Coffee With Greta: Strong Consumer
Register now for tomorrow’s free Q&A event on LinkedIn with Scott Redler! DJIA Futures: -250 (-0.7%) SPX Futures: -26 (-0.6%) NASDAQ Futures: -71 (-0.5%) Good morning friends! Futures are falling as traders digest the latest economic data and earnings. Let’s get right to it! Retail Sales Jump U.S. retail sales rose more than expected in July. The Commerce Department reported retail sales rose 0.7% last month to $696.4 billion. That was stronger than expectations for sales to increase 0.4%. Excluding autos, retail sales jumped 1% vs 0.4% expected. That number was boosted by a 1.9% increase in online spending, as Amazon (AMZN) Prime Day fell during the month. Spending at sporting goods stores rose 1.5% with spending at restaurants and bars up 1.4%. Furniture store sales dropped 1.8% and electronics and appliance store sales fell 1.3%. Sales at gas stations rose just 0.4% despite higher prices. Home Depot Sales Slide Home Depot (HD) shares are down 0.8% ahead of the open despite beating Q2 expectations as sales dropped year over year. Here’s how the home improvement retailer’s results compared to analysts’ estimates: EPS: $4.65 vs $4.45 expected Revenue: $42.92 billion vs $42.23 billion expected It was the first revenue beat in three quarters but sales were down 2% year over year. Home Depot reiterated its full-year forecast, expecting sales to decline 2% to 5% from a year ago. The CFO said the company has seen “continued caution on the part of consumers when it comes to larger ticket, more discretionary spending.” Home Depot also announced its board of directors approved $15 billion in share buybacks. Fitch Warns About Bank Downgrades Bank stocks are falling in premarket trade after an analyst at Fitch Ratings warned the agency may be forced to downgrade dozens of banks. The Financial Select Sector SPDR ETF (XLF) is down 0.9% in premarket trade with the SPDR S&P Regional Banking ETF (KRE) down 1.7%. Fitch cut the U.S. banking industry’s operating environment score from AA+ to AA- back in June. If that rating is downgraded again, Fitch would be forced to reevaluate ratings on each of the more than 70 banks it covers. That could include the country’s two largest banks, JPMorgan Chase (JPM) and Bank of America (BAC). JPM shares are down 1.5% ahead of the open with BAC shares falling 1.8%. Coming Up: Homebuilder Sentiment The National Association of Homebuilders releases its August sentiment index at 10:00 a.m. ET. Economists expect that index to rise to 57 from 56 in July. Confidence among builders has been rising in recent months as they see higher demand from buyers who are struggling with low supply of existing homes for sale.
Continue Reading -->Coffee With Greta: Spotlight On Retailers
Register now for Wednesday’s free Q&A event on LinkedIn with Scott Redler! DJIA Futures: -48 (-0.1%) SPX Futures: -10 (-0.2%) NASDAQ Futures: -29 (-0.2%) Good morning friends! Futures are slipping as traders gear up for a big week focused on retailers and consumers. Let’s get right to it! Retailers In Focus This week’s economic data and earnings will be all about U.S. retailers and consumers. The Commerce Department reports retail sales for July Tuesday morning. Economists’ expectations are for both headline and core retail sales to rise 0.4% monthly. Major retail earnings also start on Tuesday morning, here are the highlights: Tuesday AM: Home Depot (HD) Wednesday AM: Target (TGT). TJX Companies (TJX) Thursday AM: Walmart (WMT) Thursday PM: Ross Stores (ROST) This data will give traders more insight into the strength of the U.S. consumer amid the Fed’s fight against inflation. U.S. Steel Surges United States Steel Corp. (X) shares are surging 27.7% ahead of the open after rejecting a $7.3 billion buyout proposal from rival Cleveland-Cliffs Inc (CLF). U.S. Steel said it is reviewing “strategic alternatives” after it received several unsolicited offers. It rejected the Cleveland-Cliffs offer because they were pushing it to accept the deal without being allowed to conduct proper due diligence. U.S. Steel’s CEO said in a letter to Cleveland-Cliff’s CEO, “At this juncture, we cannot determine whether your unsolicited proposal properly reflects the full and fair value of the Company. For all of the above reasons, the Board has no choice but to reject your unreasonable proposal.” Tesla Cuts Prices In China Tesla (TSLA) shares are slipping 3% in premarket trade after cutting prices again in China. The electric automaker lowered prices for the long-range and performance versions of the Model Y in China by about $2,000 over the weekend. A long-range Model Y now starts at $41,400 in China vs $49,400 at the start of 2023. The performance version now starts at $48,300 vs $55,000 at the beginning of the year. Tesla also rolled out a new $1,100 incentive for certain Model 3 sedans in the country. Nikola Drops On Recall Announcement Nikola (NKLA) shares are tumbling 17.5% ahead of the open after announcing a recall related to battery issues. The electric truck maker issued a voluntary recall for 209 of its Class 8 Tre electric trucks after an investigation into the battery packs. Nikola said the recall is a “precautionary measure” and it will pause new sales of its battery-electric vehicles “temporarily”. A third party investigator, Exponent, determined a coolant leak inside of a battery pack was the likely cause of a truck fire in June 2023. The company said, “Internal investigations from Nikola’s safety and engineering teams indicate a single supplier component within the battery pack as the likely source of the coolant leak and efforts are underway to provide a field remedy in the coming weeks.”
Continue Reading -->Coffee With Greta: Wholesale Inflation Surprise
Register now for next week’s free Q&A event on LinkedIn with Scott Redler! DJIA Futures: -80 (-0.2%) SPX Futures: -17 (-0.4%) NASDAQ Futures: -107 (-0.7%) Good morning friends! Futures are falling after the release of hotter-than-expected inflation data. Let’s get right to it! Wholesale Inflation Runs Hot Wholesale inflation pressures rose more than expected in July. The Bureau of Labor Statistics’ producer price index rose 0.3% monthly and 0.8% year over year. That was higher than economists’ expectations for +0.2% monthly and +0.7% annually. The core PPI was also hotter than expected, up 0.3% monthly and 2.4% year over year. Economists were expecting the core PPI to rise 0.2% monthly and 2.4% annually. The PPI gauges the costs that goods and services producers receive for their products. It is a leading indicator for CPI as retailers, restaurants, and other businesses then pass down those costs to consumers in their prices. Yields Jump After PPI Treasury yields are rising after the release of that hotter-than-expected PPI data. The 2-year yield is up 4 basis points to 4.88% while the 10-year yield is up 2 basis points to 4.14%. This week’s inflation data is key in the Fed’s fight against inflation. The Central Bank has vowed to be data-dependent at the September meeting with the door open for another 25 basis point rate hike if needed. CME Group’s FedWatch Tool currently shows 88.5% of traders expecting the Fed to keep rates unchanged at that meeting. Chip Stocks Fall Chip stocks are continuing to pullback ahead of the open following the Biden Administration’s new investment ban in China. The VanEck Semiconductor ETF (SMH) is down 1.2%. Nvidia (NVDA) shares are falling 1.4% with Advanced Micro Devices (AMD) down 1.1%. The President signed an executive order this week to regulate new U.S. investments in China. The order targets semiconductors and microelectronics, quantum computing, and certain AI capabilities. The restrictions are expected to be implemented next year.
Continue Reading -->Coffee With Greta: Soft Inflation
Register now for next week’s free Q&A event on LinkedIn with Scott Redler! DJIA Futures: +93 (+0.3%) SPX Futures: +13 (+0.3%) NASDAQ Futures: +94 (+0.6%) Good morning friends! Futures are higher after a soft July inflation report. Let’s get right to it! Cooling CPI Inflation pressures came in cooler than expected in July. The Bureau of Labor Statistics’ consumer price index rose 0.2% monthly and 3.2% year over year. That was better than expectations for a 3.3% annual gain but a tick up from 3% in June. Food and shelter prices contributed the most to that gain. Grocery prices rose 3.6% annually, restaurant prices jumped 7.1%, and shelter prices were up 7.7%. Gas prices were down 19.9% from a year ago with oil prices down 26.5%. The core CPI rose 0.2% monthly and 4.7% annually. That was better than expectations for 4.8% annually and marked the slowest annual increase since October 2021. Weekly Jobless Claims Rise Weekly jobless claims jumped more than expected last week. The Labor Department reported 248,000 Americans filed initial claims for unemployment benefits. That was up by 21,000 from the previous week and higher than 230,000 expected. That was the highest level since the week ending July 1. Continuing claims fell by 8,000 to 1.64 million in the week ending July 29. Disney Profits Beat Walt Disney (DIS) shares are up 1.8% ahead of the open after reporting mixed fiscal Q3 results. Here’s how the entertainment giant’s results compared to analysts’ estimates: Adjusted EPS: $1.03 vs $0.95 expected Revenue: $22.33 billion vs $22.5 billion expected Disney+ subscriptions: 146.1 million vs 151.1 million expected Revenue was up 4% year over year but Disney+ subscribers dropped 7.4% from the previous quarter. Due to those struggles in the streaming business, Disney announced it will raise the price on its ad-free Disney+ tier in October and crackdown on password sharing. The parks, experiences, and products division was a bright spot for the company as revenue jumped 13% year over year to $8.3 billion. CEO Bob Iger said, “Moving forward, I believe three businesses will drive the greatest growth and value creation over the next five years. They are our film studios, our parks business and streaming, all of which are inextricably linked to our brands and franchises.” Alibaba Beats Expectations Alibaba (BABA) shares are up 3.6% in premarket trade after beating quarterly expectations on the top and bottom line. Here’s how the Chinese e-commerce giant’s results compared to analysts’ estimates: Net income: 34.33 billion yuan vs 28.66 billion yuan expected Revenue: 234.16 billion yuan vs 224.92 billion yuan expected Revenue in Alibaba’s main business jumped 12% year over year. International commerce retail revenue surged 60% from a year ago as Alibaba makes efforts to expand overseas. The cloud business – which Alibaba has previously said it plans to publicly list – saw revenue growth of 4%. The CEO said, “Alibaba delivered a solid quarter as we continue to execute our Reorganization, which is beginning to unleash new energy across our businesses.”
Continue Reading -->Coffee With Greta: Rebound Attempt
Register now for today’s free Q&A event on LinkedIn with me and T3 professional trader Brandt Hersh! DJIA Futures: +30 (+0.1%) SPX Futures: +7 (+0.2%) NASDAQ Futures: +24 (+0.2%) Good morning friends! Futures are up slightly as the market looks to rebound. Let’s get right to it! Rivian Tops Expectations, Hikes Production Guidance Rivian (RIVN) shares are down 1.4% ahead of the open despite beating Q2 expectations and raising its full-year production target. Here’s how the electric automaker’s results compared to analysts’ estimates: Loss per share: $1.08 vs $1.41 expected Revenue: $1.12 billion vs $1 billion expected Rivian delivered 12,640 vehicles during the second quarter, up 59% from Q1. The EV maker said it had $10.2 billion in cash on hand at the end of the quarter while capital expenditures decreased on a quarterly basis. The company now expects to build about 52,000 vehicles this year, up from previous guidance for 50,000. SMCI Drops On Weak Outlook Super Micro Computer Inc (SMCI) shares are tumbling 14.8% in premarket trade after beating Q4 expectations but issuing weak guidance. Here’s how the server company’s results compared to analysts’ estimates: Adjusted EPS: $3.51 vs $2.91 expected Revenue: $2.18 billion vs $1.98 billion expected But SMCI expects a spending surge to support AI technology. That contributed to the lower forecast. The company expects Q1 adjusted EPS of $2.75 to $3.50 on revenue of $1.9 billion to $2.2 billion. Analysts were estimating adjusted EPS of $3.21 on $2.2 billion in revenue. Lyft Slips Despite Beat Lyft (LYFT) shares are falling 6.1% ahead of the open despite beating Q2 expectations on the top and bottom line. Here’s how the ride-hailing service’s results compared to analysts’ estimates: Adjusted EPS: $0.16 vs $0.01 loss expected Revenue: $1.021 billion vs $1.02 billion expected Lyft forecast Q3 revenue between $1.13 billion and $1.15 billion vs $1.09 billion expected. The company said, “We saw momentum across use cases, however commute and early-morning trips were standouts, growing by just over 20% year over year. And we had our highest volume of quarterly airport rides since 2019.” Active-riders rose 8% to 21.5 million in the quarter but revenue per ride fell as the company cut prices to attract riders. Roblox Losses Widen Roblox (RBLX) shares are down 8.1% in premarket trade after reporting a larger Q2 loss than expected. Here’s how the video game company’s results compared to analysts’ estimates: Loss per share: $0.46 vs $0.45 expected Bookings: $781 million vs $785 million expected Bookings were up 22% year over year. Roblox reported 65.5 million average daily active users during the quarter, up 25% from a year ago. Those users spent more than 14 billion hours engaged in Roblox, up 24%. Roblox said it expects to continue to report losses for the “foreseeable future.” Mortgage Demand Drops Mortgage demand dropped again last week as rates surged. The Mortgage Bankers Association reported total application volume dropped 3.1% weekly. Purchase applications fell 3% weekly and 27% year over year while refinance applications fell 4% weekly and 37% annually. The average 30-year fixed contract rate jumped to 7.09% from 6.93%. The FHA rate hit 7.02%, the highest since 2002. The higher rates came as Treasury yields rose last week, mortgage rates follow the 10-year yield.
Continue Reading -->Coffee With Greta: Trouble For Banks
Register now for tomorrow’s free Q&A event on LinkedIn with T3 professional trader Brandt Hersh! DJIA Futures: -244 (-0.7%) SPX Futures: -31 (-0.7%) NASDAQ Futures: -107 (-0.7%) Good morning friends! Futures are slipping with bank stocks under pressure. Let’s get right to it! Small Banks Downgraded Both big and small bank stocks are falling ahead of the open after Moody’s cut the credit ratings of several U.S. banks late Monday. The SPDR S&P Regional Banking ETF (KRE) is down 2.8% while the Financial Select Sector SPDR ETF (XLF) is down 1.2%. The downgraded banks included M&T Bank (MTB), Pinnacle Financial (PNF), BOK Financial (BOKF) , and Webster Financial (WBS). Bank of New York Mellon (BK), U.S. Bancorp (USB), State Street (STT), Truist Financial (TFC), Cullen/Frost Bankers (CFR), and Northern Trust (NTRS) are now all under review for a potential downgrade. The firm also changed its outlook to negative for 11 banks, including Capital One (COF), Citizens Financial (CFG), and Fifth Third Bancorp (FITB). Moody’s analysts said, “U.S. banks continue to contend with interest rate and asset-liability management (ALM) risks with implications for liquidity and capital, as the wind-down of unconventional monetary policy drains systemwide deposits and higher interest rates depress the value of fixed-rate assets.” Palantir Drops Despite Strong Guidance Palantir Technologies (PLTR) shares are down 1.1% in premarket trade after reporting Q2 results that were in line with expectations and issuing strong guidance. Here’s how the data-analytics company’s results compared to analysts’ estimates: Adjusted EPS: $0.05 as expected Revenue: $533 million as expected Revenue jumped 13% year over year. Palantir forecast Q3 revenue between $553 million and $557 million vs $552 million expected. The midpoint of that guidance suggests 16% year over year growth. The company expects full-year revenue of over $2.212 billion vs $2.209 billion expected. The CEO wrote in a letter to shareholders, “We anticipate that we will become eligible for inclusion in the S&P 500 after we report our financial results for Q3 2023 in early November. At that point, we will have been profitable on a cumulative basis over the preceding four quarters.” Lucid Slips On Revenue Miss Lucid Group (LCID) shares are down 0.2% ahead of the open after missing Q2 expectations. Here’s how the electric automaker’s results compared to analysts’ estimates: Loss per share: $0.40 vs $0.33 expected Revenue: $150.9 million vs $175 million expected Lucid delivered just 1,404 of its Air sedans during the quarter, about 600 fewer than analysts expected. It was also down from the 1,406 delivered in Q1. Lucid said it has begun to ship vehicles to Saudi Arabia after the country’s Ministry of Finance agreed last year to buy at least 50,000 and up to 100,000 EVs from the company over the next decade. The CFO said the company ended Q2 with $6.25 billion in available liquidity, enough to last into 2023. Lucid reaffirmed its previous production guidance, expecting to produce “over 10,000” vehicles this year. UPS Cuts Forecast United Parcel Service (UPS) shares are falling 3.9% in premarket after reporting mixed Q2 results and cutting its outlook. Here’s how the shipping giant’s results compared to analysts’ estimates: Adjusted EPS: $2.54 vs $2.50 expected Revenue: $22.1 billion vs $23.1 billion expected Revenue dropped 11% year over year as average daily package volume in the U.S. tumbled 9.9%. UPS forecast full-year revenue of $93 billion and operating margins around 11.8%, that was down from previous guidance for $97 billion and 12.8% respectively. Part of the lower guidance is due to the new labor contract agreed to between UPS and the Teamsters Union. The CEO said, “We will stay on strategy to capture growth in the most attractive parts of the market.” In Case You Missed It Tesla (TSLA) shares fell 1% on Monday after the electric automaker’s CFO stepped down. A regulatory filing showed he will step down effective Friday and be replaced by the current chief accounting officer. The departing CFO will remain with Tesla through the end of the year to help with the transition.
Continue Reading -->Coffee With Greta: New Week Bounce
Register now for this week’s free Q&A event on LinkedIn with T3 professional trader Brandt Hersh! DJIA Futures: +111 (+0.3%) SPX Futures: +19 (+0.4%) NASDAQ Futures: +85 (+0.6%) Good morning friends! Futures are higher as the market looks to rebound from a losing week. Let’s get right to it! Tyson Earnings Miss Tyson Foods (TSN) shares are dropping 7.9% ahead of the open after missing fiscal Q3 expectations on the top and bottom line. Here’s how the meat producer’s results compared to analysts’ estimates: Adjusted EPS: $0.15 vs $0.26 expected Revenue: $13.14 billion vs $13.63 billion expected Tyson’s CEO said, “While current market dynamics remain challenging, Tyson Foods is fully committed to our vision of delivering sustainable, top line growth and margin improvement.” Beef sales fell 5.3% during the quarter as prices rose 5.2%, pork sales fell 1.8% and prices tumbled 16.4%, chicken sales rose 2.8% and prices fell 5.5%, and prepared food sales fell 0.7% while prices fell 1.9%. Tyson forecast full-year sales between $53 billion to $54 billion, in line with analysts’ estimates for $53.7 billion. Inflation Week This is a key week for traders as the market awaits the latest inflation data. The Bureau of Labor Statistics releases the July consumer price index Thursday morning. Economists expect the annual CPI to increase to 3.3% from 3% in June with the core CPI falling to 4.7% from 4.8% in June. This report is part of the data the Fed is monitoring as it decides what to do at the September meeting. The PPI will be released Friday morning. Upcoming Earnings Second-quarter earnings season continues this week, here are some of the biggest reports set to be released: Monday PM: Lucid Group (LCID) Tuesday AM: UPS (UPS), Under Armour (UA) Tuesday PM: AMC Entertainment (AMC), Lyft (LYFT) Wednesday AM: Roblox (RBLX) Wednesday PM: Walt Disney (DIS) Thursday AM: Alibaba (BABA)
Continue Reading -->Coffee With Greta: Labor Market Slows
Register now for next week’s free Q&A event on LinkedIn with T3 professional trader Brandt Hersh! DJIA Futures: +27 (+0.1%) SPX Futures: +8 (+0.2%) NASDAQ Futures: +36 (+0.2%) Good morning friends! Futures are higher as traders assess the July jobs report and the latest big tech earnings. Let’s get right to it! Jobs Report Miss The U.S. economy added less jobs than expected in July, indicating slowing growth in the labor market. The Labor Department reported nonfarm payrolls grew by 187,000 last month vs 200,000 expected. It was a slight gain from the downwardly revised 185,000 in June. But the unemployment rate fell unexpectedly to 3.5% vs expectations for it to be unchanged at 3.6%. Average hourly earnings rose 0.4% monthly and 4.4% year over year, higher than 0.3% monthly and 4.2% annually expected. Apple Beats Apple (AAPL) shares are down 3% ahead of the open after beating fiscal Q3 expectations on the top and bottom line as hardware sales continued to slow. Here’s how the iPhone maker’s results compared to analysts’ estimates: EPS: $1.26 vs $1.19 expected Revenue: $81.80 billion vs $81.69 billion expected iPhone revenue: $39.67 billion vs $39.91 billion expected Mac revenue: $6.84 billion vs $6.62 billion expected iPad revenue: $5.79 billion vs $6.41 billion expected Other Products revenue: $8.28 billion vs $8.39 billion expected Services revenue: $21.21 billion vs $20.76 billion expected Gross margin: 44.5% vs 44.2% expected Total revenue was down 1% year over year, driven by slowing sales for the iPhone, Mac, and iPad. Apple’s sales in China jumped 8% year over year with CEO Tim Cook saying he’s seeing “definite acceleration” in the market. The company reported $166.5 billion in cash on hand, up slightly from Q2. Apple did not provide guidance. Amazon Crushes Expectations Amazon (AMZN) shares are jumping 9% in premarket trade after crushing Q2 expectations and issuing strong guidance. Here’s how the tech giant’s results compared to analysts’ estimates: EPS: $0.65 vs $0.35 expected Revenue: $134.4 billion vs $131.5 billion expected Amazon Web Services revenue: $22.1 billion vs $21.8 billion expected Advertising revenue: $10.7 billion vs $10.4 billion expected Overall revenue jumped 11% year over year, marking a return to double-digit growth. Ad revenue soared 22% from a year ago. Amazon forecast Q3 revenue between $138 billion and $143 billion, implying growth of 9% to 13%. That topped analysts’ estimates for $138.25 billion in revenue. Airbnb Bookings Slow Airbnb (ABNB) shares are falling 2.6% ahead of the open after reporting less bookings than expected in the second quarter. Here’s how the vacation rental site’s results compared to analysts’ estimates: EPS: $0.98 vs $0.78 expected Revenue: $2.48 billion vs $2.42 billion expected Revenue rose 18% year over year while gross bookings rose 12% to $19.1 billion vs $18.99 billion expected. But Airbnb reported 115.1 million nights and experiences booked during the quarter, less than 117.6 million expected. That marked 11% growth from a year ago, a slowdown from the 19% growth in Q1. Airbnb expected Q3 revenue between $3.3 billion and $3.4 billion, implying 14% to 18% growth. Nikola’s Losses Narrow, CEO Steps Down Nikola (NKLA) shares are falling 11.6% in premarket trade after missing Q2 sales expectations and announcing its CEO is stepping down. Here’s how the electric truckmaker’s results compared to analysts’ estimates: Loss per share: $0.20 vs $0.22 expected Revenue: $15.36 million vs $15.4 million expected The company said its CEO will step down effective immediately due to a “family health matter”. The current board chair will take over as CEO. The earnings report comes after Nikola won approval from shareholders on Thursday to issue new stock to raise more funds. Nikola delivered 45 battery-electric semitrucks to dealers during Q2 and dealers sold 66 of the trucks to customers, the company’s best quarterly retail result to date. The company said it began production of its longer-range fuel-cell powered semitruck on July 31 with deliveries expected to begin in September. The company currently has 202 orders for those longer-range trucks from 18 fleet customers.
Continue Reading -->Coffee With Greta: Waiting For AAPL, AMZN
Register now for next week’s free Q&A event on LinkedIn with T3 professional trader Brandt Hersh! DJIA Futures: -65 (-0.2%) SPX Futures: -14 (-0.3%) NASDAQ Futures: -84 (-0.5%) Good morning friends! Futures are slipping as Wall Street looks set to extend Wednesday’s losses and traders wait for big tech earnings after the close. Let’s get right to it! Weekly Jobless Claims Inch Higher Weekly jobless claims rose slightly last week in a continued sign of strength for the labor market. The Labor Department reported 227,000 Americans filed initial claims for unemployment benefits last week. That was up by 6,000 from the previous week and in line with expectations. Continuing claims rose by 21,000 to 1.7 million in the week ending July 22. Qualcomm Misses On Sales, Forecast Qualcomm (QCOM) shares are tumbling 9.2% ahead of the open after reporting mixed Q3 results and issuing weak guidance. Here’s how the chipmaker’s results compared to analysts’ estimates: Adjusted EPS: $1.87 vs $1.81 expected Revenue: $8.44 billion vs $8.5 billion expected Net income dropped 52% year over year. Qualcomm forecast Q4 EPS between $1.80 and $2 on revenue between $8.1 billion and $8.9 billion. Analysts were anticipating guidance of $1.91 in EPS on $8.7 billion in revenue. PayPal Margins Fall Short PayPal (PYPL) shares are dropping 8.8% in premarket trade after missing Q2 profit expectations and falling short on a key margin metric. Here’s how the digital payments company’s results compared to analysts’ estimates: Adjusted EPS: $1.13 vs $1.15 expected Revenue: $7.29 billion vs $7.27 billion expected PayPal reported an adjusted operating margin of 21.4% in the quarter, below its previous guidance for 22%. The company attributed that miss to lower than anticipated revenue in its credit portfolio. The CFO said PayPal expects continued pressure on transaction-margin performance in Q3 before conditions improve in Q4. Shopify Drops Shopify (SHOP) shares are down 3.5% ahead of the open despite beating Q2 expectations on the top and bottom line. Here’s how the e-commerce platform’s results compared to analysts’ estimates: Adjusted EPS: $0.14 vs $0.06 expected Revenue: $1.7 billion vs $1.63 billion expected Revenue was up 31% year over year. Gross merchandise volume also jumped 17% to $55 billion vs $53.5 billion expected. Shopify forecast Q3 revenue growth in the low 20s vs analysts’ estimates for 18% growth.
Continue Reading -->Coffee With Greta: U.S. Downgraded
Register now for today’s free Q&A event on LinkedIn with T3’s Senior Trader Derrick Oldensmith! DJIA Futures: -150 (-0.4%) SPX Futures: -27 (-0.6%) NASDAQ Futures: -127 (-0.8%) Good morning friends! Futures are falling after the U.S. credit rating was downgraded overnight. Let’s get right to it! Fitch Downgrades U.S. Global credit rating agency Fitch Ratings downgraded the United States to AA+ from AAA on Tuesday. Fitch cited “expected fiscal deterioration over the next three years” as the reason for that move after putting the U.S. on negative watch in May amid the debt ceiling fight. The agency said, “The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management.” This is only the second time the U.S. has been downgraded by a credit rating agency. S&P cut the nation’s rating from AAA to AA+ in 2011 amid a similar debt ceiling fight. Private Job Growth Booms The U.S. private sector added far more jobs than expected in July. ADP reported private employers added 324,000 jobs last month vs 175,000 expected. But it was still a slowdown from 455,000 in June. The services sector as a whole added 303,000 jobs, led by leisure and hospitality which gained 201,000. The goods producing sector added just 21,000 as natural resources and mining grew by 48,000 but manufacturing lost 36,000. The Labor Department releases the official July jobs report on Friday which is expected to show the economy added just 200,000 jobs with the unemployment rate unchanged at 3.6%. AMD Earnings Beat Advanced Micro Devices (AMD) shares up 2.5% ahead of the open after beating Q2 expectations on the top and bottom line. Here’s how the chipmaker’s results compared to analysts’ estimates: Adjusted EPS: $0.58 vs $0.57 expected Revenue: $5.36 billion vs $5.31 billion expected Despite the beat, revenue was down 18% year over year. AMD is seeing falling demand in its PC business but says it expects AI to boost its sales in the future. The company is one of few that makes the high-end graphics processing units needed for AI. AMD forecast Q3 revenue of $5.7 billion vs $5.81 billion expected by analysts. Starbucks Sales Disappoint Starbucks (SBUX) shares are falling 0.9% in premarket trade after missing Q2 sales expectations. Here’s how the coffee chain’s results compared to analysts’ estimates: Adjusted EPS: $1 vs $0.95 expected Revenue: $9.17 billion vs $9.29 billion expected Total same-store sales grew 10% year over year vs 11% expected. North American same-store sales also missed estimates, up 7% vs 8.4% expected. Pinterest Expenses Soar Pinterest (PINS) shares are dropping 4% ahead of the open despite beating Q2 expectations as expenses jumped sharply. Here’s how the social media company’s results compared to analysts’ estimates: Adjusted EPS: $0.21 vs $0.12 expected Revenue: $708 million vs $696 million expected Sales were up 6% year over year but total costs and expenses jumped 11%. Global monthly active users rose 8% year over year to 465 million during the quarter. Pinterest said it expects Q3 revenue growth “in the high single digits range year over year”. E.L.F. Surges e.l.f. Beauty (ELF) shares are surging 15.9% in premarket trade after beating fiscal Q1 expectations and hiking its outlook. Here’s how the beauty company’s results compared to analysts’ estimates: Adjusted EPS: $1.10 vs $0.57 expected Revenue: $216.3 million vs $185 million expected For fiscal 2024, Elf now expects between $792 million and $802 million in revenue vs $705 million to $720 million previously. The company forecast full-year adjusted EPS between $2.19 and $2.22 vs $1.73 to $1.76 previously. CVS Slips CVS Health (CVS) shares are down 2.2% ahead of the open despite beating Q2 expectations. Here’s how the pharmacy giant’s results compared to analysts’ estimates: Adjusted EPS: $2.21 vs $2.11 expected Revenue: $88.9 billion vs $86.5 billion expected Net income dropped 37% year over year while revenue rose 10%. CVS maintained its full-year outlook as it continues cost cutting efforts. In Case You Missed It Ford Motor (F) shares rose 1.6% on Tuesday after the automaker reopened its F-150 Lightning factory. The facility had been closed for six weeks for upgrades. Ford also said recent price cuts on the Lightning had significantly increased demand. The EV unit’s chief customer officer said the company has “about 45 days’ worth” of orders for the electric truck. Job openings fell unexpectedly in June. The Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) released on Tuesday showed there were 9.58 million available jobs for the month. That was a decrease from the downwardly revised 9.62 million in May and lower than 9.7 million expected. It was the lowest level of job openings since April 2021. Layoffs also fell to 1.53 million in June from 1.55 million in May.
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