All posts by Greta Wall
Coffee With Greta: EU Split on Russian Oil Ban
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: +143, (+0.4%) SPX Futures: +11 (+0.2%) NASDAQ Futures: +7 (+0.1%) Good morning friends! Futures are higher as the market weighs hawkish comments from the Fed Chair. Meanwhile, the European Union is split on a Russian oil ban. Let’s get right to it! EU Leaders Split on Russian Oil Ban Oil prices are up slightly as officials in the European Union have been unable to agree on a potential oil embargo against Russia. West Texas Intermediate crude futures are up just 0.5% at $112.65 per barrel with Brent crude futures rising 0.9% to $116.71 per barrel. Some EU countries say the bloc is too dependent on Russian energy to withstand a ban. The American Petroleum Institute is set to release its supply report later today which is not expected to show any change in crude inventory in the U.S. Tesla to Open German Gigafactory Tesla (TSLA) shares are up 0.6% ahead of the open as the electric automaker prepares to open its new gigafactory in Germany. CEO Elon Musk will cut the red ribbon at Giga Berlin today. In a tweet, he said he was “excited to hand over the first production cars” made at the factory. Excited to hand over the first production cars made by Giga Berlin-Brandenburg tomorrow! — Elon Musk (@elonmusk) March 21, 2022 The automaker sees the factory producing up to 500,000 vehicles annually. Alibaba Pops After Upping Buyback Program Alibaba (BABA) shares are surging 9.6% in premarket trade after increasing the size of its share buyback program. The company will now buyback $25 billion worth of shares by March 2024. That’s up from the previous $15 billion. In a statement, Alibaba’s Deputy Chief Financial Officer said, “Alibaba’s stock price does not fairly reflect the company’s value given our robust financial health and expansion plans”. Nike Jumps on Earnings Beat Nike (NKE) shares are up 5% ahead of the open after beating fiscal Q3 expectations. The sportswear company reported earnings of $0.87 per share on $10.87 billion in revenue. That topped analysts’ expectations for EPS of $0.71 on $10.59 billion in revenue. Sales rose 9% year-over-year in North America amid strong demand from consumers returning to stores. Nike’s CEO said, “Marketplace demand continues to significantly exceed available inventory supply”. Powell Says Inflation is Too High Fed Chair Jerome Powell vowed to be tough on inflation Monday, admitting the Central Bank “widely underestimated” how long it would last. In a speech at the National Association for Business Economics Conference, Powell said, “The labor market is very strong, and inflation is much too high”. He said the Central Bank will continue on its path of interest rate hikes to combat those inflation pressures and they’re willing to be aggressive if needed. Powell said the Fed is open to larger rate hikes than 25 basis points and is willing to move rates past neutral and “into a more restrictive stance” if needed. The Dow snapped a 5-day winning streak Monday following those hawkish comments from Powell. In Case You Missed It Boeing (BA) shares fell 3.6% Monday after a 737-800 crash in China. China’s aviation authority confirmed the plane, operated by China Eastern Airlines, crashed with 132 people on board in the mountains of southern China Monday. Officials say there are no signs of any survivors. Boeing said it is ready to assist in the investigation. Alleghany (Y) shares surged 24.8% Monday after Berkshire Hathaway (BRK.A) announced it’s buying the insurance company. Berkshire will buy the company in an all-cash $11.6 billion deal. This is Warren Buffett’s biggest acquisition since 2016. Alleghany will still operate independently after the acquisition.
Continue Reading -->Coffee With Greta: EU Considers Russian Oil Ban
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: -86 (-0.3%) SPX Futures: -4 (-0.1%) NASDAQ Futures: -43 (-0.3%) Good morning friends! Futures are slipping after the market’s best week since 2020. Let’s get right to it! Oil Prices Rally as EU Considers Russian Ban Oil prices are up as some the European Union considers a ban on Russian oil imports. West Texas Intermediate crude futures are up 3.8% at nearly $109 per barrel with Brent crude futures rising 4.2% to over $112 per barrel. Houthi rebels in Yemen also attacked a Saudi Aramco refinery over the weekend, prompting more concerns about supply. Nickel Continues to Plummet Nickel prices plunged in trading on the London Metal Exchange today. The three-month contract hit its new limit-down level of 15% at the open of trade, tumbling to $31,380 per metric ton. Nickel has been in a freefall since trading resumed last week after being halted on March 8 when prices more than doubled to over $100,000. Prices have been higher on the LME than on the Shanghai Futures Exchange. Reuters reported that difference has caused trading volume to be low with few buyers willing to pay the higher price. Zelenskyy Warns of WWIII Ukrainian President Volodmyr Zelenskyy warned Sunday that the war in his country may lead to World War III. In an interview with CNN, he said if peace talks fail between Kyiv and Moscow “that would mean that this is a third world war”. Negotiations are ongoing between the two sides as fighting continues in Ukraine. Civilians were escorted out of the eastern port city of Mariupol by pro-Russian separatists over the weekend. Russia has demanded Ukrainian forces surrender in the city. Data from the UN shows more than 3.3 million people have fled Ukraine since Russia invaded on February 24. President Biden will visit Brussels Thursday for an in-person NATO summit. The White House announced he will then visit Poland Friday but he will not travel to Ukraine. Boeing Falls After Plane Crash in China Boeing (BA) shares are down 6.4% ahead of the open after a 737-800 crash in China. China’s aviation authority confirmed the plane, operated by China Eastern Airlines, crashed with 132 people on board. Officials say contact was lost with the flight over Wuzhou, in the Guangxi mountains. The number of casualties and cause of the crash is still unknown. The FAA and Boeing are expected to assist Chinese regulators in the investigation. The 737 that crashed was not a MAX, which has not yet returned to flight in China. Insurance Company Alleghany Pops on Berkshire Deal Alleghany (Y) is surging 24.9% in premarket trade after Berkshire Hathaway (BRK.A) announced it is buying the insurance company. Berkshire will buy the company for $11.6 billion, or $848.02 per share. This is Warren Buffett’s biggest deal since 2016. Buffett said, “Berkshire will be the perfect permanent home for Alleghany, a company that I have closely observed for 60 years.” Alleghany’s CEO also praised the deal, calling it a “terrific transaction for Alleghany’s owners, businesses, customers, and employees.” Alleghany will still operate independently after the acquisition. In Case You Missed It Last week was the best for the S&P 500 since November 2020. From Monday to Friday, the index surged 6.1%. The Dow rose 5.5% for the week while the Nasdaq jumped 8.1%. The rally came as growth stocks rebounded after the Fed provided more clarity on its future plans. The bank expects 6 more rate hikes this year. U.S. health officials are monitoring the spread of the Covid Omicron subvariant known as BA.2. Officials say it will likely cause an uptick in cases in the U.S. The subvariant is said to be 50% to 60% more contagious than Omicron but no more severe. The new variant reportedly accounts for 25% to 30% of Covid cases in the U.S.
Continue Reading -->Coffee With Greta: Futures Slip to End a Strong Week
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: -171 (-0.5%) SPX Futures: -27 (-0.6%) NASDAQ Futures: -94 (-0.7%) Good morning friends! Futures are lower as the market digests the latest news on the war in Ukraine. Let’s get right to it! St. Louis Fed President Calls for More Aggressive Rate Hikes St. Louis Fed President James Bullard is calling for the Central Bank to be more aggressive on inflation than currently planned. Bullard released a statement today explaining his dissent vote on Wednesday’s rate hike. He was the only FOMC member to vote no on the 0.25% hike, preferring a 0.5% hike instead. Bullard believes the Fed should hike rates to over 3% by the end of this year, which is double the bank’s current plan. He emphasized inflation is hurting lower-income households the most. “The burden of excessive inflation is particularly heavy for people with modest incomes and wealth and for those with limited ability to adjust to a rising cost of living,” said Bullard. Oil Prices Fall Flat Oil prices are down slightly this morning as the market monitors talks between Russia and Ukraine. West Texas Intermediate crude futures are down 0.4% to $102 per barrel with Brent crude futures slipping 0.6% to $106 per barrel. The Kremlin said an agreement still has not been reached in peace talks with Ukraine. Secretary of State Antony Blinken is reportedly planning to visit Saudi Arabia and the UAE soon to ask them to help offset the expected supply loss from Russian oil. Russian missile strikes hit an aircraft repair center on the outskirts of the western Ukrainian city of Lviv today. The attack shows Russia expanding its attacks to new parts of Ukraine. Ukraine’s State Emergency Services also announced one civilian was killed in an airstrike in Kyiv that hit an apartment building. Congress Moves to Revoke Russia’s Protected Trading Status The House voted Thursday to revoke Russia of its status as a “most favored nation” trading partner. That measure passed in a 424-8 vote in the lower chamber. It will now be sent to the Senate, where it’s expected to pass. Stripping Russia of the status will allow the U.S. to impose tariffs on Russian exports. The U.S. also accused Moscow of war crimes in Ukraine after Moscow reportedly bombed a theater with civilians inside in the city of Mariupol. Nickel Prices Plummet Nickel prices continued to fall in trading on the London Metal Exchange. Prices tumbled 12% right at the open of trading toda to $36,915 per metric ton, hitting limit down. The LME has imposed price limits this week in an effort to stabilize trading after nickel prices more than double last week to over $100,000 per metric ton. Russia is the world’s third largest producer of nickel. GameStop Tumbles After Surprise Q4 Loss GameStop (GME) shares are tumbling 8.5% ahead of the open after the video game retailer reported an unexpected loss in Q4. The company reported an adjusted loss of $1.86 per share on $2.25 billion in revenue. That sharply missed analysts’ expectations for a profit of $0.85 per share and is a decline from $1.19 EPS a year ago. But revenue topped expectations for $2.16 billion. GameStop confirmed its plans to launch an NFT marketplace by the end of Q2. The company did not provide full-year guidance. FedEx Profits Fall Short FedEx (FDX) shares are down 2.8% in premarket trade after missing fiscal Q3 profit expectations. The shipping giant reported adjusted earnings of $4.59 per share on $23.6 billion in revenue. Analysts were expecting adjusted EPS of $4.65 on $23.5 billion in revenue. FedEx blamed the miss on higher costs for transportation and wages. The company maintained its fiscal 2022 guidance, forecasting full-year earnings of $21 per share. Existing Home Sales Preview The National Association of Realtors releases its existing home sales report at 10:00 a.m. ET. Economists expect that to show sales dropped to a seasonally adjusted annual rate of 6.13 million units in February. The existing home market has been tight with buyer demand surging while supply remains at a record low. That imbalance has pushed prices to record highs and priced some buyers out of the market. In Case You Missed It Weekly jobless claims beat expectations last week as the labor market nears full employment. The Labor Department reported 214,000 Americans filed initial unemployment claims vs 215,000 expected. It’s the lowest total since January 1. Continuing claims fell by 7,000 to 1.42 million vs 1.48 million expected. Berkshire Hathaway Class A (BRK.A) surged to a fresh record Thursday, closing 2.9% higher at $518,438 per share. The stock rallied as Warren Buffett upped his stake in the energy sector. A new filing shows Berkshire purchased more than 18 million shares of Occidental Petroleum (OXY) in seven separate transactions between Monday and Wednesday this week. The conglomerate now holds more than 136 million OXY shares or 14.6% of the company. OXY jumped 9.5% on Thursday.
Continue Reading -->Coffee With Greta: Stocks Slip After Big Rally
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: -123 (-0.4%) SPX Futures: -18 (-0.4%) NASDAQ Futures: -84 (-0.6%) Good morning friends! Futures are lower as the market gives up its two-day rally and focus turns back to the war in Ukraine. Let’s get right to it! Oil Prices Jump on Supply Warning Oil prices are surging today after the International Energy Agency sent out a supply warning. West Texas Intermediate crude futures are up about 6% and back above $100 per barrel. Brent crude futures are also 6% higher, topping $104 per barrel. The IEA is expecting a loss of three million barrels per day of Russian oil and products next month, which outweighs the expected demand drop of 600,000 barrels per day. Russia denied a Financial Times report that there had been “substantial progress” in peace talks with Ukraine. Kremlin spokesman Dmitry Peskov said, “On the whole, that’s wrong… When there’s progress, we’ll tell you.” The two sides are expected to meet again today. Weekly Jobless Claims Beat Expectations Weekly jobless claims fell to the lowest level since the beginning of 2022. The Labor Department reported 214,000 Americans filed initial unemployment claims last week. That’s down 15,000 from the previous week and better than expectations for 215,000. It’s the lowest total since January 1 and shows the economy nearing full employment. Continuing claims fell by seven million to 1.42 million vs 1.48 million expected. Housing Starts, Building Permits U.S. home construction rose more than expected last month. The Census Bureau reports housing starts rose 6.8% to a seasonally adjusted annual rate of 1.77 million units in February. That was better than economists’ expectations for a SAAR of 1.70 million units. Building permits for future projects meantime fell 1.9% to a SAAR of 1.86 million units vs 1.85 million units expected. This comes a day after the National Association of Homebuilders sentiment index fell to a 6-month low at 79. Confidence in current sales conditions fell 3 points to 86 while sentiment about sales conditions over the next 6 months plummeted 10 points to 70. Builders have struggled with high material costs, supply shortages, and labor shortages amid record-high buyer demand. Nickel Trading Resumes Nickel trading was once again resumed on the London Metal Exchange today after being halted Wednesday. The exchange placed an 8% up or down limit on the metal. The three-month contract hit limit-down right at the open, falling to $41,945 per metric ton. Trading was halted last week as nickel prices more than doubled and topped $100,000 per metric ton. Fed Turns Hawkish The Federal Reserve raised the federal funds rate by 25 basis points to a range of 0.25% to 0.5% as expected on Wednesday. St Louis Fed President James Bullard was the only FOMC member to vote against the 0.25% rate hike and in favor of a 0.5% hike instead. The Central Bank also penciled in 6 more rate hikes this year, three in 2023, and zero in 2024. Treasury yields popped on the news with the 10-year yield jumping 8 basis points to a high of 2.24%, the highest level since 2019. Currently that rate is _______. Fed Chair Jerome Powell told reporters they could begin their balance sheet reduction as early as May and that process will move faster this time than last. It took the Fed 2 years between 2017 and 2019 to reduce the size of its $4.5 trillion balance sheet following the 2008 recession. The bank currently holds nearly $9 trillion of Treasury and mortgage-back securities on its balance sheet. Berkshire Hathaway Soars to $500,000 Berkshire Hathaway Class A (BRK.A) shares topped $500,000 for the first time Wednesday. The stock closed 1.3% higher at $504,036 per share. The rally pushed Berkshire Hathaway’s market cap to $737 billion, making it the sixth most valuable company in the U.S. BRK.A is up 11.8% YTD as it’s benefited from the market rotation back into value stocks. The company also owns 90% of Berkshire Hathaway Energy which has a portfolio of 11 energy companies across the U.S. Those businesses have benefited from surging energy prices in recent months. In Case You Missed It U.S. retail sales slowed more than expected in February as inflation squeezes consumers. The Census Bureau reported retail sales rose 0.3% last month to $658.1 billion vs 0.4% expected. Retail sales excluding autos rose 0.2% vs 0.8% expected. The data is not adjusted for inflation and the CPI rose 0.8% in February. January’s retail sales were revised higher to 4.9% from 3.8%. Ukrainian President Volodymyr Zelenskyy addressed Congress virtually Wednesday morning. He called for the U.S. to implement a no-fly zone over Ukraine, asked for more weapons to be sent to Ukraine, and for more sanctions on Russia. Zelenskyy compared the Russian invasion to Pearl Harbor and 9/11 saying, “Just like nobody else expected it, you could not stop it. Our country experienced the same every day, right now at this moment, every night, for three weeks now.”
Continue Reading -->Coffee With Greta: Fed Decision Day
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: +340 (+1%) SPX Futures: +45 (+1.1%) NASDAQ Futures: +203 (+1.5%) Good morning friends! Futures are higher as the market gears up for today’s Fed decision. Let’s get right to it! Fed Decision Day The market is laser focused on the Fed as the Central Bank is set to announce its rate hike decision at 2:00 p.m. ET. This will be the bank’s first rate hike since 2018 after lowering rates to near zero in March 2020. CME Group’s FedWatch Tool shows more than 98% of traders believe this will be a 0.25% rate hike. The market is also hoping for more clarity on the bank’s plans to reduce the size of its balance sheet. Chairman Jerome Powell told Congress in early March that process will start after rate hikes have begun. Consumer inflation pressures hit a fresh 40-year high in February as the CPI surged 7.9% year-over-year. And wholesale inflation hit a record high as the PPI skyrocketed 10% annually. Retail Sales Slow U.S. retail sales slowed more than expected in February as consumers were dragged down by inflation. The Census Bureau reported retail sales rose 0.3% last month to $658.1 billion. That was weaker than economists’ expectations for 0.4%. January’s retail sales were revised higher to show a gain of 4.9% vs the previous 3.8%. Core retail sales, which exclude gas auto sales, rose 0.2% vs expectations for a 0.9% increase. Import Prices Surge U.S. import prices jumped 1.4% in February, continuing to fuel inflation. That was better than economists’ expectations for a 1.6% increase and lower than 1.9% in January. January and February combined marked the largest increase in 11 years. Oil made up most of February’s gain, rising 8.1%. Excluding fuel, import prices rose just 0.8% last month. Export prices meantime jumped 3%, the largest increase on record, and surged 16.6% year-over-year. Oil Falls Below $100 Oil prices are rising slightly today after tumbling below $100 on Tuesday. West Texas Intermediate crude futures are up 0.6% to just over $97 per barrel while Brent crude futures are up 0.2% to just over $100 per barrel. The oil market has cooled amid ongoing peace talks between Ukraine and Russia. Ukraine’s President said today those talks were sounding “more realistic” but more time is needed. Russia’s Foreign Minister said some deals are close. Nickel Trading Shut Down Again Nickel trading resumed on the London Metal Exchange today after a week-long halt. The LME halted trading March 8 after Nickel prices more than doubled and topped $100,000 per tonne for the first time in history. Price moves today were limited to 5% above or below the last closing price before trading was suspended. But LME was forced to halt trading again after an error allowed trades to go through below the daily price limit. The exchange said it is investigating the glitch and will try to reopen the market ASAP. The trades executed below the limit will be canceled. LME also imposed 15% limits on aluminum, copper, lead, tin, and zinc. This is the first time the exchange has ever placed limits on physical contracts. Metals trading has been volatile amid the war in Ukraine as both Russia and Ukraine are key global suppliers of several metals. Starbucks CEO Retiring Starbucks (SBUX) shares are up 5.7% ahead of the open after CEO Kevin Johnson announced his retirement. In a statement, Johnson said, “A year ago, I signaled to the Board that as the global pandemic neared an end, I would be considering retirement from Starbucks. I feel this is a natural bookend to my 13 years with the company.” Founder and former CEO Howard Schultz will take over as interim CEO. Starbucks plans to find a permanent replacement by the fall. Chair of the board, Mellody Hobson said, “We have a great slate of candidates. People want this job, and we’re fully confident we’ll have a new leader in the fall.” Raskin Withdraws Fed Nomination In other Fed related news, Sarah Bloom Raskin withdrew her nomination to serve on the Federal Reserve board Tuesday. Raskin had been nominated by President Biden to be the Central Bank’s next vice chair for supervision. But she faced an uphill battle for confirmation in the Senate over her views on climate policy. All 50 Senate Republicans were opposed to her confirmation. Then West Virginia Democrat Senator Joe Manchin confirmed this week he would not confirm her. That made it virtually impossible for her nomination to move forward in the 50-50 Senate. Homebuilder Sentiment Preview The National Association of Homebuilders releases its sentiment index at 10:00 a.m. ET. The survey is expected to show confidence among builders slipped two points this month to 80. Builders have seen their business boom due to low supply of existing homes on the market. But they’ve faced severe supply chain and labor shortages as they struggle to keep up with record high demand. In Case You Missed It U.S. airline stocks rallied Tuesday after three major airlines hiked their 2022 revenue forecasts. Delta (DAL) shares jumped 8.7%, while United (UAL) surged 9.2%, and Southwest (LUV) rose 4.9%. All three companies raised their revenue forecasts, predicting a strong rebound in travel demand this year. Delta said its bookings are already outpacing 2019 levels. Tesla raised prices for the second time in a week amid high inflation pressures. The automaker hiked prices on all of its models in the U.S. as well as the Model Y and Model 3 in China. TSLA shares rose 4.6% Tuesday. The price hikes range from $2,000 to $10,000 depending on model. Tesla did not specify the reason for the price hikes but the decision comes days after CEO Elon Musk said they were “seeing significant recent inflation pressure in raw materials & logistics”.
Continue Reading -->Coffee With Greta: Wholesale Inflation Surges 10%
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: +172 (+0.5%) SPX Futures: +28 (+0.7%) NASDAQ Futures: +130 (+1%) Good morning friends! Futures are higher on day one of the Fed’s two-day policy meeting. Let’s get right to it! Wholesale Inflation Hits Double Digits The Bureau of Labor Statistics Producer Price Index shows prices surged 10% year-over-year in February. That was in line with expectations and is the second straight month of double digit wholesale inflation after January was revised higher. On a monthly basis, prices rose 0.8% vs 0.9% expected. Nearly 40% of that gain was due to the gasoline index, which jumped 14.8% year-over-year. The Core PPI, which excludes food, energy, and trade services, jumped 0.2% monthly and 6.6% annually. PPI is a forward indicator for consumer prices as manufacturers and service providers pass-down higher costs. This new inflation data comes on day one of the Fed’s two-day policy meeting. The central bank is expected to announce its first rate hike since 2018 on Wednesday and provide more clarity on its plans to reduce the size of its balance sheet. Oil Prices Slide to 2-Week Low Oil prices are continuing to tumble, hitting a new two-week low. West Texas Intermediate crude futures are down more than 8% to just under $95 per barrel with Brent crude futures falling nearly 8% to under $99 per barrel. The two-day drop in prices comes amid continued talks between Russia and Ukraine and as new Covid lockdowns in China threaten to weaken global demand. China is the largest importer of crude oil in the world. Russia, Ukraine Continue Ceasefire Negotiations Ukraine’s capital city of Kyiv announced a 35-hour curfew will begin tonight after several missile strikes on residential buildings in the city. A fifth round of talks between Ukrainian and Russian officials is set to take place today after the fourth round failed on Monday. Several NATO prime ministers are now heading to Ukraine to meet with the president and prime minister. The PMs of Poland, Slovenia, and the Czech Republic will visit Kyiv today. The group said, “The purpose of the visit is to confirm the unequivocal support of the entire European Union for the sovereignty and independence of Ukraine.” The EU and U.K. both rejected Russia’s “most favored nation” trading status today, allowing harsh tariffs to be imposed on Russian goods. Britain is also set to ban exports of high-end luxury goods to Russia. The EU approved new sanctions today banning transactions with state-owned businesses, a ban of Russian steel imports, a ban on new investments in Russia’s energy security, and a ban on luxury goods exports to Russia. Traders Sell Risk, Treasury Yields Spike Tech stocks sold off sharply on Monday as traders reevaluate their risk positions with the impending Fed rate hike. The Nasdaq was the largest loser of the session, closing 2% lower on Monday. High-growth tech stocks took the brunt of that drop. Cathie Wood’s Ark Innovation ETF (ARKK) plunged 6% and is now down nearly 45% YTD. ARKK shares are up 1.3% ahead of the open. Netflix (NFLX) shares have officially given up all of their pandemic gains. The streaming giant closed 2.7% lower Monday at $331.01 after notching out a new 52-week low at $329.82 earlier in the session. But NFLX shares are rebounding in premarket trade, up 1.7%. On the other side of that tech sell-off, Treasury yields popped. The 10-year yield hit a high of 2.145% Monday, its highest since July 2019. Currently the yield on the 10-year note is down 3 basis points to 2.11%. Airlines Raise Outlook Shares of the major airlines are rallying ahead of the open after hiking their revenue outlooks. Delta (DAL) shares are up 5.9%, United (UAL) is rallying 4.9%, and Southwest (LUV) shares are rising 4%. All three companies said air travel is rebounding from the Omicron slump and they expect travel demand to be stronger than previously forecast this year. Tesla Hikes Car Prices Tesla (TSLA) shares are flat in premarket trade after the electric automaker announced a price hike for its cars. The company raised prices on all models in the U.S. and the Model 3 and Model Y in China. This is the second increase in just a week. Tesla did not give a reason for the price hike but the decision comes after CEO Elon Musk warned about inflation pressures over the weekend. Tesla & SpaceX are seeing significant recent inflation pressure in raw materials & logistics — Elon Musk (@elonmusk) March 14, 2022 In a tweet Sunday he said, “Tesla & SPaceX are seeing significant recent inflation pressure in raw materials & logistics”. In Case You Missed It Lyft (LYFT) followed Uber’s (UBER) lead in adding a fuel surcharge for riders as gas prices remain at record highs. Lyft did not disclose how much that temporary charge will be but Uber’s fee will range between $0.45 to $0.55 per ride. The companies say that extra charge will go directly to drivers. Shares of the major vaccine makers popped on news of renewed Covid lockdowns in China Monday. Pfizer (PFE) shares jumped 3.9%, while BioNTech (BNTX) surged 12%, and Moderna (MRNA) rallied 8.6%. Shenzhen became the first city in China to be placed under a full lockdown with only essential businesses able to be open. That closure is prompting fears of more supply chain issues and worsening inflation as the city is a global tech hub and the fourth largest port in the world.
Continue Reading -->Coffee With Greta: Fed Week Begins
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: +169 (+0.5%) SPX Futures: +15 (+0.4%) NASDAQ Futures: -12 (-0.1%) Good morning friends! Futures are mixed as the market gears up for a new week of trade with the Fed set to meet. Let’s get right to it! Fed in Focus Traders are eyeing the Federal Reserve as the Central Bank prepares to meet. The Federal Open Market Committee meets Tuesday and Wednesday. The bank is expected to enact its first rate hike since 2018 and provide more clarity on plans for the balance sheet runoff. CME Group’s FedWatch Tool shows nearly 95% of traders believe the Fed will raise rates by 0.25%. Chairman Jerome Powell recently told Congress the war in Ukraine poses “uncertain” risks to the U.S. economy but the bank has no plans to alter monetary policy at this point. The Fed is under pressure to get inflation under control after the CPI hit a fresh 40-year high at 7.9% in February. Oil Prices Fall Oil prices are falling amid optimism over talks between Russia and Ukraine. West Texas Intermediate crude futures are down 4.2% to $104.74 per barrel with Brent crude futures falling 3.5% to $108.73 per barrel. U.S. gas prices cooled over the weekend after hitting a fresh record last week. According to AAA the average price for a gallon of regular gasoline is $4.325 today. Although the pace of increases slowed over the weekend, that’s up from $4.065 a week ago. Russia, Ukraine Hold Talks Ukrainian and Russian officials resumed peace talks over video today. Ukraine is still seeking to establish a cease-fire and wants all Russian troops to immediately be withdrawn from the country. Ukraine says two civilians were killed and three were injured in a Russian shelling attack on a residential building in the Obolon district of Kyiv. It’s unclear if Russia will agree to Ukraine’s demands after reports emerged that Moscow has requested military equipment from China to help in its invasion of Ukraine. Russia and China both denied those reports. Treasury Yields Rally U.S. Treasury yields are rallying ahead of the Fed meeting this week. The yield on the 10-year Treasury bond jumped more than eight basis points to 2.08% today, the highest it’s been since July 2019. The 30-year yield is also up eight basis points to 2.44%. China Lockdowns Prompt Supply Chain Worries China locked down the city of Shenzhen over the weekend, with all non-essential businesses closed or working from home. The city is a major manufacturing hub and the fourth largest port in the world. Apple (AAPL) supplier Foxconn is among the businesses that have been shutdown. The lockdown is likely to worsen the supply chain issues and inflation pressures in the U.S. economy. Only 400 cases of Covid have been confirmed in the city but China has followed a “zero Covid” policy amid the pandemic. Other major cities, including Shanghai and Beijing are on the brink of a lockdown as well. The lockdowns prompted a sell-off in Chinese stocks. Hong Kong’s Hang Seng Index fell 5.0%, while the Shanghai Composite dropped 2.6% and the Shenzhen Component fell 3.1%. In Case You Missed It The U.S. Treasury Department added more than 20 new Russian elites to the list of sanctioned individuals Friday. They include the family of Kremlin spokesman Dmitry Peskov, Russian parliament members, the management board of VTB Bank, and one Russian oligarch. The sanctions also target two Russian nationals who helped North Korea obtain material for nuclear weapons. Congress passed a $1.5 trillion omnibus spending bill to fund the government through the end of the fiscal year on September 30. The legislation includes $13.6 billion in humanitarian and security aid for Ukraine. Covid relief funding was scratched from the bill after Republicans said it was a non-starter issue. President Biden is expected to sign the bill into law this week.
Continue Reading -->Coffee With Greta: Futures Bounce on Russia-Ukraine Optimism
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: +286 (+0.9%) SPX Futures: +43 (+1.1%) NASDAQ Futures: +181 (+1.3%) Good morning friends! Futures are higher amid optimism about talks between Russia and Ukraine. Let’s get right to it! Russia-Ukraine Talks Make Progress Russian President Vladimir Putin says ongoing talks between his country and Ukraine are making progress. Meeting with the Belarusian President he said, “There are some positive shifts there, as I have been told by our delegation.” Those talks are reportedly taking place daily. But Russian forces are still advancing further into Ukraine. New satellite images appear to show a Russian convoy moving into towns and forests outside of the capital Kyiv, in an apparent renewed push into the city. The U.S. is set to revoke Russia’s status as a “most-favored nation” for trade. That status exempts a country from tariffs and changing it allows Congress to impose tariffs on all goods from Russia. Goldman Sachs Downgrades GDP Forecast Goldman Sachs (GS) analysts slashed their 2022 GDP forecast for the U.S. The group now expects growth of 1.75%, down from the previous 2% and lower than consensus estimates for 2.75%. Goldman cited rising inflation and higher energy prices caused by the war in Ukraine for that downgrade. The group also said recession risks are rising. Goldman says the chances of a recession next year are now between 20% to 35%. Goldman, JPMorgan Chase Leave Russia JPMorgan Chase (JPM) joined Goldman Sachs (GS) in pulling its business out of Russia Thursday. The investment banking giants said they are working in compliance with regulators to wind down operations in the country following Russia’s invasion of Ukraine. A JPMorgan spokeswoman said in an email, “In compliance with directives by governments around the world, we have been actively unwinding Russian business and have not been pursuing any new business in Russia.” Goldman was the first major Wall Street bank to announce the move early Thursday. The investment firm said, “We are focused on supporting our clients across the globe in managing or closing out pre-existing obligations in the market and ensuring the well-being of our people.” Rivian Reports Larger Than Expected Q4 Loss Rivian (RIVN) shares are falling 10.2% ahead of the open after reporting a steeper-than-expected loss in Q4. The electric vehicle maker reported an adjusted per share loss of $2.43 per share on $54 million in revenue. That was worse than analysts’ expectations for a loss of $1.97 per share on $60 million in revenue. The stock hit a new 52-week low at $39.77 in intraday trade Thursday. Rivian warned about continued supply chain struggles for production and a “slow start” to Q1. The company expects to deliver 25,000 vehicles this year after delivering nearly 1,000 in Q4. Docusign Slips on Weak Guidance DocuSign (DOCU) shares are tumbling 16.5% in premarket trade after the company issued weak fiscal 2023 guidance. The online document signing site reported fiscal Q4 adjusted earnings of $0.48 per share on $580.8 million in revenue. That was in line with analysts’ profit expectations and beat revenue forecasts for $562 million. DocuSign also announced a $200 million stock buyback. Shares slipped after guidance came in short. DocuSign forecast fiscal 2023 total revenue will range between $2.47 billion to $2.48 billion. Analysts had forecast full-year total revenue of $2.6 billion. Oracle Sinks on Earnings Miss Oracle (ORCL) shares are down 1.5% ahead of the open after a fiscal Q3 earnings miss. The company reported adjusted earnings of $1.13 per share on $10.51 billion in revenue. Analysts were looking for adjusted EPS of $1.18 on $10.51 billion in revenue. Oracle said its profits were dragged down by investments in gene-sequencing company Oxford Nanopore and Arm server chipmaker Ampere Computing. But the company remains optimistic about the future of those investments. Oracle said, “We remain confident that our investments in these two cutting-edge technology companies will deliver very strong returns.” Senate Passes Funding Bill The Senate passed the omnibus bill to fund the government through the end of the fiscal year. The legislation was approved in a 69-31 vote late Thursday night. It now heads to the President’s desk, avoiding a government shutdown tonight. The legislation includes $13.6 billion in humanitarian and security aid for Ukraine. In Case You Missed It U.S. inflation pressures hit a new 40-year high in February. The Bureau of Labor Statistics’ CPI rose 7.9% year-over-year last month vs 7.8% expected. Groceries prices rose 8.6%, gas prices jumped 38%, and used vehicle prices surged 41.2%. The core CPI rose 6.4% annually. Amazon (AMZN) logged its second-best day of 2022 Thursday as shares jumped 5.4%. The rally came after the tech giant announced a 20-for-1 stock split and $10 billion stock buyback program. The split is set to take effect in early June.
Continue Reading -->Coffee With Greta: Inflation Is SCALDING 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: -326 (-1%) SPX Futures: -42 (-1%) NASDAQ Futures: -172 (-1.3%) Good morning friends! Futures are lower after talks failed between Russia and Ukraine and the release of new hot inflation data. Let’s get right to it! Inflation Heats Up in February U.S. inflation pressures were scalding hot in February. The Bureau of Labor Statistics reported the consumer price index surged 7.9% year-over-year last month. That’s a fresh 40-year high and hotter than economists’ expectations for 7.8%. On a monthly basis, prices rose 0.8% vs 0.7% expected. Energy prices continued to lead those gains with gas prices surging 38% year-over-year. Grocery prices also jumped 8.6% while used car and truck prices skyrocketed 41.2%. The core CPI, which excludes food and energy prices, rose 0.5% monthly and 6.4% annually which was in line with expectations. Weekly Jobless Claims Rise Weekly jobless claims rose more than expected last week. The Labor Department reported 227,000 Americans filed initial claims for unemployment benefits. That was up 11,000 from the previous week and higher than expectations for 216,000. Continuing claims rose by 18,000 to 1.49 million vs 1.34 million expected. Oil Resumes Rally Oil prices are on the rise again today after falling on Wednesday. WTI crude futures are up 3.8% a nearly $113 per barrel with Brent crude futures up 4.1% to nearly $116 per barrel. WTI tumbled 12.5% Wednesday, settling at $108.70 per barrel. That was the largest single-day drop since November 26. Brent dropped 13% to $111.10 per barrel, the biggest one-day decline since April 2020. The drop boosted Wall Street on Wednesday with the S&P 500 logging its best day since June 2020. Russia-Ukraine Talks Fail Talks between Russia and Ukraine’s Foreign Ministers failed today. Russia’s Sergey Lavrov and Ukraine’s Dmytro Kuleba met for just 1.5 hours in Turkey. Kuleba said Moscow’s leaders “live in their own reality” after Lavrov attempted to deny Russian attacks on civilians at a hospital. The two sides failed to establish a 24 hour cease-fire or a humanitarian corridor in and out of the southern Ukrainian port city of Mariupol. Amazon Announces 20-for-1 Stock Split Amazon (AMZN) is finally splitting its stock. The online retail giant announced after the market close Wednesday that the board has approved a 20-for-1 stock split. Amazon also said it will buy back $10 billion worth of stock. AMZN shares rallied in after-market trade and are up 4.3% ahead of the open. An Amazon 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.” The stock will split after the close on June 3 and trading will begin on a split-adjusted basis on June 6. Crowdstrike Pops on Earnings Beat, Strong Outlook CrowdStrike (CRWD) shares are surging 11.8% in premarket trade after issuing a strong outlook. The cybersecurity company reported fiscal Q4 adjusted earnings of $0.30 per share on $431 million in revenue. That beat analysts’ expectations for EPS of $0.20 on $411 million in revenue. And Crowdstrike’s forecast was way stronger than expected. The company expects fiscal Q1 adjusted earnings between $0.22 and $0.24 per share with revenue between $458.9 million to $465.4 million. Analysts had forecast EPS of $0.17 and revenue of $440.3 million. Crowdstrike forecast full-year earnings ranging from $1.03 to $1.13 per share on revenue of $2.13 billion to $2.16 billion. Wall Street was looking for EPS guidance of $0.90 and $2 billion in revenue. In Case You Missed It The House passed a $1.5 trillion omnibus spending bill Wednesday to fund the government through the end of the fiscal year. The final legislation did not include $15.6 billion in COVID relief Democrats had wanted but does include $13.6 billion in security and humanitarian aid for Ukraine. Congress is facing a Friday deadline to pass the bill to avoid a government shutdown. The House may pass a temporary spending plan to give the Senate more time to vote on the omnibus bill.
Continue Reading -->Coffee With Greta: Oil Slips, Stocks Rally
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: +570 (+1.8%) SPX Futures: +80 (+1.9%) NASDAQ Futures: +320 (+2.4%) Good morning friends! Futures are higher as commodity prices take a breather. Let’s get right to it! Oil Prices Cool Down Oil prices are falling as the market assesses the impact of the U.S. ban on Russian oil. The U.S. banned all Russian energy imports Tuesday. West Texas Intermediate crude futures are down more than 3% at just under $120 bbl while Brent crude futures have dropped 2.9% to $124 bbl. The head of the International Energy Agency said last week’s decision to release 60 million barrels of oil reserves was “an initial response” and more could be released if needed. Other commodity prices are also taking a breather after surging for the past week. Wheat futures are down 2.8% to $12.86 per bushel. Russia also announced a ceasefire in Ukraine today, allowing civilians to flee the country. Crypto Rallies on Executive Order Cryptocurrencies are rallying today after President Biden announced an executive order on digital assets. Bitcoin is up 8% to $42,025 with Ethereum rising 6.2% to $2,740. The global crypto market cap is up 6.5% to $1.92 trillion. Biden’s executive order aims to make sure the U.S. crypto industry is not left behind. It says, “The United States must maintain technological leadership in this rapidly growing space, supporting innovation while mitigating the risks for consumers, businesses, the broader financial system, and the climate.” It also directs the government to explore what’s needed for a central bank digital currency. Campbell Soup Earnings Beat Expectations Campbell Soup (CPB) shares are up 1% in premarket trade after beating fiscal Q2 profit expectations. The company reported adjusted earnings of $0.70 per share on $2.21 billion in revenue. That was compared to analysts’ expectations for adjusted EPS of $0.68 on $2.22 billion in revenue. Campbell Soup maintained its full-year guidance for earnings between $2.75 to $2.85 per share. Bumble Surges Despite Q4 Miss Bumble (BMBL) shares are surging 23.4% ahead of the open despite a wider-than-expected Q4 loss. The online dating company announced a loss of $0.08 per share on $208.2 million in revenue. That missed analysts’ expectations for a per share loss of $0.02 on $209.6 million in revenue. Total paying users rose 10.6% year-over-year to 3 million with average revenue per user jumping $2.81 to $22.83. Bumble forecast Q1 revenue between $207 million and $210 million with full-year revenue between $934 million and $944 million. Analysts were expecting $939.1 million for full-year revenue. Stitch Fix Slashes Guidance Stitch Fix (SFIX) shares are tumbling 21.6% in premarket trade after the company cut its full-year guidance. Stitch Fix reported a fiscal Q2 loss of $0.28 on $516.7 million in revenue. Analysts were expecting a loss of $0.28 per share on $514.8 million in revenue. But the company expects revenue to fall in fiscal Q3. Stitch Fix forecast net revenue between $485 to $500 million this quarter, which would be down as much as 10% year-over-year. The company also lowered its full-year guidance, expecting revenue to be flat or slightly lower compared to fiscal 2021. JOLTS Preview The Labor Department releases its January Job Openings and Labor Turnover Survey or JOLTS at 10:00 a.m. ET. The survey is expected to show the number of available jobs at the start of 2022 rose to 11 million from 10.9 million in December. That’s still outpacing the estimated 7.2 million people who were unemployed in January. U.S. businesses have struggled to fill open positions as the economy reopens. In Case You Missed It Apple (AAPL) unveiled several new products at its spring launch event Tuesday. Those include a new low-cost iPhone, new colors for the iPhone 13 and 13 Pro, a new iPad Air, a new Mac Studio computer, and a new Studio Display monitor. The new iPhone SE costs $429. It has 5G capability and Apple’s A15 processor.
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