All posts by Greta Wall
Coffee With Greta: Oil Hits 7-Year High on Ukraine Crisis
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: -174 (-0.5%) SPX Futures: -20 (-0.5%) NASDAQ Futures: -63 (-0.4%) Good morning friends! Futures are lower as the market gears up for a new month of trade and all eyes remain on Russia’s attack on Ukraine. Let’s get right to it! Oil Prices Hit 7-Year High U.S. crude prices surged to the highest level since July 2014 amid supply concerns as Russia continues its attack on Ukraine. West Texas Intermediate crude futures jumped 5.7% to $101.17 per barrel. At the same time, Brent crude futures rose 6.3% to $104.16 per barrel. Canada became the first country to ban Russian oil imports Monday. The International Energy Agency is meeting today to discuss “the impact of Russia’s invasion of Ukraine on oil supply and how IEA members can play a role in stabilizing energy markets.” Morgan Stanley hiked its oil price forecasts, expecting Brent to average $110 bbl in Q2. Russia Bears Down on Ukraine Capital Russia is continuing its assault on Ukraine with a massive convoy approaching the capital city of Kyiv. Satellite images showed a 40 mile long convoy of Russian military vehicles approaching the city Monday. Ukrainian and Russian officials held talks in Belarus Monday which ended with no resolution. The ruble is down again today after recovering some losses Monday. The exchange rate is over 102 ruble to $1 USD. The Russian Central Bank kept the Moscow Stock Exchange closed again today. Russia-linked ETFs in the U.S. are continuing to plummet today. The VanEck Russia ETF (RSX) is down 15.8% ahead of the open, with the iShares MSCI Russia ETF (ERUS) falling 11.2%. Russians Rush to Crypto Russians flooded the crypto market Monday as the ruble collapsed in response to new sanctions. Trading volume between the ruble and Bitcoin jumped to a nine-month high, pushing BTC’s value above $41,000. The global crypto market cap is up 12.3% over the past 24 hours to $2.04 trillion. Bitcoin is up 17% at $44,600 with Ethereum rising 13% to $2,900. Crypto exchange Binance confirmed Monday it is blocking the accounts of any Russians targeted by sanctions. Binance said it will not freeze the accounts of other Russian users. Target Rallies on Earnings Target (TGT) shares are surging 12.5% ahead of the open after reporting strong fiscal Q4 earnings. The retailer reported adjusted earnings of $3.19 per share on $31 billion in revenue. Analysts had forecast adjusted EPS of $2.86 on $31.39 billion in revenue. Overall sales were up 9% year-over-year last quarter. Target’s online services expanded 45% in the full-year, after surging 235% the prior year. The company forecast revenue growth in the low to mid single-digits this year and earnings growth in the high single-digits. Domino’s Slides on Weak Q4 Results Domino’s Pizza (DPZ) shares are sliding 6% in premarket trade after missing Q4 expectations The pizza chain reported earnings of $4.25 per share on $1.34 billion in revenue. That was short of analysts’ expectations for EPS of $4.28 on $1.38 billion in revenue. Domino’s also announced CEO Ritch Allison will retire. He will be succeeded by COO Russell Weiner. Zoom Warns of Growth Slowdown Zoom (ZM) shares are down 2.2% ahead of the open after the company’s 2022 revenue forecast disappointed. Zoom reported adjusted Q4 earnings of $1.29 per share on $1.07 billion in revenue after the market closed Monday. That beat analysts’ expectations for adjusted EPS of $1.06 on $1.05 billion in revenue. But traders sold off the stock as revenue growth continues to slow. Zoom’s Q4 revenue was up 21% year-over-year, a slowdown from 35% in Q3. The company forecast Q1 revenue between $1.07 billion and $1.075 billion, which would represent growth of just 12%. For the full year, Zoom expects revenue of $4.53 billion to $4.55 billion, lower than analysts’ expectations for $4.71 billion. Zoom is the 4th largest holding in Cathie Wood’s Ark Innovation ETF (ARKK) which is down 0.4% in premarket trade. Lucid Slashes Production Forecast Lucid Group (LCID) shares are tumbling 12.2% ahead of the open after the electric automaker slashed its 2022 production forecast. The company now expects to produce between 12,000 and 14,000 vehicles this year, down from 20,000 previously. The company cited supply chain constraints for the cut. CEO Peter Rawlinson said, “This reflects the extraordinary supply chain and logistics challenges we’ve encountered and our unrelenting focus on delivering the highest-quality products.” Lucid said it has received over 25,000 customer reservations for its vehicles. In Case You Missed It Tesla (TSLA) shares rallied 7.5% Monday as the company’s new factory in Germany appears close to opening. German newspaper Tagesspiegel reported Tesla is expected to receive its final environmental approvals by the end of this week. That is the last hurdle before Tesla can start producing Model Y’s at Gigafactory Berlin. Tesla is said to be planning a grand opening ceremony in the third week of March. A shipment of SpaceX Starlink satellite internet dishes arrived in Ukraine Monday. Ukraine’s digital minister confirmed the deliveries in a tweet, thanking Elon Musk. Musk responded saying “you are most welcome”. SpaceX sent the satellites to Ukraine following a request over the weekend, to alleviate the impact of suspected Russian cyber attacks on the country.
Continue Reading -->Coffee With Greta: Russia Slammed by Sanctions
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: -463 (-1.4%) SPX Futures: -67 (-1.5%) NASDAQ Futures: -194 (-1.4%) Good morning friends! Futures are sharply lower as the market assesses the impact of the latest sanctions against Russia. Let’s get right to it! Russian Ruble Plunges The Russian ruble plummeted 29% against the U.S. dollar today after new financial sanctions were imposed against Moscow over the weekend. The ruble hit an all-time low of 119 per dollar but has since pared some of those losses and is now trading at 96 ruble per dollar. Russia’s central bank hiked interest rates from 9.5% to 20% in response and shut down the Moscow Stock Exchange for the day. The U.S. Treasury Department banned transactions with the Russian Central Bank this morning, effectively cutting off the bank from the U.S. dollar. This comes after the U.S., Europe, and Canada imposed limits on the Russian Central Bank’s use of international reserves over the weekend. Officials also removed key Russian banks from the SWIFT interbank messaging system. Russian, Ukrainian Officials Meet Russian and Ukrainian officials are meeting at the Ukraine-Belarus border today. Ukrainian President Volodymyr Zelenskyy has said he does not believe there will be a breakthrough from that meeting. Russia continued its attacks on Ukraine over the weekend, with a focus on the capital city of Kyiv. But Ukrainian forces have so far maintained control of the country. Ukraine’s interior ministry says dozens of civilians have been killed and hundreds have been wounded in the city of Kharkiv. Russian President Vladimir Putin dramatically escalated tensions with the West Sunday, by putting his country’s nuclear deterrence forces on high alert. Putin cited “aggressive statements” by NATO for that decision. Oil Prices Surge Oil prices are rallying again amid renewed uncertainty about how the Russia-Ukraine conflict will impact global supply. West Texas Intermediate crude prices are up 4.6% at $95.74 per barrel. Brent crude prices are up 3.1% at $101 per barrel. Goldman Sachs analysts hiked their forecast for Brent crude prices today to $115 per barrel. U.S. gas prices are expected to hit a new record high amid the surge in oil prices. BP to Sell Stake in Russian Oil Producer BP (BP) shares are down 8.2% ahead of the open after announcing its plan to sell its stake in Russia’s state-owned oil company. BP has held a 19.75% stake in Rosneft since 2013. BP’s CEO is also resigning from the Rosneft board effective immediately.’ Crypto Slips Cryptocurrency prices slid over the weekend amid uncertainty surrounding the financial sanctions against Russia. The global crypto market cap is down 4.4% in the past 24 hours, to $1.8 trillion. Bitcoin is down 3.8% at $38,200 with Ethereum falling 6.6% to $2,600. Trade Deficit Surges to New Record The U.S. trade deficit surged 7.1% in January to a new record $107.6 billion. That’s according to new data from the Commerce Department and is up from $100.5 billion in December. Goods imports jumped 1.8% at the start of the year to a record high $262 billion. Goods exports dropped 1.8% to $154.8 billion. The trade deficit has soared as the U.S. economy opens faster than our global trading partners. The Russia-Ukraine war is expected to make the supply chain issue worse. In Case You Missed It The CDC relaxed its indoor masking recommendations for most Americans on Friday. The agency now recommends wearing a mask only in areas where risk is “high”. The CDC released a new color-coded map for Americans to determine the risk level of their community. About 63% of all U.S. counties are considered low or medium risk. The CDC is now putting heavier weight on hospitalizations and hospital capacity in determining community risk, rather than just case rate.
Continue Reading -->How Stock Splits Work, and Why You Should Care About Them
10 Things to Know About Stock Splits Alphabet (GOOGL) announced a 20-for-1 stock split on February 1, 2022. And the next day everyone Googled, “what is a stock split?” No, really. You can see the spike in searches in this Google Trends chart: (source: Google Trends) So, let’s break down all the nitty gritty details about stock splits and how they benefit traders! What Is a Stock Split? A stock split is when a company increases the amount of its shares without changing the company’s market value. The most common type is a 2-for-1 forward stock split. But a company’s board of directors can choose any ratio for a split, like Alphabet’s aforementioned 20-for-1 split. How Does a Stock Split Work? Let’s use a 2-for-1 split on a $100 stock. Assume a company has 1,000 shares outstanding that are worth $100 each. That’s a market value of $100,000. (1,000 * $100) The board of directors approves a 2-for-1 stock split. So each $100 share would be split into 2 shares worth $50 each. And the company’s total number of shares outstanding would increase from 1,000 to 2,000. But the market value of the company remains the same: 1,000 shares x $100 = $100,000 market value 2,000 shares x $50 = $100,000 market value Anyone who owned the stock before the split own the same dollar amount worth of stock, just divided into more shares. It’s like slicing a pie into 16 slices instead of 8. If someone had 5 shares worth $100 each ahead of the stock split, they would then have 10 shares worth $50 each after the split. What is the Point of a Stock Split? You may be wondering why a company would do a stock split if there is no change in value. Although a split itself does not make a company more or less valuable, it has the potential to push the stock higher. Splitting a large stock makes it easier for smaller traders and investors to buy and increases the number of shares available to be purchased. What Does a Stock Split Signal About a Company? A stock split signals to the market that a company believes it will continue to grow and attract new investors. By splitting the stock, the company makes it easier for more traders and investors to buy. How Do Companies Typically Perform After a Split? According to Zacks Investment Research, stock prices usually go up after a split. The firm cites two studies which found split stocks outperformed the overall market by 8% the year after the split and 12% the following three years. This could be partly caused by more investors buying the stock, because they feel like they are getting it for a lower price. And more people buying the stock drives the value up over time. Are There Other Kinds of Stock Splits? There is another kind of split — a reverse stock split. In a reverse split, the number of shares is reduced and the share price is increased. Say a company has 1,000 shares worth $100 each, and implements a 1-for-2 reverse split. Every two shares of the stock would be turned into one, leaving the company with 500 total shares worth $200 each. The value of the company stays at $100,000. But the number of shares shrinks and the individual share price is boosted. Why Would a Company Do a Reverse Stock Split? A reverse split is typically used to prevent delisting from an exchange. The New York Stock Exchange, for example, has a minimum share price of $4 for a stock to be listed. If a stock does not maintain that minimum, it can be delisted from the NYSE and sent to an over-the-counter (OTC) market. Reverse splits are also used to boost a company’s image. Many traders and investors look at single-digit stocks as risky investments. So a company can use a reverse split to avoid that stigma. Which Notable Companies Have Done Splits? In the first week of February 2022 alone, there were 60 total splits. Most of them didn’t get any attention. But back in 2020, two of the biggest companies on Wall Street split their stock on the same day. In August 2020, Tesla (TSLA) implemented a 5-for-1 split, while Apple (AAPL) did a 4-for-1 split. Both companies began trading on a split-adjusted basis on Monday, August 31. TSLA shares closed at $2,213.40 on Friday, August 28, making the 5-for-1 split equivalent to $442.68 per share. Tesla’s stock hit new all-time highs of over $1,200 per share in November 2021, up more than 170% from the split. AAPL has also seen success since its 4-for-1 split. The iPhone maker’s stock closed at $499.23 on Friday, August 28, making the 4-for-1 split price $124.81 per share. Apple became the first company in history with a $3 trillion market cap in January 2022 as shares rose to $182.94. The tech giant said the goal of its split was to make the stock “more accessible to a broader base of investors.” What Will GOOGL’s 20-for-1 Stock Split Look Like? Up next for big stock splits is Google-parent Alphabet (GOOGL). In its Q4 earnings report, the company announced a 20-for-1 stock split for Class A (GOOGL) and Class C (GOOG) shares. The decision for such a big stock split comes as Alphabet shares are nearing $3,000 each. To break down what this split will look like, let’s use that price. Alphabet said the stock will begin trading on a split-adjusted basis on July 15, 2022, based on shareholders on July 1. That means one must own the stock on or before July 1 in order to participate in the split. Those who buy shares after that date, will buy based on the split-adjusted price. So if GOOGL shares are worth $3,000 each when the split is implemented, every one share will split into 20 that are worth $150 each. That keeps the value the same for current shareholders, but makes the
Continue Reading -->Coffee With Greta: Traders Buy a Scary Dip
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: +28 (+0.7%) NASDAQ Futures: +124 (+0.9%) Good morning friends! Futures are up as the market continues to monitor the conflict in Ukraine and digests new economic data. Let’s get right to it! PCE Inflation Surges in January The Bureau of Economic Analysis reported the PCE price index rose 0.6% monthly in January and surged 6.1% year-over-year. That was in-line with economists’ expectations and is the fastest pace of annual inflation since 1984. The Core PCE Index, which excludes food and energy prices, rose 0.5% monthly and 5.2% annually. That’s the fastest year-over-year increase since 1983. Core PCE is the Fed’s preferred measure of inflation. Consumer Spending Bounces Back The Bureau of Economic Analysis reported consumer spending jumped 2.1% in January. That was higher than expectations for a 1.6% increase and a rebound from the 0.6% decline in December. Americans spent $285.4 billion more on goods in January and $51.8 billion more on services. Russia Closes In on Kyiv Russia continued its offensive on Ukraine overnight. Russian forces are now said to be closing in on the capital city of Kyiv. Ukraine’s Foreign Minister says the city has been hit by “horrific Russian rocket strikes”. This comes as EU leaders agreed to freeze European assets held by Russian President Vladimir Putin and Foreign Minister Sergei Lavrov. Russia says it will impose retaliatory sanctions on the West, after the U.S. and its European partners announced Russian sanctions Thursday. The UN says there have been at least 127 civilian casualties in Ukraine. President Biden is set to participate in an emergency virtual NATO summit this morning. Russia linked stocks in the U.S. are rebounding ahead of the open, with the VanEck Russia ETF (RSX) up 8.5% after plunging in recent sessions. Block Jumps on Q4 Earnings Beat Block (SQ) – formerly Square – shares are surging 19.6% in premarket trade after the digital payments company beat Q4 expectations. The company reported adjusted earnings of $0.27 per share on $4.08 billion in revenue. That beat consensus expectations for adjusted EPS of $0.23 on $4.04 billion in revenue. Block’s Square seller business brought in gross profits of $657 million while Cash App saw gross profit of $518 million, both beat expectations. The company said, “we saw strength in recurring paycheck deposits, which we view as a key barometer of customers using Cash App for their primary banking needs.” Coinbase Crushes Q4 Expectations Coinbase (COIN) shares are up 1.9% ahead of the open after a huge Q4 earnings beat on the top and bottom line. The cryptocurrency exchange reported earnings of $3.32 per share on $2.5 billion in revenue. That crushed analysts’ expectations for EPS of $1.85 on $1.94 billion in revenue. But Coinbase forecast its retail Monthly Transaction Users and total trading volume will be lower this quarter compared to Q4. The company cited the decreased volatility in crypto and the 20% drop in the global crypto market cap so far this quarter for that outlook. Beyond Meat Tumbles on Earnings Miss Beyond Meat (BYND) shares are dropping 11.2% in premarket trade after the alternative meat company sharply missed Q expectations. Beyond Meat reported a loss of $1.27 per share on $100.7 million in revenue. That was worse than analysts’ expectations for a $0.71 per share loss on $101.4 million in revenue. Revenue was down 1.2% compared to Q3 as U.S. grocery store sales tumbled 19.5%. Beyond Meat forecast revenue between $560 million and $620 million this year, shy of analysts’ expectations. Consumer Sentiment Preview The University of Michigan reports Consumer Sentiment at 10:00 a.m. ET. Economists expect the index to be unchanged from the earlier flash reading of 61.7. The survey also includes consumer expectations for inflation over the next year and 5-years. Pending Home Sales Preview The National Association of Realtors reports January pending home sales at 10:00 a.m. ET. Consensus expectations are that contract signings rose 1.0% last month after tumbling 3.1% in December. Pending sales represent home sales that will close in 30 to 90 days. In Case You Missed It Wall Street staged a stunning reversal of losses Thursday. The Dow ended the session 92 points higher after being down 859 points at its session low. The Nasdaq closed the day 3.3% higher after dropping 3.5% earlier in the session. And the S&P 500 settled 1.5% higher after falling 2.6% earlier in the day. All three indexes remain in correction, but the Nasdaq rebounded from bear market territory.
Continue Reading -->Coffee With Greta: Russia Attacks Ukraine
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: -812 (-2.5%) SPX Futures: -108 (-2.6%) NASDAQ Futures: -432 (-3.2%) Good morning friends! Futures are sharply lower after Russia attacked Ukraine overnight. Let’s get right to it! Russia Attacks Ukraine Russia invaded Ukraine overnight after President Vladimir Putin announced a special “military operation” in the country. Putin claims the goal was to demilitarize Ukraine, not occupy the country. He also warned countries that try to interfere will face “consequences they have never seen.” Airstrikes have been reported in the capital city of Kyiv, Odessa, Kharkiv, and Mariupol. Ukraine says Russia has conducted more than 30 strikes on civilian and military infrastructure. NATO Secretary General Jens Stoltenberg said the military alliance will increase its presence in eastern Europe in response. President Biden is meeting virtually with G7 leaders today and is expected to announce severe sanctions against Russia. Oil, Metal Prices Surge Oil prices are surging amid the Russian attack on Ukraine. Brent crude futures are up more than 8%, at nearly $105 per barrel. It’s the first time prices have topped $100 since 2014. U.S. West Texas Intermediate futures are also up 8% and hovering just below $100. Natural gas prices are up 6%. Russia is the second-largest oil exporter in the world and largest natural gas exporter. The conflict is expected to cause gas prices in the U.S. to rise sharply. Fears of a supply disruption are also rocking the metals market. Aluminum prices jumped more than 3% to a record high $3,450 per ton on the London Metal Exchange. Nickel is trading at $25,000 per ton, the highest level in more than a decade. Platinum prices are up more than 2% with palladium surging more than 6%. The conflict is expected to cause gas prices in the U.S. to rise sharply. Russia is a producer of all four metals. The country supplies 35% of global palladium, 10% of platinum, 6% of aluminum, and 5% of nickel. Weekly Jobless Claims Beat Expectations The Labor Department says 232,000 Americans filed initial claims for unemployment benefits last week. That was down 17,000 from the previous week and better than 235,000 expected. Continuing jobless claims fell by 112,000 to 1.48 million vs 1.58 million expected. That’s the lowest level of continuing claims since March 1970. Q4 GDP Revision The Bureau of Economic Analysis revised Q4 GDP growth higher to 7% annually from 6.9%. For all of 2021, GDP rose 5.7%. That’s the fastest calendar-year growth since 7.2% in 1984. Today’s revision included increases in private inventory investment, exports, PCE, and nonresidential fixed investment. Those increases were partly offset by decreases in federal, state and local government spending. Alibaba Earnings Alibaba (BABA) shares are down 8.6% ahead of the open after reporting its slowest revenue growth ever. The Chinese e-commerce giant reported earnings of 16.87 yuan per share on 242.58 billion yuan in revenue. EPS beat expectations but revenue fell short. Sales were up 10% year-over-year, which is the company slowest quarterly growth rate since listing in the U.S. Moderna Earnings Moderna (MRNA) shares are down 4.1% in premarket trade despite beating Q4 expectations. The pharmaceutical giant reported earnings of $11.29 per share on $7.2 billion in revenue. That beat expectations for EPS of $9.90 on $6.78 billion in revenue. Full-year revenue totaled $18.5 billion in 2021, including $17.7 billion from its Covid vaccine. Moderna hiked its 2022 sales forecast for the vaccine by $2 billion to $19 billion. Market Correction Deepens The major indexes fell sharply on Wednesday as the market continues to monitor the conflict between Russia and Ukraine. The S&P 500 slid for the fourth straight session, closing 1.6% lower. The Dow and the Nasdaq both notched a five-day losing streak. The Dow closed at its lowest level yet in 2022. The Nasdaq is nearing bear market territory, down more than 18% from its last closing record in November 2021. New Home Sales Preview The Census Bureau reports January new home sales at 10:00 a.m. ET. Consensus expectations are that sales fell to a seasonally adjusted annual rate (SAAR) of 803,000 units last month. But existing home sales jumped unexpectedly in January. The National Association of Realtors reported existing sales rose 6.7% last month to a seasonally adjusted annual rate of 6.5 million units. Many economists attributed that surprise increase to buyers rushing to get into the market before mortgage rates rise further. The average 30-year rate is now above 4% for the first time since 2019. In Case You Missed It Lowe’s (LOW) beat Q4 expectations as the home improvement retailer benefits from high home values. The company hiked its full-year forecast after beating expectations on the top and bottom line. Lowe’s brought in earnings of $1.78 per share on $21.34 billion in revenue at the end of 2021. LOW shares closed 0.2% higher Wednesday. The market has adjusted its expectations for Fed rate hikes. CME Group’s FedWatch Tool shows 71% of traders believe the Central Bank will raise rates by 0.25% in March. That’s a reversal from 89% who expected a 0.5% rate increase one month ago.
Continue Reading -->Coffee With Greta: S&P Falls Into Correction 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: +196 (+0.6%) SPX Futures: +28 (+0.6%) NASDAQ Futures: +135 (+0.9%) Good morning friends! Futures are bouncing back after the S&P slipped into correction territory for the first time in nearly two years. Let’s get right to it! S&P 500 Falls into Correction The S&P 500 closed in correction Tuesday for the first time in nearly two-years. The index ended the session down 1% at 4,304. That’s down more than 10% from the last record close at 4,796 on January 3, 2022. It’s the first time the S&P has been in a correction since February 27, 2020. Russia Invades Ukraine President Biden declared that Russia’s latest movement into eastern Ukraine is “the beginning of a Russian invasion.” Biden announced economic sanctions against Russia after Moscow moved troops into Ukraine’s Donbas region. The U.S. is also increasing its troop presence in the Baltics in what Biden called a “defensive measure”. The White House is working with Germany to ensure the Nord Stream 2 pipeline project does not move ahead. In an address with Secretary of State Antony Blinken, Ukraine’s Foreign Minister called on the world to “hit Russia’s economy now and hit it hard”. Russian President Putin threatened war against Ukraine in a nationwide address, unless Kyiv abandons its desire to join NATO. Ukrainian President Volodymyr Zelenskyy has activated reservists in response to the Russian troop movement but has not ordered a full military mobilization. Russia-linked stocks fell sharply amid the conflict, the VanEck Russia ETF (RSX) closed 8.9% lower on Tuesday. Virgin Galactic Beats Q4 Expectations Virgin Galactic (SPCE) shares are up 3.3% ahead of the open after the company reported a smaller Q4 loss than expected. The space-tourism company lost $0.31 per share on $141,000 in revenue. That was better than consensus estimates for a loss of $0.35 per share. Although revenue fell short of expectations for $300,000, it was up sharply from zero revenue in Q4 2020. The CEO said, “We remain on track and on schedule to complete our enhancement program and launch commercial service later this year.” Teladoc Slips After Q4 Earnings Teladoc (TDOC) shares are down 0.8% in premarket trade after reporting a smaller Q4 loss than expected. The telemedicine company lost $0.07 per share on $554.2 million in revenue. Analysts had forecast a loss of $0.57 per share on $547 million in revenue. Teladoc forecast full-year sales growth between 25% to 30%, in-line with expectations. The stock is the third largest holding in Cathie Wood’s Ark Innovation ETF (ARKK), which is up 1.6% ahead of the open. Mortgage Rates Tumble as Rates Rise Mortgage application volume fell to the lowest level since December 2019 last week. The Mortgage Bankers Association reports total application volume tumbled 13.1%. Refinance applications were down 15% weekly and 56% compared to a year ago. New purchase applications fell 10% weekly and 6% annually. It was the third straight week of purchase applications falling. The average 30-year rate rose to 4.06% from 4.05%. Covid Cases Plummet 90% Data from Johns Hopkins University shows the U.S. is seeing an average of 84,000 new Covid cases per day. That’s down 90% from the record high of 800,000 per day on January 15. Hospitalizations are also down sharply. The latest seven-day average shows 66,000 patients hospitalized with Covid in the U.S., down from 159,000 on January 20. Average daily deaths have fallen below 2,000 after peaking at 2,600 on February 1. With cases falling, many states are switching to an endemic posture on policy. New York and California, two of the strictest states on Covid policy, both allowed their indoor mask mandates to expire. The CDC is expected to update its mask guidance soon. In Case You Missed It U.S. consumer confidence slipped this month amid continued inflation pressures. The Conference Board’s consumer confidence index fell to 110.5 from January’s downwardly revised 111.1. Confidence in current economic conditions rose to 145.1 from 144.5, expectations index fell to 87.5 from 88.8. Former President Trump’s new social media app Truth Social was #1 on the Apple (AAPL) app store Tuesday. Digital World Acquisition (DWAC) shares closed 10.2% higher. DWAC is the SPAC Trump Media & Technology Group is set to merge with to go public.
Continue Reading -->Coffee With Greta: Russia-Ukraine Intensifies
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: -126 (-0.4%) SPX Futures: -10 (-0.2%) NASDAQ Futures: -77 (-0.6%) Good morning friends! Futures are lower as tensions escalate between Russia and Ukraine. Let’s get right to it! Russian Forces Move In to Eastern Ukraine Russian President Vladimir Putin recognized the independence of the Dunetsk and Luhansk regions of eastern Ukraine on Monday. He then ordered Russian troops to enter those separatist regions, on what Putin claims is a “peacekeeping” mission. In response, President Biden ordered sanctions on both regions via an executive order. The U.K. also imposed economic sanctions against five Russian banks and three wealthy individuals. This escalation undermines U.S. willingness to work toward a diplomatic solution. Biden had previously agreed to meet with Putin in a summit with French President Emmanuel Macron, if Russia did not invade Ukraine. Secretary of State Antony Blinken is slated to meet with Ukrainian Foreign Minister Dmytro Kuleba today. Gas Prices Hit 8-Year High Gas prices are continuing to rise as oil prices surge on the Russia-Ukraine tensions. Data from AAA shows the national average has surged to an 8-year high of $3.53 per gallon. More price increases are likely on the way with oil continuing to balloon. West Texas Intermediate Crude futures are up 3.1%, nearing $94 per barrel. Crypto Drops Cryptocurrency prices are down as traders sell-off risk assets amid the Russia-Ukraine tensions. Bitcoin hit a more than two-week low at $36,370 this morning but is now back above $37,500. Ethereum is trading around $2,500 while Dogecoin is at $0.13. Home Depot Beats Q4 Expectations Home Depot (HD) shares are down 3.1% in premarket trade despite beating Q4 expectations on the top and bottom line. The home improvement retailer reported earnings of $3.21 per share on $35.72 billion in revenue. That beat analysts’ expectations for EPS of $3.18 on $34.87 billion in revenue. Home Depot’s global same-store sales surged 8.1% year-over-year while U.S. same-store sales jumped 7.6%. The company forecast growth this fiscal year in-line with expectations. The board approved a 15% quarterly dividend increase to $1.90 per share. Macy’s Pops on Earnings Beat Macy’s (M) shares are up 6.3% ahead of the open after strong Q4 earnings. The department store reported adjusted earnings of $2.45 per share on $8.67 billion in revenue. That was better than analysts’ forecasts for EPS of $2 on $8.47 billion in revenue. Same-store sales surged 27.8% year-over-year and 6.1% compared to 2020. Macy’s fiscal 2022 forecast was also stronger than expected. Finally, the company announced a $2 billion stock repurchase program and hiked its dividend by 5%. Are Home Prices Still Rising? The December S&P Case-Shiller home price index prints at 9:00 a.m. ET. Buyers are hopeful this report will show a continued slowdown in the pace of home price growth. Rising mortgage rates are further squeezing buyers who were already being pressured by high prices. The average 30-year contract rate rose above 4% last week for the first time since 2019. But economists say prices will not fall anytime soon, as demand continues to far outpace supply. How Are Consumers Feeling About Inflation? The Conference Board releases its February consumer confidence index at 10:00 a.m. ET. Consensus estimates show the survey falling more than 4 points to 109.5 this month. Consumers have been squeezed by surging inflation as the CPI hit a fresh 40-year high in January. The market is also eyeing more inflation data this week, with the PCE index scheduled to be released Friday. The Core PCE is the Fed’s preferred measure of inflation. In Case You Missed It U.K. Prime Minister Boris Johnson lifted all remaining Covid restrictions in the country Monday. Those who test positive will no longer be legally required to isolate for 10 days. Free mass testing will also end April 1. The decision came just a day after the Queen tested positive.
Continue Reading -->Coffee With Greta: Roku’s BIG Revenue Miss
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: +42 (+0.1%) SPX Futures: +7 (+0.1%) NASDAQ Futures: +23 (+0.2%) Good morning friends! Futures are slightly higher after the market tumbled Thursday with the Dow suffering its worst drop of 2022. Let’s get right to it! Roku Plunges After Disappointing Q4 Roku (ROKU) shares are tumbling 27.2% ahead of the open after the company reported slower than expected revenue growth. Roku reported adjusted earnings of $0.17 per share on $865.3 million in revenue. Earnings were ahead of consensus but revenue fell short of analysts’ estimates for $894 million. Roku’s sales rose 33% year-over-year, a sharp slowdown from 51% in Q3 and 81% growth in Q2. The company expects that slowdown to continue. Roku forecast Q1 revenue of $721 million, implying 25% growth. The stock is the second largest holding in Cathie Wood’s Ark Innovation ETF (ARKK). ARKK is down 2.3% in premarket trade. St. Louis Fed President Reiterates Hawkish Stance St Louis Fed President James Bullard warned the U.S. is at risk of “out of control” inflation. In a panel discussion at Columbia University, Bullard repeated his calls to “front-load” rate hikes with a full percentage increase by July 1. He said, “the Fed should move faster and more aggressively than we would have in other circumstances.” CME Group’s FedWatch Tool now shows 69% of traders expect a 0.25% rate hike at the March meeting, 93% expected a 0.5% hike just a week ago. Russia-Ukraine Tensions Escalate The market is continuing to monitor the tensions between Russia and Ukraine as the U.S. calls for a diplomatic solution. Ukraine has accused pro-Russian rebels of attacking a village near the border on Thursday. Russia is continuing to demand the removal of all NATO and U.S. troops from Eastern Europe. President Biden told reporters Thursday it appears Russia is engaged in a “false flag operation” and it is likely Moscow will invade Ukraine “in the next several days”. The VanEck Russia ETF (RSX) tumbled 5.2% on Thursday and is down 1.9% ahead of the open. Senate Avoids Government Shutdown The Senate passed a short-term funding bill in a 65-27 vote Thursday to avoid a government shutdown today. The legislation will now be signed by Biden and maintains current funding levels through March 11. Lawmakers are now hoping to agree on a long-term spending bill which would fund the government through the end of the fiscal year on September 30. Existing Home Sales Preview The National Association of Realtors reports existing home sales for January at 10:00 a.m. ET. Consensus estimates are for sales to fall to a seasonally adjusted annual rate of 6.10 million units from 6.18 million in December. Homebuyers have been squeezed by high prices due to low supply with demand at record highs. Rising mortgage rates have made that affordability issue worse. No Trading Monday Next week will be shortened for traders as the markets are closed Monday in observance of Washington’s Birthday. There will be no Coffee with Greta that morning but I’ll be back in your inbox Tuesday morning! In Case You Missed It Ford’s (F) Mustang Mach-E beat out Tesla’s (TSLA) Model 3 as Consumer Reports’ top EV pick in 2022. The group said the Mach-E is better when it comes to self-driving and ensuring the driver remains alert. Tesla fell seven spots to 23rd out of 32 major auto brands on the list.
Continue Reading -->Coffee With Greta: Walmart Pops, Nvidia Slips
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: -121 (-0.4%) SPX Futures: -20 (-0.4%) NASDAQ Futures: -78 (-0.5%) Good morning friends! Futures are lower as the market digests some key earnings. Let’s get right to it! Walmart Pops on Strong Earnings Walmart (WMT) shares are up 1.5% ahead of the open after the retailer beat Q4 expectations on the top and bottom line. The company reported adjusted earnings of $1.53 per share on $152.87 billion in revenue. That beat analysts’ expectations for adjusted EPS of $1.50 on $151.53 billion in revenue. Walmart’s earnings show the retailer had a strong performance over the holidays. Same-store sales in the U.S. rose 5.6%, in-line with expectations. Walmart hiked its quarterly dividend to $0.56 per share and said it plans to repurchase $10 billion of its stock in fiscal 2023. Nvidia Crushes Q4 Expectations Nvidia (NVDA) shares are down 2% in premarket trade despite reporting a record-breaking fourth quarter. The chipmaker reported adjusted earnings of $1.32 per share on $7.64 billion in revenue. That was higher than analysts’ expectations for EPS of $1.22 on $7.42 billion in revenue. Nvidia’s profits were up 69% year-over-year, while revenue jumped 53%. The company’s gaming business remains its biggest revenue generator. Sales in that division rose 37% year-over-year to $3.42 billion in Q4, driven by sales of its GeForce graphics processors. Nvidia’s data center sales jumped 71% annually to $3.26 billion, while professional visualization sales surged 109% to $643 million. Automotive chip sales fell 14% year-over-year to $125 million amid continued supply constraints for global automakers. The company also had strong Q1 guidance, forecasting $8.10 billion in sales vs the consensus estimate for $7.29 billion. Nvidia also has $9 billion in long-term supply obligations, up from $2.54 billion a year ago. DoorDash Users Hit Record-High DoorDash (DASH) shares are surging 21.5% ahead of the open after reporting record-high user numbers in Q4 even as restaurants reopened. The delivery app reported a steeper profit loss than expected, at $0.45 per share vs the $0.25 loss analysts were expecting. But $1.3 billion in revenue came in higher than estimates for $1.28 billion. The company’s gross-order value jumped 36% year-over-year to $11.2 billion. That was ahead of analysts’ projections for $10.6 billion. DoorDash also had 369 million total orders last quarter vs consensus estimates for 361 million. The company forecast gross-order value this year will range between $48 billion and $50 billion, in-line with analysts’ projections of $49.4 billion. Weekly Jobless Claims Rise Unexpectedly The Labor Department reported 248,000 Americans filed initial claims for unemployment benefits last week. That was up 23,000 from the previous week and higher than expectations for claims to fall to 218,000. It’s the first time claims have risen in a month. Continuing jobless claims fell more than expected to 1.59 million down about 26,000 from the previous week and better than expectations for 1.62 million. Housing Construction Stumbles U.S. home construction pulled back in January as builders struggle with supply chain issues. The Census Bureau reported housing starts fell 4.1% at the beginning of the year, to a seasonally adjusted annualized rate of 1.638 million units. That was a steeper drop than economists’ expectations for a SAAR of 1.69 million units. Single-family starts tumbled 5.6% while multi-family starts fell 2.1%. But permitting activity beat expectations, signaling the pullback in homebuilding may be short-lived. New permits approved in January were at an SAAR of 1.899 million, up 0.7% from December and higher than economists’ forecasts for 1.75 million. Homebuilder sentiment fell 1 point on Wednesday to 82, declining for the second straight month as builders struggle with supply. The average size of a 30-year mortgage in the U.S. also hit a new record high at $453,000 this week. And the average 30-year mortgage rate popped above 4% for the first time since 2019. Higher rates are expected to squeeze more buyers out of the market who are already struggling with high prices. In Case You Missed It The Fed’s January meeting minutes told us what we already know, the bank is ready to raise rates and shrink its balance sheet. But the readout didn’t provide much detail about how many rate hikes officials expect this year. FOMC participants agreed this tightening cycle should be faster than the last and said they will assess moves on a meeting-by-meeting basis. The VanEck Oil Services ETF (OIH) jumped to the highest level in more than two years Wednesday as tensions simmer between Russia and Ukraine. The fund closed 2.3% higher at $248.54 and is up 34.5% YTD. The jump in energy prices comes amid continued tensions between Russia and Ukraine. U.S. officials confirmed Thursday that Russia had increased its troop presence at the Ukraine border by 7,000 in recent days. That contradicts Moscow’s previous claim it was pulling troops back.
Continue Reading -->Coffee With Greta: Inflation Boosts Retail Sales
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: -45 (-0.1%) SPX Futures: -8 (-0.2%) NASDAQ Futures: -38 (-0.3%) Good morning friends! Futures are flat as the market digests a strong retail sales report. Let’s get right to it! Retail Sales Surge Amid Hot Inflation The Census Bureau reported retail sales rose 3.8% in January, beating expectations for a 2.1% increase. Core retail sales, which excludes auto and gas sales, jumped 3.3% vs expectations for 0.8%. The beat comes despite inflation soaring to a 40-year high in January, when the CPI surged 7.5%. Since the data is not adjusted for inflation, those surging prices helped boost the sales total to $649.8 billion, as Americans paid more for most goods. Retail sales were 13% higher compared to January 2021 December’s sales were revised lower to show a 2.5% drop from the previous 1.9% decline. Roblox Tumbles on Earnings Miss Roblox (RBLX) shares are dropping 17.2% ahead of the open after the online gaming company reported a steeper Q4 loss than expected. Roblox reported an adjusted loss of $0.25 per share on $568.8 million in revenue. But analysts had forecast a per share loss of just $0.12. Roblox’s bookings also fell short at $770.1 million vs expectations for $772 million. The company defines bookings as “revenue plus the change in deferred revenue during the period and other non-cash adjustments.” This is an important metric because Roblox games use the digital currency Robux for transactions between players, which may be considered “deferred revenue”. The company did report strong user growth. Average Daily Active Users jumped 33% year-over-year to 49.5 million in Q4. In January, DAUs were already up to 54.7 million. “With nearly 55 million daily active users, Roblox is increasingly an integral part of people’s lives,” said the CEO. “As we look ahead to 2022, we will continue to develop our technology to enable deeper forms of communication, immersion and expression on our platform.” Airbnb Pops on Strong Guidance Airbnb (ABNB) shares are up 2.9% in premarket trade after Q4 earnings and Q1 guidance both beat expectations. The company reported earnings of $0.08 per share on $1.53 billion in revenue. That beat analysts’ expectations for EPS of $0.03 on $1.46 billion in revenue. Airbnb’s strong performance came as bookings continued to rebound from the pandemic. The company said average trip lengths have increased by 15% in the past two years, as remote work becomes more permanent for many in the U.S. Stays of more than seven days now represent nearly half of all gross bookings. Airbnb expects Q1 2022 bookings to exceed Q1 2019 levels. The company also forecast revenue between $1.41 billion and $1.48 billion this quarter, topping consensus estimates for $1.24 billion. High Lumber Prices May Weigh on Homebuilders The National Association of Homebuilders releases its February sentiment index at 10:00 a.m. ET. That survey is expected to slip to 82 this month from 83 in January. Homebuilders have benefited from strong demand and short supply in the housing market. But high costs have weighed on their business. And lumber prices are climbing again after cooling last summer. CNBC reported that lumber prices are three times higher than average pre-pandemic levels. The NAHB has estimated those high prices have added more than $18,600 to the price of a new single-family home. Fed Minutes Ahead The Federal Reserve releases the minutes of its January meeting at 2:00 p.m. ET today. The market is eyeing this report to get more clarity on the Central Bank’s plans to tighten monetary policy. With the CPI hitting a 40-year high and the PPI remaining at a record high in January, many analysts have raised their rate hike expectations for the year. The market has priced in as many as seven rate hikes this year. CME Group’s FedWatch Tool shows 57.9% of traders expect the March rate hike to be 0.5% instead of 0.25%. In Case You Missed It President Biden expressed cautious optimism about Russia pulling troops back from the Ukraine border on Tuesday. In a speech at the White House, Biden said the U.S. is prepared to defend NATO members if needed. He reiterated America’s commitment to Ukraine’s sovereignty. Biden said he has made it clear to Russia that the U.S. “will respond” forcefully if Russia targets Americans or Ukraine. Marriott International (MAR) shares closed at a new record $181.20 per share after strong Q4 earnings Tuesday. The hotel chain beat expectations on both the top and bottom line last quarter. Revenue more than doubled year-over-year as leisure bookings bounced back. Marriott said it expects business demand to continue rebounding as the economy recovers.
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