All posts by Greta Wall
Coffee With Greta: Bear Market Bounce Time?
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: +134 (+0.4%) SPX Futures: +23 (+0.6%) NASDAQ Futures: +103 (+0.9%) Good morning friends! Futures are bouncing a day after the S&P 500 notched a new low for the year and closed in an official bear market. Let’s get right to it! Wholesale Inflation Surges Producer-side inflation pressures surged in May. The Bureau of Labor Statistics producer price index jumped 0.8% monthly and 10.8% year-over-year. The monthly gain was in-line with economists’ expectations and was a doubling of 0.4% in April. The core PPI, which excludes food, energy, and trade, rose 0.5% monthly and 6.8% annually. That was slightly lower than the 0.6% estimate but an increase from 0.5% in April. The PPI is a forward looking indicator for the CPI, as producers pass-down higher costs to consumers. Economists Expect Larger Rate Hike Economists are hiking their expectations for this week’s Fed meeting. Goldman Sachs economists said Monday they were officially altering their expectations to a 0.75% hike instead of just 0.5%. This comes after the Wall Street Journal reported on Monday the Fed is likely to consider that larger move. Before Fed officials entered their pre-meeting quiet period on June 4, they signaled plans to stick to a 0.5% hike. But they also said that depended on the evolving inflation situation. Since then both the May CPI and PPI came in hotter-than-expected. In an interview last month, Fed Chair Jerome Powell said, “What we need to see is clear and convincing evidence that inflation pressures are abating and inflation is coming down. And if we don’t see that, then we’ll have to consider moving more aggressively.” CME Group’s FedWatch Tool shows 94.8% of traders now expect a 0.75% rate hike while just 5.2% are anticipating a 0.5% hike. The Fed meeting kicks off today, the rate hike decision will be released at 2:00 p.m. ET on Wednesday, followed by Fed Chair Jerome Powell’s press conference at 2:30 p.m. ET. Bitcoin Tumbles to $22,000 Cryptocurrencies are falling further today as traders continue to dump risk assets. Bitcoin is down another 8.6% in the past 24 hours, trading just above $22,000. The coin briefly dropped below $21,000 earlier in the morning. Ethereum is down 6.4% at under $1,200. The global crypto market cap is down to $967 billion, under $1 trillion for the first time since February 2021. Coinbase Lays Off 18% of Workforce Coinbase (COIN) shares are tumbling 6.2% in premarket trade after the company announced it will layoff 18% of its workforce. The crypto exchange sent an email to employees this morning about those cuts. Coinbase has about 5,000 full-time workers, which means around 1,100 people will be let go. In the email, CEO Brian Armstrong said in the email, “We appear to be entering a recession after a 10+ year economic boom. A recession could lead to another crypto winter, and could last for an extended period.” He added, “Our employee costs are too high to effectively manage this uncertain market. While we tried our best to get this just right, in this case it is now clear to me that we over-hired.” Oracle Rallies on Strong Earnings Oracle (ORCL) shares are rallying 12.9% ahead of the open after beating fiscal Q4 expectations. The company reported adjusted earnings of $1.54 per share on $11.8 billion in revenue. That was better than analysts’ expectations for adjusted EPS of $1.37 on $11.61 billion in revenue. Oracle brought in $7.61 billion in cloud services and license support revenue vs analysts’ estimates of $7.83 billion. The company’s CEO said, “We experienced a major increase in demand in our infrastructure cloud business —which grew 39% in constant currency.” The company forecast fiscal Q1 earnings between $1.09 and $1.13 per share vs analysts’ expectations for $1.13. Gas Prices Continue Record-Breaking Climb U.S. gas prices are pushing further above $5 after surpassing that milestone over the weekend. AAA shows the national average for regular gas rose to $5.016/gal today. Diesel prices are also at a fresh record-high after cooling in recent weeks. The national average for diesel jumped to $5.775/gal today. Supply Concerns Boost Oil Prices Oil prices are rising today as supply concerns outweigh worries about the latest Covid outbreak in China and recession fears in the U.S. West Texas Intermediate crude futures are up 0.9% at $122 bbl while Brent crude futures are up 0.9% at over $123 bbl. Already tight supply has been worsened by a drop in exports from Libya. And other OPEC+ countries are struggling to meet their production quotas. The American Petroleum Institute releases its weekly report on U.S. inventories later today. In Case You Missed It U.S. consumers hiked their short-term inflation expectations in May. The New York Fed’s survey of consumer expectations shows Americans expect inflation to still be at 6.6% 1-year from now. That was up from the April forecast for 6.3%. 3-year inflation expectations were unchanged at 3.9%.
Continue Reading -->Coffee With Greta: S&P Slides to Bear Market Territory
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: -560 (-1.8%) SPX Futures: -87 (-2.2%) NASDAQ Futures: -331 (-2.8%) Good morning friends! Futures are falling as Fed week begins and Treasury yields jump. Let’s get right to it! S&P Set To Open In Bear Market The major indexes are set to open lower, with the S&P 500 poised to open in bear market territory. The bluechip index closed 19% off from its record high on Friday and is slipping more than 2% in premarket trade. Traders are focused on the Fed and how aggressive the bank will act on inflation after the 8.6% CPI on Friday. The Central Bank kicks off its two-day policy meeting on Tuesday. Treasury Yield Curve Briefly Inverts Treasury yields are rising as the market bets on an aggressive Fed. The 2-year yield briefly jumped 0.02 basis points above the 10-year yield earlier this morning. The 2-year yield is now up about 10 basis points at 3.17% while the 10-year yield is 8 basis points higher at 3.25% The Fed is widely expected to implement another 0.5% rate hike on Wednesday. CME Group’s FedWatch Tool shows 58.8% of traders expect a 0.5% rate hike while 41.2% are now predicting a 0.75% hike. Coinbase Plummets As Crypto Collapses Coinbase (COIN) shares are plunging 17% ahead of the open after a weekend of turmoil in the crypto market. CoinGecko shows Bitcoin is down more than 12% over the past 24 hours at just over $24,000. The coin is trading at its lowest level since December 2020. Ethereum has dropped more than 15% to just $1,200. And Dogecoin is down more than 16% at $0.055. The global crypto market cap is down nearly 11% in the past 24 hours to $1.03 trillion. More than $200 billion has been wiped off the entire crypto market since Friday. Tesla Files For 3-for-1 Stock Split Tesla (TSLA) shares are slipping 4.4% in premarket trade as the electric automaker follows the broader market lower. The company proposed a 3-for-1 stock split in a proxy statement filed with the SEC on Friday. The stock initially jumped 8% in after-hours trade following the filing Friday but failed to hold those gains ahead of the open today. The split hinges on shareholder approval to increase Tesla’s total number of shares by 4,000,000,000. That is set to be voted on at the August 4 shareholder meeting. Average U.S. Gas Price Tops $5 The national average for a gallon of regular gas is officially over $5. AAA shows that price rose to a new record high at $5.014/gal today. It’s the first time in history the national average has been over $5. Georgia still has the lowest average price at $4.484/gal while the average in California is up to $6.436/gal. Oil Prices Slip On Beijing Covid Warning, Inflation Worries Oil prices are sliding amid concerns about a Covid flareup in Beijing. West Texas Intermediate crude futures are down 1.3% at $119 bbl while Brent crude prices are falling 1.2% to under $121 bbl. The most populous district in Beijing announced it will undergo three rounds of mass testing until Wednesday amid a new Covid outbreak in the city. The energy market is also worried about the possibility of a recession if the Fed gets more aggressive on inflation. NY Fed Inflation Expectations Coming Up The New York Fed releases its May survey of consumer expectations at 11:00 a.m. ET. Those results include forecasts for inflation 1-year and 3-years from now. The University of Michigan’s June consumer sentiment index last week showed consumers hiked their expectations for inflation over the next 12 months.
Continue Reading -->Coffee With Greta: Inflation Is Still Hot, Hot, Hot
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: -427 (-1.3%) SPX Futures: -60 (-1.5%) NASDAQ Futures: -213 (-1.7%) Good morning friends! Futures are falling after a hotter-than-expected inflation report. Let’s get right to it! Inflation Surges Higher U.S. inflation pressures surged more than expected in May. The Bureau of Labor Statistics consumer price index jumped 1% monthly and skyrocketed 8.6% annually. That’s the highest pace of annual inflation since 1981. It was also an increase from 8.3% inflation in April and higher than analysts’ expectations for that to be unchanged. The increase was led by soaring rent, food, and gas prices. Grocery prices jumped 11.9% annually, gas prices were up 50.3%, and shelter prices rose 5.5%. The CPI also shows oil prices surged 106.7% from a year ago. The core CPI, which excludes food and energy prices, rose 0.6% monthly and 6% annually. That was also higher than analysts’ expectations but a slight cooldown from 6.2% annual inflation in April. Short-term Treasury Yields Surge After CPI Short-term Treasury yields are rallying after the release of that hot inflation data. The 2-year yield is up 12 basis points to 2.92%, the highest level since 2018. Short-term yields are more sensitive to the Fed’s rate hikes. The 10-year yield is flat at 3.06%. Stitch Fix Drops On Widening Loss, Layoff Announcement Stitch Fix (SFIX) shares are tumbling 15.8% ahead of the open after the company announced wider losses in Q3 and layoffs. The online personal styling service reported a loss of $0.72 per share on $492.9 million in revenue. That was steeper than the $0.18 per share loss on $535.6 million in revenue a year ago. Stitch Fix forecast Q4 revenue between $485 million and $495 million. That would be lower than $571.2 million last year. The disappointing quarterly results come after CEO Elizabeth Spaulding announced Stitch Fix is laying off 15% of its salaried employees in a memo on Thursday. Roughly 330 employees were notified of layoffs, representing about 4% of the company’s total workforce. Spaulding said, “We’ve taken a renewed look at our business and what is required to build our future. While this was an incredibly difficult decision, it was one needed to make to position ourselves for profitable growth.” Stitch Fix said it “expects annual cost savings of $40 million to $60 million in fiscal year 2023,” as a result of the layoffs. Rent the Runway Rallies On Q1 Sales Beat Rent the Runway (RENT) shares are rising 7.4% in premarket trade after beating its own Q1 forecast. The clothing rental service reported a Q1 loss of $0.67 per share on $67.1 million in revenue. That topped the company’s forecast for revenue between $63.5 million and $64.5 million. It was also an improvement from the $3.75 per share loss on $33.5 million in revenue a year ago. Rent the Runway forecast Q2 revenue between $72 million to $74 million. DocuSign Plummets On Q1 Miss DocuSign (DOCU) shares are plunging 25.4% ahead of the open after missing Q1 expectations. The electronic-documents company reported adjusted earnings of $0.38 per share on $588.7 million. That missed analysts’ expectations for adjusted EPS of $0.46 but beat estimates for $583 million in revenue. The CEO announced DocuSign is moderating its hiring plan “to appropriately balance growth and profitability.” The company forecast Q2 revenue between $600 million and $604 million vs analysts’ expectations for $601 million. DocuSign expects full-year revenue between $2.47 billion and $2.48 billion vs analysts’ estimates for $2.479 billion. Average U.S. Gas Price Still Approaching $5 The national average for a gallon of regular gas is still inching closer to $5. AAA shows that price rose to $4.986/gal today. That’s up more than 60 cents from a month ago and more than $1.91 from a year ago. Gas price tracking site GasBuddy.com showed the national average spiked above $5 on Thursday. Oil Prices Hover Around 3-Month Highs Oil prices are still hovering around 3-month highs as the market weighs new Covid restrictions in Shanghai and Beijing. West Texas Intermediate crude futures are up 0.7% at over $122 bbl while Brent crude futures are up 0.6% at nearly $124 bbl. WTI is on track for its seventh straight weekly gain and Brent is set to rise for the 4th week in a row. Consumer Sentiment Expected To Bounce The University of Michigan releases the preliminary reading of its June consumer sentiment index at 10:00 a.m. ET. That survey is expected to improve to 59 from 58.4 at the end of May. The index also includes consumer expectations for inflation over the next 12-months and 5-years. In Case You Missed It CNBC’s Q2 CFO Council Survey shows American CFOs are worried about inflation and a recession. 40% of respondents cited inflation as the #1 external risk to their business. 100% said they expect a recession, with 68% expecting one in the first half of 2023. 77% expect the DJIA to fall below 30,000. Freddie Mac reported Thursday its average 30-year mortgage rate rose to 5.23% last week. That was up 14 basis points from the prior week. The average 15-year rate rose 6 basis points to 4.38%. The chief economist at Freddie Mac said, “The housing market is incredibly rate-sensitive, so as mortgage rates increase suddenly, demand again is pulling back.”
Continue Reading -->Coffee With Greta: Stocks Are Falling Because Yields Are Popping
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: -55 (-0.2%) SPX Futures: -10 (-0.3%) NASDAQ Futures: -49 (-0.4%) Good morning friends! Futures are slipping as Treasury yields pop. Let’s get right to it! Treasury Yields Jump On ECB Rate Hike Announcement U.S. Treasury yields are rising this morning, pushing down stocks. The 10-year yield is up about 5 basis points at 3.07% while the 30-year yield is up nearly 3 basis points to over 3.2%. The gains come after the European Central Bank announced today it will officially end quantitative easing and implement the first rate hike next month. European Central Bank To Start Rate Hikes The European Central Bank plans to raise rates by 25 basis points at its July meeting. The bank said it then expects another hike at its September meeting, but the size depends on the evolving outlook. In a statement, the ECB said, “Beyond September, based on its current assessment, the Governing Council anticipates that a gradual but sustained path of further increases in interest rates will be appropriate.” Like the U.S. Federal Reserve, the ECB has a target of 2% for inflation. But Euro-zone inflation hit a record high of 8.1% in May. The ECB also downgraded its growth forecast and raised inflation projections. The bank expects the economy to expand 2.8% in 2022 and 2.1% in 2023 and 2024. That’s a sharp downgrade from the previous forecast for growth of 3.7% in 2022 and 2.8% in 2023. The ECB expects inflation to remain at 6.8% by the end of 2022, 3.5% in 2023, and 2.1% in 2024. That compares to its previous outlook for 5.1% in 2022, 2.1% in 2023, and 1.9% in 2024. Weekly Jobless Claims Rise More Than Expected Weekly jobless claims rose more than expected last week. The Labor Department reported today that 229,000 Americans filed initial claims for unemployment benefits. That was an increase of 27,000 from the previous week and higher than expectations for 210,000. That’s the highest level of weekly jobless claims since January 15. Continuing claims fell by just 3,000 to 1.31 million in the week ending May 28, higher than expectations for 1.30 million. Nio Tumbles On Shrinking Margins Nio (NIO) shares are tumbling 7.3% ahead of the open despite beating Q1 expectations. The Chinese electric vehicle maker reported an adjusted loss of $0.13 per share on $1.56 billion in revenue. That was better than analysts’ expectations for an adjusted loss of $0.14 per share on $1.49 billion in revenue. But the stock is dropping on lower margins. Nio’s Q1 profit margins declined to 14.6% compared to 19.5% a yaer ago. The company blamed that drop on a “decrease of vehicle margin and the reduction in other sales margin resulting from the expanded investment in power and service network.” The EV maker said it delivered 25,768 vehicles in the quarter, in line with expectations. Nio forecast Q2 revenue between $1.47 billion and $1.59 billion, missing expectations. The company expects to deliver 23,000 to 25,000 vehicles this quarter. U.S. Gas Prices Inch Closer To $5 The national average for a gallon of regular gas pushed closer to $5 overnight. AAA shows that price rose to $4.970/gal today. That’s up nearly 2 cents from just yesterday and more than 25 cents from a week ago. Prices have been surging after the U.S. officially entered “peak driving season” over Memorial Day weekend. The national average is on track to hit $5/gal for the first time in history this week. Oil Prices Near 3-Month High Oil prices are hovering near three-month highs after closing at the highest level since March 8 on Wednesday. West Texas Intermediate crude futures are up 0.02% at $122 bbl while Brent crude futures are up 0.1% at nearly $124 bbl. The Energy Information Administration reported Wednesday that U.S. crude inventories fell by 2 million barrels last week while gas stockpiles fell by 800,000 barrels. That was a smaller drop in oil inventories than expected but sharply missed expectations for gasoline inventories to rise. In Case You Missed It Twitter (TWTR) shares rose on Wednesday following a report that the company plans to share internal data with Elon Musk. The Washington Post first reported that Twitter is preparing to give Musk access to its so-called “firehose” API. That data set includes every single tweet posted on the platform. Top executives also told employees Wednesday that Twitter plans to hold a shareholder vote on the Musk buyout by early August. TWTR closed 0.8% higher Wednesday but is down 0.5% ahead of the open. Moderna (MRNA) shares rose 2.2% on Wednesday after the company released clinical trial results for its updated Covid booster shot. The new shot is a “bivalent” vaccine, meaning one half targets omicron variants while the other half is still based on the original Covid strain. Moderna said the 437 people treated with the new booster in its Phase 2 clinical trial had almost twice the amount of antibodies against omicron than those treated with the current booster.
Continue Reading -->Coffee With Greta: Another Profit Warning Drags Down Stocks
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: -153 (-0.5%) SPX Futures: -18 (-0.4%) NASDAQ Futures: -52 (-0.4%) Good morning friends! Futures are slipping amid economic growth concerns after another big profit warning. Let’s get right to it! Credit Suisse Slips On Profit Warning Credit Suisse (CS) shares are falling 7.1% in premarket trade after the company issued a Q2 profit warning. In a new trading update, Credit Suisse said it will likely report a loss in the current quarter. The Swiss lender cited the war in Ukraine, Central Bank tightening, and the end of Covid stimulus as reasons for that downgraded forecast. Credit Suisse said 2022 as a whole will remain a year of “transition” and it will accelerate cost-cutting measures “with the aim of maximizing savings from 2023 onwards”. Fed GDP Tracker Shows Economy Inching Toward Recession The Atlanta Fed’s GDPNow tracker now shows the U.S. economy expanding just 0.9% in Q2. That’s down from expectations for 1.3% growth a week ago. The revised outlook comes after the release of weak economic data in recent weeks. Consumer spending is now expected to rise 3.7% vs the previous 4.4% estimate. And real gross private domestic investment (GPDI) is expected to shave 8.5% off overall GDP growth, higher than the previous estimate for an 8.3% hit. GPDI is a measure of how much domestic businesses are investing in the economy. The GDPNow tracker is updated in real-time based on the most recent data. The U.S. economy contracted 1.5% in Q1 as the trade deficit soared to a record-high. That gap declined by more than $20 billion in April. The trade deficit is now expected to shave off 0.13% in GDP growth this quarter down from the previous estimate of -0.25%. The official definition of a recession is two straight quarters of negative economic growth. Campbell Soup Rises On Earnings Beat Campbell Soup (CPB) shares are up 2.8% ahead of the open after beating fiscal Q3 expectations. The food company reported adjusted earnings of $0.70 per share on $2.13 billion in revenue. That was better than analysts’ expectations for adjusted EPS of $0.61 on $2.042 billion in revenue. Campbell’s CEO said, “Our improved supply chain execution along with inflation-driven pricing began to mitigate the margin pressure we have experienced over the last 12 months.” The company expects full-year sales growth up to 1% vs its previous forecast for sales to fall up to 2%. That beat analysts’ estimates for full-year sales of $8.411 billion which would be a 0.8% decline. Roku Rallies On Rumored Netflix Acquisition Discussions Roku (ROKU) shares are rising 5.2% in premarket trade following a Business Insider report that the company’s employees are discussing the possibility of being acquired by Netflix (NFLX). Management is reportedly aware of those discussions and abruptly closed the trading window for all employees in response. That prevents employees from selling any of their vested ROKU stock. ROKU shares are down more than 70% over the past year while NFLX shares have tumbled nearly 60%. Spirit Extends Talks with Frontier, JetBlue Spirit Airlines (SAVE) shares are slipping 0.7% ahead of the open after the company postponed its shareholder meeting to continue talks with Frontier Group (ULCC) and JetBlue (JBLU). The company pushed that meeting from this Friday to June 30. Shareholders were originally set to vote on the cash-and-stock Frontier merger this week. But JetBlue sweetened its takeover offer earlier this week, offering $31.50 per share and a higher breakup fee if the deal is blocked by regulators. Mortgage Demand Tumbles To 22-Year Low Mortgage demand has tumbled to the lowest level in 22 years as rates rise and supply remains low. The Mortgage Bankers Association reported total application volume fell 6.5% last week. Purchase applications were down 7% weekly and 21% year-over-year. While refinance applications fell 6% weekly and tumbled 75% compared to a year ago. The average 30-year contract rate rose to 5.40% from 5.33%. New data from Mortgage News Daily shows those rates have moved even higher this week. Oil Prices Rise Oil prices are rising today as the market expects higher demand from China and as Norwegian oil workers prepare to strike. West Texas Intermediate crude futures are up 0.9% to over $120 bbl while Brent crude futures are rising 0.9% to over $121 bbl. Some crude output is at risk of being shutdown as Norwegian oil workers plan to strike over pay starting on June 12. The American Petroleum Institute reported Tuesday that U.S. crude inventories rose by 1.8 million barrels last week, while gas inventories also rose by 1.8 million barrels. The Energy Information Administration releases official stock levels at 10:30 a.m. ET. Goldman Sachs raised its outlook for oil prices over the next 12 to 18 months. The bank now expects Brent crude prices to rise to $140 a barrel as early as this summer. But the group says Americans will feel more pain as limited refinery capacity will push gas prices even higher than usual. U.S. Gas Prices Surge Again The national average for a gallon of regular gas jumped sharply again overnight. AAA shows that price rose to $4.955/gal today. That’s up nearly 4 cents from just yesterday and nearly 30 cents from a week ago. At the current pace of gains, the national average is on track to top $5/gal this week. Uranium Stocks Pop Uranium stocks are rising ahead of the open after rallying on Tuesday. The Global X Uranium ETF (URA) is up 1.9% in premarket trade after closing 6% higher on Tuesday. The rally comes amid news the Biden Administration is looking to reduce U.S. reliance on foreign uranium, specifically from Russia. The White House has reportedly asked Congress to fund a $4.3 billion plan to buy enriched uranium from domestic suppliers. Novavax Jumps on FDA Panel Vote For Covid Vaccine Novavax (NVAX) shares are up 8.6% in premarket
Continue Reading -->Coffee With Greta: Stocks Slide After Target’s Profit Warning
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: -252 (-0.8%) SPX Futures: -37 (-0.9%) NASDAQ Futures: -156 (-1.2%) Good morning friends! Futures are falling after a profit warning from Target. Let’s get right to it! Target Slides On Profit Warning Target (TGT) shares are sliding 7.2% ahead of the open after slashing its fiscal Q2 profit margin expectations. The retailer said it will be lower prices and cancel orders in an effort to reduce excess inventory. Target said it had over $15 billion of inventory at the end of fiscal Q1, up 43% year-over-year. CEO Brian Cornell told CNBC, “We thought it was prudent for us to be decisive, act quickly, get out in front of this, address and optimize our inventory in the second quarter — take those actions necessary to remove the excess inventory and set ourselves up to continue to be guest relevant with our assortment.” Target now expects its operating margin rate this quarter to be around 2%. The retailer previously forecast its margin rate would be relatively unchanged from Q1 at 5.3%. The company said it expects profit margins to rise to around 6% in the second half of the year. Kohl’s Surges On Takeover Talks Kohl’s (KSS) shares are surging 11.9% in premarket trade after the company announced it has entered exclusive takeover talks with Franchise Group (FRG). Franchise Group has offered to buy the department store chain at $60 per share, valuing the company at $8 billion. The companies said late Monday they have entered a three-week exclusivity period to discuss that bid. The deal is subject to approval by both company boards. Trade Deficit Tumbles From Record The U.S. trade deficit fell sharply in April. The Commerce Department reported that gap shrank 19% to $87.1 billion. That was better than economists’ expectations for $89.4 billion. The drop came as exports rebounded and imports fell. Exports rose 3.5% to $252.6 billion while imports fell 3.4% to $339.7 billion. Oil Prices Stabilize Oil prices are flat today as the market weighs supply concerns against increased demand expectations from China. West Texas Intermediate crude futures are down 0.3% at $118 bbl while Brent crude futures are slipping 0.4% to $119 bbl. Analysts expect the drop in prices to be short-lived as Beijing and Shanghai, China return to normal after two months of Covid lockdowns. The market is also doubtful that OPEC’s agreement to increase production faster will actually alleviate tight supply. U.S. Gas Prices Surge To Fresh Record The national average for a gallon of regular gas jumped sharply again overnight. AAA shows that price rose to $4.919/gal today. That’s up more than 5 cents from just yesterday and nearly 30 cents from a week ago. The national average is on track to hit $5/gal for the first time ever soon. 13 states already have an average price over $5: Alaska, Arizona, California, Hawaii, Indiana, Illinois, Maine, Massachusetts, Michigan, Nevada, New Jersey, Oregon, and Washington. Peloton’s CFO Steps Down Peloton (PTON) shares are flat in premarket trade after a new SEC filing revealed the company’s CFO is leaving. Jill Woodworth will be replaced by current Amazon Web Services executive Liz Coddington, effect next week. CEO Barry McCarthy said, “Having worked at some of the strongest and most recognizable technology brands, [Liz] not only brings the expertise needed to run our finance organization, but she has a critical understanding of what it takes to drive growth and operational excellence.” Apple Unveils New Products Apple (AAPL) shares are down 1.4% ahead of the open after the tech giant hosted its annual Worldwide Developers Conference on Monday. Here’s everything Apple unveiled at the event: New iPhone software, iOS 16 New iPad software, iPadOS 16 New Mac software, macOS Ventura New Apple Watch software, watchOS 9 A new Apple M2 computer chip A new MacBook Air with the M2 chip A new 13-inch MacBook Pro with the M2 chip Check out this article from CNBC for details on all the new software and devices that were announced. In Case You Missed It Amazon (AMZN) rallied 2% on Monday after implementing a 20-for-1 stock split. The online retail giant closed at $124.79 per share after closing at a split-adjusted price of $122.35 on Friday. Amazon is hoping the split will make the stock more accessible to smaller traders and investors. AMZN shares are down 2.3% ahead of the open. Twitter (TWTR) shares dropped 1.5% on Monday as Elon Musk signaled his takeover deal is still in danger. In a letter, Musk accused Twitter of “resisting and thwarting” his right to information about fake users, calling it a “clear material breach” of the terms of the merger agreement. The letter said, “Mr. Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement”. TWTR shares are falling 1% in premarket trade.
Continue Reading -->Coffee With Greta: Amazon Stock Split Takes Effect
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: +282 (+0.9%) SPX Futures: +47 (+1.2%) NASDAQ Futures: +196 (+1.6%) Good morning friends! Futures are higher as traders look to bounce back from a losing week. Let’s get right to it! Amazon’s Stock Split Takes Effect Amazon (AMZN) shares are up 2% ahead of the open, as the company’s first stock split in 23 years takes effect. The stock is trading around $125 after the 20-for-1 split went into effect after the close on Friday. It’s the first time the share price has been in triple-digits since October 2017. Amazon announced plans for the split in an SEC filing on March 9. A company spokesperson said, “This split would give our employees more flexibility in how they manage their equity in Amazon and make the share price more accessible for people looking to invest in the company.” Oil Jumps to $120 a Barrel Oil prices are rising today after Saudi Arabia hiked its crude prices for July. West Texas Intermediate crude and Brent crude futures are both up about 0.2% and hovering right around $120 bbl. WTI hit a three-month high of $120.99 earlier this morning while Brent topped out at $121.95. Saudi Arabia hiked the official selling price for its Arab light crude to Asia to $6.50 for July, up by $2.10 from June. That’s the highest price since May. Gas Price Record The national average for a gallon of regular gas jumped sharply over the weekend. AAA shows that price rose to $4.865 today. That’s up more than 10 cents from just Friday. A week ago the national average was $4.619/gal and it was $4.279/gal a month ago. Georgia is still the state with the lowest average price at $4.292/gal. The highest state average is in California which rose more than 3 cents overnight to $6.341/gal. Inflation Week It’s a relatively light week of economic data with traders focused on inflation. The Bureau of Labor Statistics releases the May Consumer Price Index on Friday morning. The market will be eyeing that report for more evidence that inflation has already peaked. The headline CPI is expected to have risen 8.2% year over year with the Core CPI at 5.9%. Both forecasts are a slowdown from April. JetBlue Sweetens Spirit Takeover Offer Spirit Airlines (SAVE) shares are rising 6% in premarket trade after JetBlue Airways (JBLU) sweetened its offer to buy the discount airline. JBLU shares are up 1.4% ahead of the open. JetBlue is now offering $31.50 per share in cash, up from its previous offer of $30 per share. The improved offer includes $30 per share at the close of the deal and $1.50 paid as a cash dividend if shareholders vote for the JetBlue deal. JetBlue also raised the reverse break-up fee to $350 million from $200 million. That would be paid to shareholders if they approve the deal but it falls through due to regulatory reasons. Spirit previously declined JetBlue’s offer, expressing doubt it would receive regulatory approval. The company is also still in talks to merge with Frontier Group (ULCC). DiDi Surges On Report Regulators Are Ending Investigations DiDi Global (DIDI) shares are surging 66.5% ahead of the open after the Wall Street Journal reported that Chinese regulators are ending their investigations into the Chinese ride-hailing company. Authorities are also reportedly planning to lift a ban on new users and will allow the Didi mobile apps back on domestic app stores. Sources told the Wall Street Journal those changes could happen as early as this week. Solar Companies Jump On White House Tariff Plan Shares of solar equipment providers are rising in premarket trade after Reuters reported the White House is planning to announce a tariff exemption for solar panels. President Biden is expected to declare a 24-month long exemption for solar panels from Cambodia, Malaysia, Thailand, and Vietnam today. The move is meant to spur more solar panel production in the U.S. SunRun (RUN) shares are up 13.9% ahead of the open, while SunPower (SPWR) is gaining 9.4%, and SolarEdge Technologies (SEDG) is up 6.3%. Under Armour Replaced by Keurig Dr Pepper, ON Semiconductor on S&P 500 Under Armour (UAA) shares are flat after the athletic apparel company was removed from the S&P 500. The stock was replaced by Keurig Dr Pepper (KDP) and ON Semiconductor (ON). KDP shares are up 6.6% in premarket trade while ON shares are rising 6%. VICI Properties (VICI) shares are also up 6.7% ahead of the open after the real estate investment trust was also added to the S&P 500. In Case You Missed It Apple (AAPL) suffered a death cross on Friday. The stock’s 50-day moving average dropped to $159.09 while the 200-day moving average rose to $159.49. It was the first death cross for the tech giant since December 20, 2018. AAPL shares are 1.3% ahead of the open.
Continue Reading -->Coffee With Greta: Stocks Drop, Yields Spike On Strong Jobs Report
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: -213 (-0.6%) SPX Futures: -41 (-1%) NASDAQ Futures: -197 (-1.5%) Good morning friends! Futures are slipping as Treasury yields pop on a stronger-than-expected May jobs report. Let’s get right to it! Hiring Was Still Strong in May The Labor Department’s official May jobs report beat expectations. That data was just released, showing the U.S. economy added 390,000 jobs last month. That was better than expectations for a gain of 328,000. But it was still the smallest increase in 13 months and broke the 12 month streak of 400,000 or more, as the labor market nears full employment levels. The unemployment rate held steady at 3.6% vs expectations for a decrease to 3.5%. The labor force participation rate stood at 62.3% in May, still 1.1% lower compared to February 2020. Average hourly earnings rose 0.3% from April and jumped 5.2% year-over-year. Although strong, those wage gains are still lagging behind inflation. The leisure and hospitality sector continued to lead job gains in May, adding 87,000 workers. That sector is still down 1.3 million employees from pre-pandemic levels. Treasury Yields Pop After Strong Jobs Report Treasury yields are rising following the release of that strong jobs data. The 10-year yield is up about 7 basis points to over 2.97% with the 30-year yield rising 7 basis points as well to over 3.15%. The strong jobs data gives more support to the Fed’s plans to move ahead aggressively with larger rate hikes. Tesla Slides After Elon Musk Orders Hiring Freeze, Job Cuts Tesla (TSLA) shares are down 4.4% following reports he has ordered a hiring freeze at the company. Reuters reported Musk sent an email to executives on Thursday which was titled “pause all hiring worldwide”. In that message, Musk reportedly said he has a “super bad feeling” about the economy and they need to cut about 10% of jobs. Tesla’s annual SEC filing showed it had nearly 100,000 employees at the end of 2021. Coinbase Extends Hiring Pause Coinbase (COIN) shares are falling 4.1% ahead of the open after the company announced it will extend a hiring pause for the “foreseeable future”. In a blog post, the company also said it would rescind some already accepted job offers. Coinbase said it will help those impacted by that move with job placement and resume reviews. The company’s chief people officer said, “If we’re flexible and resilient, and remain focused on the long term, Coinbase will come out stronger on the other side.” Lululemon Rises On Earnings Beat Lululemon (LULU) shares are up 1.1% ahead of the open after beating fiscal Q1 expectations. The athletic apparel retailer reported earnings of $1.48 per share on $1.61 billion in revenue. That topped analysts’ expectations for EPS of $1.43 on $1.53 billion in revenue. Revenue rose 32% year-over-year and the company hiked its guidance. Lululemon expects fiscal Q2 revenue between $1.75 billion and $1.78 billion vs analysts’ expectations for $1.71 billion. The company forecast full-year revenue between $7.61 billion and $7.71 billion, up from its prior forecast for $7.49 billion to $7.62 billion. Analysts were expecting $7.54 billion in full-year sales. Apple’s Impending Death Cross Apple (AAPL) is poised to see an ominous pattern on its stock chart. The stock’s 50-day moving average is on track to drop below its 200-day moving average, in a move known as a “death cross”. Apple’s last death cross appeared on December 20, 2018. The 50-DMA has declined by an average of $0.30 over the past 20 sessions and fell to $159.573 on Thursday while the 200-DMA rose to $159.489. At that pace, the death cross is expected to happen today. AAPL shares are down 1.9% in premarket trade. Oil Prices Slip Oil prices are rising modestly amid tight supply concerns. West Texas Intermediate crude futures are up 0.3% to over $117 bbl while Brent crude futures are up 0.4% to over $118 bbl. Opec+ agreed on Thursday to increase its oil output faster. The group will increase production by 638,000 barrels per day in July and August. That’s ramped up from the 432,000 bpd increases over the past few months. The Energy Information Administration also reported a steep drop in U.S. inventories on Thursday. The EIA says crude stockpiles tumbled by 5.1 million barrels last week while gasoline inventories dropped by 700,000 barrels. Analysts were expecting a 500,000 barrel drop in oil supplies and 100,000 barrel decrease in gas stockpiles. U.S. Gas Prices Surge to Fresh Record The national average for a gallon of regular gas jumped sharply again overnight. AAA shows that price jumped to $4.761/gal today. That was an increase of nearly 5 cents from yesterday. It’s the third day in a row prices have jumped by more than 4 cents overnight. The state with the lowest average price currently is still Georgia, at $4.221/gal. The highest state average is in California which rose more than 3 cents overnight to $6.246/gal. In Case You Missed It Microsoft (MSFT) slashed its fiscal Q4 outlook Thursday citing “unfavorable” foreign exchange rates. The company lowered guidance for both sales and profit to ranges below analysts’ estimates. The stock initially fell on that news but then rallied into the close. MSFT shares are down 1.4% ahead of the open. Cloud stocks led the rally in tech stocks on Thursday. UiPath (PATH) shares surged 17% after reporting a narrower-than-expected Q1 loss and hiking its full-year guidance. Elastic (ESTC) and Datadog (DDOG) shares also jumped sharply, closing 19% and 13% higher respectively.
Continue Reading -->Coffee With Greta: The Labor Market Is Almost Full
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: +119 (+0.4%) SPX Futures: +17 (+0.4%) NASDAQ Futures: +59 (+0.5%) Good morning friends! Futures are rebounding as the market digests fresh jobs data that shows the labor market nearing full employment. Let’s get right to it! Private Job Growth Tumbles In May Private payrolls increased less than expected in May, as the U.S. labor market nears full employment. Payroll firm ADP reported today that private employers added 128,000 workers last month. That was lower than economists’ expectations for a gain of 299,000. April was also revised lower to 202,000 from 247,000. May was the slowest pace of job growth since the beginning of the pandemic. Small businesses actually lost 91,000 employees in May while businesses with 500 or more employees added 122,000 and mid-size businesses added 97,000. The leisure and hospitality sector no longer led job gains last month, adding just 17,000 workers. The Labor Department releases the official May jobs report on Friday. That’s expected to show the U.S. economy added 328,000 jobs last month with the unemployment rate slipping to 3.5%. Weekly Jobless Claims Fall Weekly jobless claims fell more than expected last week. The Labor Department reported 200,000 Americans filed initial claims for unemployment benefits. That was down 11,000 from the previous week and lower than expectations for 210,000. The data indicates the labor market is in a strong position, with layoffs hovering around record lows. Continuing claims fell by 34,000 to 1.31 million in the week ending May 21. Gamestop Slips On Steep Q1 Loss Gamestop (GME) shares are down 0.2% ahead of the open after missing Q1 expectations. The video game retailer reported a loss of $2.08 per share on $1.38 billion in revenue. That was worse than analysts’ expectations for a loss of $1.45 per share but beat revenue estimates of $1.34 billion. It was also a steeper loss than $1.01 per share a year ago. GameStop said its inventories jumped to $918 million at the end of Q1, up from $571 million at the end of Q1 2021. That increased inventory is part of an effort “to meet increased customer demand and offset supply-chain headwinds.” The company ended the quarter with $1.035 billion in cash on hand. Chewy Rallies On Surprise Q1 Profit Chewy Inc (CHWY) shares are jumping 16% in premarket trade after reporting a surprise profit in the first quarter. The online pet-products retailer reported earnings of $0.04 per share on $2.43 billion in revenue. That crushed analysts’ expectations for a loss of $0.11 per share on $2.41 billion in revenue. Chewy warned, “inflationary pressures and supply-chain disruptions are expected to persist and the consumer’s post-pandemic behavior continues to evolve.” The company forecast Q2 revenue between $2.43 billion and $2.46 billion and full-year revenue between $10.2 billion and $10.4 billion. Both were in line with analysts’ expectations. Hewlett Packard Drops On Earnings Miss Hewlett Packard (HPE) shares are down 4% ahead of the open after missing fiscal Q2 expectations. The company reported adjusted earnings of $0.44 per share on $6.7 billion in revenue. That was shy of analysts’ expectations for adjusted EPS of $0.45 on $6.8 billion in revenue. Hewlett Packard’s CFO said, “We are particularly pleased with the resiliency of our gross margins (34%) despite the inflationary environment and ongoing supply-chain disruptions”. The company did incur a $126 million charge during the quarter related to suspending its business in Russia. HPE forecast adjusted fiscal Q3 earnings between $0.44 and $0.54 per share, roughly in line with expectations for $0.51. Meta COO Steps Down Meta Platforms (FB) shares are up 0.7% in premarket trade after the company’s COO announced she is stepping down. Sheryl Sandberg announced her departure in a Facebook post on Wednesday. Meta’s chief growth officer will take over as COO in the fall and Sandberg will remain on the company’s board of directors. CEO Mark Zuckerberg said the company is planning an internal reorganization with her departure. Zuckerberg said, “I don’t plan to replace Sheryl’s role in our existing structure. I’m not sure that would be possible since she’s a superstar who defined the COO role in her own unique way.” Sandberg told CNBC that stepping down from the position will allow her to focus more on her philanthropic work. Oil Prices Slip Oil prices are slipping on reports that Saudi Arabia is prepared to increase its production if Russia’s output falls significantly. West Texas Intermediate crude futures are down over 1% at $114 bbl while Brent crude futures are falling 0.9% at $115 bbl. The Financial Times reported Saudi Arabia would stepup production if the EU’s ban of Russian oil imports caused a severe shortage of supply. Sources say Saudi Arabia has not yet seen genuine oil shortages in the market but it is “not in their interests to lose control of oil prices”. OPEC+, which is led by Saudi Arabia, is holding its monthly meeting today to discuss production goals. U.S. Gas Prices Surge to Fresh Record The national average for a gallon of regular gas jumped sharply again overnight. AAA shows that price jumped to $4.715/gal today. That was an increase of more than 4 cents from yesterday. The state with the lowest average price currently is Georgia, at $4.194/gal. The highest state average is in California at $6.213/gal. U.S. Factory Orders Expected To Slow The Commerce Department reports factory orders for April at 10:00 a.m. ET. That report is expected to show orders rose just 0.6% compared to 1.8% in March, as manufacturers face pressure from rising costs. The ISM Manufacturing PMI rose unexpectedly to 56.1% in May on Wednesday. But that survey also showed manufacturers plan to slow hiring in the next six months with the employment index dropping to 49.6%. Any reading below 50 signals a slowdown. The S&P Global Manufacturing PMI, formerly the IHS Markit PMI, slipped to a 4-month low
Continue Reading -->Coffee With Greta: Will May Gray Lead To June Gloom?
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: +230 (+0.7%) SPX Futures: +22 (+0.5%) NASDAQ Futures: +62 (+0.5%) Good morning friends! Futures are higher as traders gear up for a new month of trade. Let’s get right to it! Market May See June Gloom The Dow and the S&P 500 eked out 0.1% monthly gains in May while the Nasdaq fell for the second month in a row. The tech-heavy index ended the month 2.1% lower, still deep in a bear market. “Sell in May and go away” rang true as volatility gripped the market with the Fed hiking rates and the global economy showing signs of slowing. Stocks have historically seen weaker performance between May and October. The Dow logged its first 8-week losing streak since 1932 last month while the S&P and Nasdaq dropped for 7-straight weeks. Now traders are gearing up for another month of potential gloom as June includes another Fed rate hike and the beginning of the bank’s balance sheet reduction. That drawdown of the balance sheet is set to begin today at a pace of $30 billion in Treasury securities and $17.5 billion in mortgage-backed securities. The market has become increasingly worried the U.S. economy will drop into a recession as interest rates move higher. Delta Rises on Upgraded Guidance Delta Airlines (DAL) shares are rising 2% in premarket trade after the company hiked its Q2 revenue forecast. In an SEC filing today, Delta said it expects revenue to return to 2019 levels in the current quarter. That’s up from its previous forecast for revenue to be at 93% to 97% 2019 levels this quarter. The upgraded guidance comes amid a surge in travel demand and higher fares. Salesforce Pops on Earnings Beat, Upgraded Profit Outlook Salesforce (CRM) shares are rallying 8.9% ahead of the open after beating fiscal Q1 expectations and hiking its full-year profit forecast. The software company reported adjusted earnings of $0.98 per share on $7.41 billion in revenue. That topped analysts’ expectations for adjusted EPS of $0.94 on $7.38 billion in revenue. Revenue rose 24% year-over-year while net income was down 94% annually as costs jumped. Salesforce reported $13.64 billion in unearned revenue, which comes from subscriptions. That was just shy of expectations for $13.76 billion. The company forecast adjusted fiscal Q2 earnings between $1.01 and $1.02 per share with revenue between $7.69 billion and $7.70 billion. For the full year, Salesforce sees adjusted earnings of $4.74 to $4.76 per share on revenue between $31.7 billion and $31.8 billion. That was higher than analysts’ estimates for full-year profits of $4.65 per share. HP Inc Rises On Strong Fiscal Q2 Results HP Inc (HPQ) shares are up 0.6% in premarket trade after topping fiscal Q2 expectations. The computer maker reported adjusted earnings of $1.08 per share on $16.5 billion in revenue. That was better than analysts’ expectations for adjusted EPS of $1.05 on $16.2 billion in revenue. The results were also at the high end of the company’s target for earnings from $1.02 to $1.08 per share. Commercial PC revenue rose 18% year over year while consumer revenue fell 6%. HP bought back $1 billion worth of stock during the quarter, bringing the YTD total to $2.5 billion. The company’s CEO said it remains committed to at least $4 billion in buybacks for the full fiscal year. HP forecast fiscal Q3 non-GAAP earnings of $1.03 to $1.08 per share vs analysts’ expectations for $1.02. The company expects full-year non-GAAP profits of $4.24 to $4.38 per share, up from the previous forecast of $4.14 to $4.38 and better than analysts’ estimates for $4.25. Victoria’s Secret Beats Q1 Profit Expectations Victoria’s Secret (VSCO) shares are jumping 10.2% ahead of the open after beating Q1 profit expectations. The lingerie retailer reported adjusted earnings of $1.11 per share vs expectations for $0.84. The company’s $1.48 billion in revenue was in line with expectations. Sales were down 4.5% year-over-year. Victoria’s Secret warned business will be challenging through the second half of the year as it faces “supply chain headwinds”. The company expects adjusted fiscal Q2 earnings between $0.95 and $1.25 per share vs $1.19 expected. Chinese EV Makers Report May Deliveries Li Auto (LI), Nio (NIO), and XPeng (XPEV) are all rising in premarket trade after the Chinese electric vehicle makers reported strong May delivery numbers. Li Auto said it delivered 11,496 vehicles last month, up 166% compared to a year ago. Nio delivered 7,024 vehicles in May, up just 4.7% year-over-year. Nio’s deliveries through the first 5 months of 2022 are up 11.8% compared to the same time in 2021. Xpeng delivered 10,125 EVs in May, up 78% compared to May 2021. The company’s YTD deliveries are more than double compared to last year. Oil Prices Rise On EU’s Russian Ban, Shanghai Reopening Oil prices are rising further today following the EU’s agreement to ban Russian oil imports and as Shanghai, China lifts Covid restrictions. West Texas Intermediate crude futures are up 1.5% to over $116 bbl while Brent crude futures are up 1.6% to over $117 bbl. Supply fears are being fueled by the EU’s phased in ban of Russian imports. As Shanghai emerges from a Covid lockdown, demand from that country is also expected to rise. U.S. Gas Prices Surge to Fresh Record The national average for a gallon of regular gas surged overnight. AAA shows that price jumped to $4.671/gal today. That’s up nearly 5 cents from just yesterday when the price hit $4.622/gal. $FB To Become $META Meta Platforms (FB) announced Tuesday it will change its ticker symbol from $FB to $META next week. That change will go into effect prior to the start of trade on Thursday, June 9. The company said, “The new ticker symbol aligns with the company’s rebranding from Facebook to Meta.” The Facebook parent company officially changed its name in October 2021. Manufacturing Activity
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