hole Selloff Continues Futures are sliding as concerns about tighter monetary policy continue to weigh on the market after Fed Chair Jerome Powell’s Jackson Hole speech last week. Powell struck down market expectations the bank will pivot to a smaller rate hike at its next meeting. The major indexes all turned negative for August with Friday’s drop. CME Group’s FedWatch Tool shows 66.5% of traders expecting the Fed to enact another 0.75% rate hike at the September meeting. Powell said the central bank will lift interest rates as much as needed to tackle high inflation, even if it causes an economic slowdown. He said getting inflation under control will take “some time” and will require bringing “some pain to households and businesses”. Powell said those are the “unfortunate costs of reducing inflation”. Yields Pop on Fed Expectations Treasury yields are pushing higher following Powell’s speech on Friday. The 2-year Treasury yield is up 5 basis points to 3.45% while the 10-year yield is up 7 basis points to 3.10%. That yield curve remains inverted as the market dumps bonds in anticipation of a recession. Bitcoin Drops Below $20,000 Bitcoin dropped back below $20,000 over the weekend after Powell’s hawkish comments at Jackson Hole. The coin is trading around $19,900 this morning while Ethereum is just under $1,500. That’s the lowest level for Bitcoin since mid-July. The sharp decline comes as traders dump risk assets across the board. The drop is also dragging down shares of Coinbase (COIN) which are 2.2% lower ahead of the open. Oil Prices Rise on Prospect of OPEC+ Supply Cut Oil prices are rising today as the possibility of an OPEC+ supply cut continues to loom over the market. West Texas Intermediate crude futures are up 1.3% to over $94 bbl while Brent crude futures are up 0.9% to just under $102 bbl. Saudia Arabia’s energy minister raised the idea of reducing production last week in order to support prices. OPEC+ is set to meet on September 5 to vote on supply levels for October. In Case You Missed It You can learn how to invest the simple and easy way with my brand new course, Today I Learned How to Invest. Learn everything you need to start building the massive nest egg you deserve, in just 45 minutes!
Continue Reading -->Coffee With Greta: Focus on Jackson Hole as Inflation Slows
DJIA Futures: +20 (+0.1%) SPX Futures: -4 (-0.1%) NASDAQ Futures: -17 (-0.1%) Good morning friends! Futures are flat as the market eyes the Fed Chair’s speech at Jackson Hole after new data shows inflation slowing. Let’s get right to it! Fed Chair to Speak at Jackson Hole Fed Chair Jerome Powell is set to speak at the Jackson Hole Symposium at 10:00 a.m. ET. The market is focused on that speech for more clarity about the bank’s future plans for rate hikes. He’s expected to strike a hawkish tone on inflation and downplay expectations the Fed will begin rate cuts next year. CME Group’s FedWatch Tool shows 56.5% of traders leaning toward another 0.75% rate hike at the September Fed meeting. PCE Inflation Dips in July The Fed’s preferred inflation gauge slowed more than expected in July. The Bureau of Economic Analysis’s personal consumption expenditures price index fell 0.1% monthly and slowed to a 6.3% annual pace. That was a sharp slowdown from the 1% monthly and 6.8% annual gain in June. The core PCE price index – which excludes food, energy, and trade services and is the Fed’s favorite inflation measure – rose 0.1% monthly and 4.6% year over year. That was a slowdown from June and better than expectations for a 0.2% monthly and 4.8% annual gain. Although the data shows inflation slowing, it is still running far above the Fed’s target. Powell is expected to emphasize the bank’s commitment to lowering inflation to its target at Jackson Hole. Gap Reports Unexpected Profit Gap (GPS) shares are rallying 6.9% ahead of the open after reporting an unexpected fiscal Q2 profit. The retailer reported adjusted earnings of $0.08 per share on $3.86 billion in revenue. That was better than analysts’ expectations for an adjusted loss of $0.05 per share on $3.82 billion in revenue. Same-store sales were down 10% year over year. Gap withdrew its full-year outlook but said sales so far in fiscal Q3 have improved and the company is “cautiously optimistic” about the second half of the year. Ulta Beats Q2 Expectations Ulta Beauty (ULTA) shares are up 3.3% in premarket trade after topping fiscal Q2 expectations. The beauty retailer reported earnings of $5.70 per share on $2.3 billion in revenue. That topped analysts’ expectations for EPS of $4.99 on $2.2 billion in revenue. Revenue was up 16.8% year over year while same-store sales jumped 14.4% vs 10.5% expected. The strong results pushed Ulta to hike its full-year forecast. The company now expects earnings between $20.70 and $21.20 per share this year, up from its prior outlook of $19.20 to $20.10. Revenue is expected to range between $9.65 billion and $9.75 billion vs $9.35 billion to $9.55 billion previously. Affirm Drops on Weak Outlook Affirm Holdings (AFRM) shares are tumbling 10.7% ahead of the open despite beating fiscal Q4 revenue expectations as its outlook came up short. The buy-now-pay-later company reported a loss of $0.65 per share on $364.1 million in revenue. That was worse than analysts’ expectations for a loss of $0.58 per share but topped revenue estimates of $355 million. Gross merchandise volume (GMV) surged 77% year over year to $4.4 billion vs $4.1 billion expected. Affirm forecast fiscal Q1 GMV of $4.2 billion to $4.4 billion with revenue between $345 million and $365 million. That missed analysts’ expectations for $4.55 billion in GMV and $386 million in revenue. The company forecast full-year GMV between $20.5 billion and $22 billion with revenue from $1.625 billion to $1.725 billion. Analysts were projecting $19.15 billion in GMV and $1.91 billion in revenue. The CFO said, “In light of the uncertain macroeconomic backdrop, we are approaching our next fiscal year prudently while maintaining our focus on driving responsible growth and continuing to invest in strengthening our leadership position. We continue to expect to achieve a sustained profitability run rate, on an adjusted operating income basis, by the end of fiscal 2023.” Oil Prices Slip Oil prices are slipping today but on track for weekly gains. West Texas Intermediate crude futures are down 0.4% at $92 bbl while Brent crude futures are down 0.2% at $99 bbl. New economic data has lowered recession fears but the market remains on edge ahead of Powell’s Jackson Hole speech. The UAE also became the latest OPEC+ country today to show support for a production cut in order to support prices. In Case You Missed It You can learn how to invest the simple and easy way with my brand new course, Today I Learned How to Invest. Learn everything you need to start building the massive nest egg you deserve, in just 45 minutes!
Continue Reading -->Coffee With Greta: Positive Economic Data Boosts Stocks
DJIA Futures: +52 (+0.2%) SPX Futures: +18 (+0.4%) NASDAQ Futures: +68 (+0.5%) Good morning friends! Futures are higher after the release of some positive economic data. Let’s get right to it! Q2 GDP Contraction Revised Lower The Commerce Department’s second estimate shows the U.S. economy contracted at an annual rate of 0.6% in Q2. That was an improvement from the first estimate which showed the economy shrank 0.9% annually. The change comes as consumer spending was revised to show a 1.5% gain vs the prior estimate of 1%. It was still the second-straight quarterly decline in GDP after the 1.6% contraction in Q1. Weekly Jobless Claims Fall to One-Month Low Weekly jobless claims fell to a one-month low last week, showing no signs of surging layoffs. The Labor Department reported 243,000 Americans filed initial claims for unemployment benefits. That was down 2,000 from the previous week’s revised level and better than expectations for claims to rise to 255,000. Continuing claims fell by 10,000 to 1.42 million in the week ending August 13. Peloton Plunges On Big Fiscal Q4 Loss Peloton (PTON) shares are plunging 14.9% in premarket trade after reporting a steeper loss than expected in its fiscal fourth quarter. The connected fitness equipment maker reported a loss of $3.68 per share on $679 million in revenue. That was worse than analysts’ expectations for a loss of $0.76 per share on $682 million in revenue. The CEO said $415 million of the $1.2 billion operating loss was related to restructuring charges. He said, “The loss reflects the substantial progress we made this last quarter re-architecting the business to reduce the current and future inventory overhang, converting fixed to variable costs, and addressing numerous supply chain issue.” It was Peloton’s 6th consecutive quarterly loss but the company said it’s aiming to reach breakeven cash flow by the second half of fiscal 2023. Nvidia Tumbles on Weak Outlook Nvidia (NVDA) shares are dropping 3% ahead of the open after weak Q2 earnings and guidance. The chipmaker reported adjusted earnings of $0.51 per share on $6.7 billion in revenue. That missed analysts’ expectations for adjusted EPS of $1.26 on $8.10 billion in revenue but was in line with Nvidia’s preliminary results two weeks ago. Revenue in the gaming department plunged 33% year over year which the CFO blamed on “macroeconomic headwinds across the world”. Nvidia forecast $5.9 billion in sales in Q3 vs analysts’ estimates of $6.95 billion. Salesforce Guidance Comes Up Short Salesforce (CRM) shares are falling 8.1% in premarket trade after beating fiscal Q2 expectations but giving a disappointing forecast for the remainder of the year. The software company reported adjusted earnings of $1.19 per share on $7.72 billion in revenue. That was better than analysts’ expectations for adjusted EPS of $1.02 on $7.69 billion in revenue. Salesforce called for adjusted earnings of $1.20 to $1.21 per share in fiscal Q3 on revenue between $7.82 billion and $7.83 billion. Analysts were estimating fiscal Q3 adjusted EPS of $1.29 on $8.07 billion in revenue. The company also cut its full-year outlook, calling for EPS between $4.71 and $4.73 and $30.9 billion to $31 billion in revenue. That’s down from its previous forecast for EPS of $4.74 to $4.76 on $31.7 billion to $31.8 billion in revenue. Tesla Stock Split Takes Effect Tesla (TSLA) shares are up 1.6% ahead of the open as the automaker’s 3-for-1 stock split takes effect. The stock is trading just above $300 per share on a split-adjusted basis. Tesla’s board of directors approved the split on August 5. The company said it would provide more flexibility for employees managing their equity and would serve as a recruiting tool. This is Tesla’s second stock split in 2 years. The stock has gained about 104% since the 5-for-1 split in August 2020. Oil Prices Hold Steady Oil prices are mixed today as uncertainty continues over whether OPEC+ will cut production and the prospect of Iranian oil returning to the market. West Texas Intermediate crude futures are up 0.1% at $95 bbl while Brent crude futures are up 0.4% at $101.60 bbl. Talks are continuing between the EU, U.S., and Iran to revive the 2015 nuclear deal. Falling U.S. inventories are also putting upward pressure on prices. The Energy Information Administration reported a 3.3 million barrel drop in crude stockpiles last week vs a 933,000 barrel decline expected. Gasoline inventories fell by 27,000 barrels vs expectations for a 1.5 million barrel drop. In Case You Missed It The National Association of Realtors reported pending home sales fell 1% in July. That was smaller than economists’ expectations for a 3% drop. Pending sales were down 19.9% year over year. These represent contracts signed last month with sales expected to close in 30 to 60 days. You can learn how to invest the simple and easy way with my brand new course, Today I Learned How to Invest. Learn everything you need to start building the massive nest egg you deserve, in just 45 minutes!
Continue Reading -->Coffee With Greta: Nordstrom Plunges on Weak Outlook
DJIA Futures: -25 (-0.1%) SPX Futures: +1 (+0.02%) NASDAQ Futures: +1 (+0.01%) Good morning friends! Futures are flat as the market continues to struggle. Let’s get right to it! Nordstrom Drops After Slashing Forecast Nordstrom (JWN) shares are tumbling 12.7% ahead of the open after cutting its full-year outlook despite beating Q2 expectations. The retailer reported adjusted earnings of $0.81 per share on $4.1 billion in revenue. That was better than analysts’ expectations for adjusted EPS of $0.80 on $3.97 billion in revenue. Nordstrom now expects annual sales growth of 5% to 7%, down from its previous forecast for 6% to 8% growth. The company called for full-year adjusted EPS between $2.30 and $2.60, down from $3.20 to $3.50. The CEO said, “Customer traffic and demand decelerated significantly beginning in late June, predominantly at Nordstrom Rack. We are adjusting our plans and taking action to navigate this dynamic in the short term, including aligning inventory and expenses to recent trends.” Peloton Rallies on Amazon Deal Peloton (PTON) shares are rallying 7.5% in premarket trade after reaching a deal to sell its fitness equipment and apparel on Amazon (AMZN). The items now sold on Amazon include the original Peloton Bike and its strength product the Peloton Guide. The Bike+ and Tread will not be sold on the site. This is Peloton’s first-ever partnership with another retailer to sell its products. The company’s cycling shoes, bike mat, weights, yoga blocks, water bottle, and heart rate armband will also be on Amazon. The branded apparel sold on the site will include sports bras, leggings, shorts, tank tops, hats, and joggers. The Chief Commercial Officer said, “This is a really good start for us, with a digital retailer, to test the waters.” Mortgage Demand Slips, First-Time Buyers Return Mortgage demand is continuing to weaken amid higher rates but the latest data shows first-time buyers returning to the market. New data from the Mortgage Bankers Association shows purchase applications fell 1% last week and were down 21% year over year. But there was a jump in demand for loans with lower down payments, which are typically used by first-time homebuyers. Conventional applications fell 2% while government applications increased 4%. Refinance applications dropped 3% weekly and plunged 83% annually. The drop came as rates moved higher. The average 30-year contract fixed rate rose to 5.65% from 5.45% the previous week. Market Split on Next Fed Rate Hike The market is split on their expectations for the next Fed rate hike amid increasing signs the U.S. economy is slowing. CME Group’s FedWatch Tool shows 43.5% of traders expect the bank to pivot to a 0.5% hike. While 56.5% are expecting the Fed to stick with a 0.75% rate hike. The market is looking for more clarity from Fed Chair Jerome Powell who is set to speak at the Jackson Hole Symposium Friday morning. Biden’s Decision On Student Loan Forgiveness Expected Today President Biden is expected to make a decision on student loan forgiveness as early as today. The White House is facing an end-of-August deadline when the current student loan forbearance program expires. Biden has been under pressure to forgive some loans not just pause payments. Three sources told NBC News that he plans to extend forbearance again and forgive loans up to $10,000 for those making less than $125,000 per year. The White House refused to comment on those reports. Oil Prices Climb Oil prices are climbing again today amid continued talks about OPEC+ cutting production. West Texas Intermediate crude futures are up 0.7% to over $94 bbl while Brent crude futures are up 0.8% to $101 bbl. The American Petroleum Institute also reported another drop in U.S. inventories. The API report showed crude stockpiles fell by 5.6 million barrels last week, sharply higher than analysts’ expectations for a 900,000 barrel decline. The Energy Information Administration reports official supply levels later today. In Case You Missed It The Commerce Department reported new home sales plunged 12.6% in July to a seasonally adjusted annual rate of 511,000 units. That was lower than expectations and the slowest sales pace since January 2016. New home sales were down 29.6% year over year. The supply of new homes for sale rose 18.5% from June, representing a 10.9-month supply at the current sales pace. That’s the highest level of supply since March 2009. You can learn how to invest the simple and easy way with my brand new course, Today I Learned How to Invest. Learn everything you need to start building the massive nest egg you deserve, in just 45 minutes!
Continue Reading -->Coffee With Greta: Stocks Slip After Worst Day Since June
DJIA Futures: -22 (-0.1%) SPX Futures: -2 (-0.04%) NASDAQ Futures: -4 (-0.03%) Good morning friends! Futures are down slightly following the worst day since June as traders digest a mix of Q2 earnings. Let’s get right to it! Macy’s Tops Q2 Expectations Macy’s (M) shares are up 1.5% ahead of the open after beating fiscal Q2 expectations. The retailer reported adjusted earnings of $1 per share on $5.6 billion in revenue. That was better than analysts’ expectations for adjusted EPS of $0.85 on $5.49 billion in revenue. Despite the strong quarter, Macy’s cut its full-year forecast in anticipation of slowing consumer spending on discretionary items like clothing. The company now expects 2022 revenue between $24.34 billion and $24.58 billion vs its previous outlook for $24.46 billion to $24.7 billion. Macy’s forecast annual adjusted EPS between $4.00 and $4.20, down from $4.53 to $4.95. Analysts were estimating adjusted EPS of $4.51 on $24.36 billion in revenue. Dick’s Sporting Goods Hikes Outlook After Strong Q2 Dick’s Sporting Goods (DKS) shares are up 2.4% in premarket trade after beating Q2 expectations and hiking its full-year outlook. The sporting goods retailer reported adjusted earnings of $3.68 per share on $3.11 billion in revenue. That was better than analysts’ expectations for adjusted EPS of $3.58 on $3.07 billion in revenue. Dick’s now expects full-year adjusted earnings to be between $10 and $12 per share vs its previous forecast of $9.15 to $11.70. The company expects comparable store sales to decline between 6% and 2% this year, down from its previous forecast for an 8% to 2% decline. Zoom Tumbles After Cutting Forecast Zoom Video Communications (ZM) shares are tumbling 11.8% ahead of the open after reporting mixed fiscal Q2 results and cutting its full-year forecast. The video-calling software company reported adjusted earnings of $1.05 per share on $1.10 billion in revenue. That topped analysts’ expectations for adjusted EPS of $0.94 but missed estimates for $1.12 billion in revenue. Revenue rose 8% year over year, down from 12% growth in fiscal Q1. The CFO said, “We have implemented initiatives focused on driving new online subscriptions, which have shown early promise but were not enough to overcome the macro dynamics in the quarter.” Zoom forecast adjusted fiscal Q3 earnings of $0.82 to $0.83 per share on $1.095 billion to $1.100 billion in revenue. That was lower than analysts’ estimates for adjusted EPS of $0.91 on $1.15 billion in revenue. The also lowered its full-year outlook, calling for adjusted earnings of $3.66 to $3.69 per share and $4.385 billion to $4.395 billion in revenue. The mid-range of that forecast would represent revenue growth of just 7% annually. Oil Prices Climb on Supply Concerns Oil prices are climbing higher today as supply concerns take focus again. West Texas Intermediate crude futures are up 1.2% to $91.50 bbl while Brent crude futures are up 1.1% to $97.50 bbl. The jump comes after Saudi Arabia’s energy minister floated the idea of OPEC+ cutting production in the months ahead to support prices. The latest data is also expected to show another drop in U.S. crude inventories. The American Petroleum Institute releases its inventory report today followed by the Energy Information Administration on Wednesday. In Case You Missed It Ford (F) announced plans to cut 3,000 jobs Monday in an effort to reduce costs. The majority of those cuts will be in North America and include 2,000 salaried positions and 1,000 agency jobs. Executives announced the layoffs in a message to employees which said, “Building this future requires changing and reshaping virtually all aspects of the way we have operated for more than a century.” A new survey found the majority of U.S. economists expect a recession in 2023 caused by the Fed’s response to inflation. 72% of respondents to the National Association of Business Economics survey said the recession will begin by the middle of next year. 19% said the economy is already in a recession. You can learn how to invest the simple and easy way with my brand new course, Today I Learned How to Invest. Learn everything you need to start building the massive nest egg you deserve, in just 45 minutes!
Continue Reading -->Coffee With Greta: Traders Look Ahead to Jackson Hole
DJIA Futures: -342 (-1%) SPX Futures: -52 (-1.2%) NASDAQ Futures: -202 (-1.5%) Good morning friends! Futures are dropping as traders look ahead to Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium this week. Let’s get right to it! Economy, Fed’s Jackson Hole Symposium in Focus Inflation and the Fed are back in focus this week ahead of some key economic data and a speech from Fed Chair Jerome Powell. The Commerce Department releases its second estimate of Q2 GDP on Thursday after the first showed the economy shrank 0.9% last quarter. Economists expect the revision to show a 0.5% contraction. The Bureau of Economic Analysis then releases the July PCE Price Index on Friday, which is the Fed’s preferred inflation gauge. Powell will also speak at the Jackson Hole Symposium on Friday. The market is anticipating he will sound more hawkish during that speech than he did at his press conference following the last Fed meeting. The bank is expected to continue aggressive rate hikes until they see a meaningful reduction in inflation. AMC Shares Tank on Cineworld Bankruptcy Warning AMC Entertainment (AMC) shares are plunging 37.9% ahead of the open after rival Cineworld said today it is considering filing for bankruptcy. Cineworld Group, which owns Regal Cinemas in the U.S., said, “The strategic options through which Cineworld may achieve its restructuring objectives include a possible voluntary Chapter 11 filing in the United States and associated ancillary proceedings in other jurisdictions as part of an orderly implementation process.” The company added that any filing “would be expected to allow the group to access near-term liquidity and support the orderly implementation of a fully funded deleveraging transaction.” AMC also debuted its new class of preferred shares “APE” units today. In a tweet Sunday, the CEO reminded shareholders, “the value of your AMC investment will be the combination of your AMC shares and your new APE units. An AMC share plus a new APE unit added together — compared to just an AMC share previously.” Bed Bath & Beyond Continues to Tumble Bed Bath & Beyond (BBBY) shares are tumbling 17.1% in premarket trade, after plummeting 40.5% on Friday. The recent drop comes after GameStop (GME) Chairman Ryan Cohen sold off his entire stake in the retailer. Bloomberg also reported over the weekend that some suppliers are restricting or halting shipments to Bed Bath & Beyond after the company fell behind on payments. Tesla to Hike Price of Full Self Driving Software Tesla (TSLA) shares are slipping 2.7% ahead of the open after after CEO Elon Musk announced the company will hike prices for its full self driving software. In a tweet Sunday, Musk said, “After wide release of FSD Beta 10.69.2, price of FSD will rise to $15k in North America on September 5th. Current price will be honored for orders made before Sept 5th, but delivered later.” Customers can currently pay $12,000 upfront for FSD or $199 per month on a subscription basis. Musk did not address whether the subscription price would change. Oil Prices Slump on Economic Growth Fears, Surging Dollar Oil prices are lower today on continued fears over a recession and as the dollar surges higher. West Texas Intermediate crude futures are down 0.4% to under $90.50 bbl while Brent crude futures are slipping 0.5% to $96 bbl. The U.S. dollar index popped to a five-week high today after hawkish comments from Richmond Fed President Thomas Barkin on Friday. Aggressive rate hikes from the Fed are expected to cause a slowdown in economic growth, dragging down oil demand. In Case You Missed It You can learn how to invest the simple and easy way with my brand new course, Today I Learned How to Invest. In just 45 minutes, you can go from a total beginner who knows nothing to someone who’s ready to buy their first stock. Start building the massive nest egg you deserve today!
Continue Reading -->Coffee With Greta: Traders Dump $BBBY
DJIA Futures: -262 (-0.8%) SPX Futures: -42 (-1%) NASDAQ Futures: -154 (-1.1%) Good morning friends! Futures are falling with the S&P 500 on track to snap its 4-week winning streak. Let’s get right to it! $BBBY Plunges As Ryan Cohen Sells Stake Bed Bath & Beyond (BBBY) shares are plunging -42.4% ahead of the open after activist investor and GameStop (GME) chairman Ryan Cohen sold off his stake in the company. An SEC filing shows Cohen’s venture capital firm RC Ventures dumped all of its BBBY stock on Wednesday at a range of prices between $18.68 and $29.22 per share. Those shares were originally purchased at an average of roughly $15.34 per share in March. RC Ventures also sold the call options it purchased earlier this week. GM To Reinstate Dividend, Increase Share Buyback Program General Motors (GM) shares are up 1.5% in premarket trade after the automaker announced it is reinstating its quarterly dividend. The company cut that dividend during the early days of the pandemic to preserve cash. GM’s board of directors authorized a $0.09 per share dividend, roughly 76% smaller than the $0.38 per share dividend when it was suspended in April 2020. CEO Mary Barra said progress on “key strategic initiatives has improved our visibility and strengthened confidence in our capacity to fund growth while also returning capital to shareholders.” The first dividend will be paid September 15 to all shareholders of record as of August 31. GM is also resuming its share buyback program and increasing it to $5 billion of common stock, up from $3.3 billion previously. Foot Locker Surges on Strong Earnings, CEO Transition Foot Locker (FL) shares are rallying 21% ahead of the open after beating Q2 expectations. The sneaker retailer reported adjusted earnings of $1.10 per share on $2.07 billion in revenue. That was better than analysts’ expectations for EPS of $0.80 per share and in line with revenue estimates. Foot Locker’s same-store sales fell 10.3% year over year vs analysts’ expectations for a 14.6% decline. The company cut its full-year adjusted EPS outlook to $4.25 to $4.45 down from $4.25 to $4.60. Analysts were estimating $4.42 per share. Foot Locker also announced its CEO will retire Sept 1 and will remain executive chairman until January 31, 2023. Former Ulta Beauty (ULTA) CEO Mary Dillon will become CEO effective September 1. Dillon said, “I am thrilled to be joining Foot Locker, an iconic company that possesses a strong set of values and focus on the customer experience as well as tremendous growth opportunities.” Oil Prices Drop As Recession Fears Take Over Oil prices are lower today as recession fears overpower demand concerns. West Texas Intermediate crude futures are down 1.5% to $89 bbl while Brent crude futures are down 1.8% to under $95 bbl. Both are on track for weekly losses of more than 3% Cryptocurrencies Plunge Major cryptocurrencies are plunging amid a sudden drop across the market after a recent rebound. CoinGecko shows Bitcoin is down 9% in the past 24 hours to $21,425 while Ethereum is down 8.9% to $1,699. That’s Bitcoin’s lowest level in more than three weeks after the coin recently pushed back above $25,000 for the first time in June. Analysts saw no real catalyst for the drop besides continued concerns across risk assets about the Fed’s tightening schedule. The July meeting minutes on Wednesday showed the bank won’t be finished with rate hikes until inflation shows significant signs of improvement across the board. The sudden drop in the crypto market is weighing on Coinbase (COIN) with shares down 9.4% in premarket trade. In Case You Missed It The National Association of Realtors reported existing home sales fell 5.9% in July to a seasonally adjusted annual rate of 4.81 million units. That was in line with expectations and the slowest pace of sales since November 2015. Supply remained tight with 1.31 million homes for sale at the end of July, a 3.3-month supply. Prices cooled a bit as the market slows. The median price of an existing home sold in July was $403,800, down from the record-high in June but up 10.8% year over year.
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