Coffee With Greta: After The Fed
Register now for next week’s free Q&A with pro trader Patrick Hawe on LinkedIn! DJIA Futures: -42 (-0.1%) SPX Futures: -14 (-0.3%) NASDAQ Futures: -77 (-0.5%) Good morning friends! Futures are lower as traders digest Wednesday’s Fed decision and new economic data. Let’s get right to it! Two More Rate Hikes The Federal Reserve skipped a rate hike as expected on Wednesday but surprised traders with a more hawkish summary of economic projections. The Federal Open Market Committee voted to keep rates unchanged at the current range of 5% to 5.25%. Chairman Jerome Powell said the bank would use the next six weeks to “take into account the cumulative tightening of monetary policy.” The Fed’s updated dot plot showed a terminal rate of 5.6% in 2023 which indicates two more 25bps rate hikes. CME Group’s FedWatch Tool shows over 69% of traders betting on a rate hike at the July meeting May Retail Sales Beat Forecasts U.S. retail sales rose unexpectedly in May. The Commerce Department reported retail sales jumped 0.3% to $686.6 billion. That beat expectations for sales to fall 0.2%. Sales at car dealers rose 1.4% while sales at building material stores jumped 2.2%. Gas stations saw the largest decrease, with sales falling 2.6%. Retail sales excluding autos rose 0.1%, as expected. Weekly Jobless Claims Jump Weekly jobless claims rose unexpectedly last week. The Labor Department reported 262,000 Americans filed initial claims for unemployment benefits. That was up by 1,000 from the previous week and higher than 250,000 expected. Continuing claims also rose by 18,000 to 1.78 million in the week ending June 3. Mixed Manufacturing Data Two key manufacturing indexes show mixed activity across the country. The Empire State manufacturing index rose sharply this month to 6.6 from -13.8% in May. That beat economists’ expectations for the index to fall to -15. But the Philly Fed Manufacturing index fell further to -13.8 from -10.4 in May. That was in line with estimates. In Case You Missed It Mediterranean restaurant chain Cava priced its initial public offering at $22 per share on Wednesday. That was higher than the previously stated range of $19 to $20 per share. The company sold 14.4 million shares, raising $318 million. The IPO pricing values Cava at $2.45 billion, with more than 111 million shares outstanding. The stock is expected to debut today and trade under the ticker symbol CAVA.
Continue Reading -->Coffee With Greta: Betting On A Pause
Register now for today’s free Q&A with Scott Redler on LinkedIn! DJIA Futures: -82 (-0.2%) SPX Futures: +4 (+0.1%) NASDAQ Futures: +9 (+0.1%) Good morning friends! Futures are mixed as traders await the Fed decision this afternoon. Let’s get right to it! Fed Day The Federal Reserve is set to release its rate decision at 2:00 p.m. ET today. CME Group’s FedWatch Tool currently shows nearly 91% of traders expecting the bank to skip a rate hike today. That would leave the federal funds rate in a range of 5% to 5.25%. But there will be a lot of focus on the dot plot to determine if the bank plans one more rate hike this year. FedWatch shows nearly 58% of traders anticipating a 25bps hike next month. Fed Chair Jerome Powell will give a post-meeting press conference at 2:00 p.m. ET. Wholesale Inflation Falls More Than Expected Wholesale inflation pressures cooled more than expected in May. The Bureau of Labor Statistics’ producer price index dropped 0.3% monthly and was up just 1.1% year over year. That was better than economists’ expectations for a 0.1% monthly decline and 1.5% annual increase. It was the 11th consecutive decline in annual prices and the lowest since December 2020. The core PPI also came in better than forecast, rising 0.2% monthly and 2.8% year over year. The PPI is a leading indicator for consumer prices meaning this data is good news for the Fed’s hopes that inflation will continue to cool in the months ahead. Mortgage Demand Jumps Mortgage demand jumped last week as rates pulled back for the second week in a row. The Mortgage Bankers Association reported total application volume rose 7.2% from the previous week. Purchase applications rose 8% weekly but were 27% lower year over year. Refinance applications also rose 6% weekly but were 41% lower annually. The increase in activity came as the average 30-year fixed contract rate fell to 6.77% from 6.81%. Shell Boosts Dividend Shell (SHEL) shares are up 2.0% ahead of the open after announcing plans to raise its dividend. The oil giant announced it will increase its shareholder distributions to 30% to 40% of cash flow from operations. That’s up from 20% to 30% previously. The changes include hiking its dividend by 15% from Q2 and at least $5 billion of share buybacks in the second half of this year. The CEO said, “Performance, discipline, and simplification will be our guiding principles as we allocate capital to enhance shareholder distributions, while enabling the energy transition.” In Case You Missed It Tesla (TSLA) shares rallied 3.6% on Tuesday, extending the company’s record-long win streak. It was the 13th straight session TSLA has closed higher. It was also the highest closing price for the stock since September 2022.
Continue Reading -->Coffee With Greta: Stocks Jump As Inflation Drops
Register now for tomorrow’s free Q&A with Scott Redler on LinkedIn! DJIA Futures: +39 (+0.1%) SPX Futures: +13 (+0.3%) NASDAQ Futures: +98 (+0.7%) Good morning friends! Futures are higher as new data shows inflation continuing to cool. Let’s get right to it! CPI Falls To Two-Year Low Inflation pressures continued to cool in May, falling to the lowest annual rate in more than two years. The Bureau of Labor Statistics’ consumer price index rose 0.1% monthly and 4% year over year. That was the lowest annual increase since March 2021. But core inflation pressures, which exclude food and energy prices, were higher. The core CPI rose 0.4% monthly and 5.3% annually. All of the data was in line with economists’ expectations and is good news for traders hoping for Fed pause on Wednesday. CME Group’s FedWatch Tool now shows 100% of traders betting the central bank will leave rates unchanged this week. Oracle Jumps After Earnings Beat Oracle (ORCL) shares are up 5.6% ahead of the open after beating fiscal Q4 expectations on the top and bottom line. Here’s how the software company’s results compared to analysts’ estimates: Adjusted EPS: $1.67 vs $1.58 expected Revenue: $13.84 billion vs $13.73 billion expected Total revenue rose 17% year over year while cloud services and license support revenue jumped 23%. Cloud infrastructure revenue soared 76%, building on the 55% growth seen in the previous quarter. Apple Slips After Hitting Record High Apple (AAPL) shares are down 0.3% in premarket trade after closing at a fresh record high on Monday. The iPhone maker’s stock gained 1.6% and closed at $183.79. The record comes after Apple unveiled its new VR headset the Vision Pro at its Worldwide Developers Conference last week. FTC Files To Block Microsoft-Activision Blizzard Merger The FTC is attempting to block Microsoft’s (MSFT) acquisition of Activision Blizzard (ATVI). The agency applied for a temporary restraining order and preliminary injunction to block the deal on Monday. Despite the move, MSFT shares are up 0.8% and ATVI shares are up 0.7% ahead of the open. The FTC is worried Microsoft may withhold popular Activision Blizzard games from launching on other game consoles or charge more for games that do launch on other consoles. The FTC’s hearing date for the deal fell after the July 18 deadline for the merger, which prompted the injunction request.
Continue Reading -->Tesla $242 Is the Level to Watch
SPX futures are up 10 points after we kissed 4322 last Friday and pulled back a bit. I will see how we consolidate ahead of the CPI on Tuesday and FOMC on Wednesday. The active sequence from March was led by tech and started to broaden out a bit. Headlines this weekend talked about a “New Bull Market” but these definitions like “20% off the lows” have become more meaningless over the years. As long as we hold 4290ish, it’s hard to get too bearish. SPY hit a high of $431.99 on Friday and also touched $429.62. I will see how tight things get ahead of Wednesday. I did well buying SPY calls into weakness for the past few weeks. Tech continues to do a lot of the heavy lifting. The downtrend line was cleared in March and every time they try and rotate the flows, it repairs like we saw last Wednesday into Thursday. QQQ’s have active support at $353ish. As long as that holds, it’s hard to get too bearish here. I did well selling calls above the market last week. Now let’s dig into some individual names: AAPL provides ways to trade around a position. Investors and traders are being rewarded. The $180 area needs to hold to set up a potential move back to the $184.95 highs. TSLA: we were rewarded for getting very bullish on TSLA when it cleared $169.76 on May 17. There have been so many ways to make money since then with options and stock. It hit a high of $252.42 on Friday. It feels a little extended. I would trim if I was heavy in it. It seems like some digestion can happen. Holding the $242 gap pivot keeps it super special. Below and it can get choppier. META helped lead this tech rally with a high of $276ish and it’s now in rebuilding mode. $258ish is the recent low. See if early strength holds or fades today. $267.59 is Friday’s high. NVDA is trying to rebuild since the $419 high. Recently, it held $373ish and bounced. It seems like when it’s green, it goes red. And when it’s red, it goes green. So there is not much to do this morning. AMD gave us a super move from $91ish to $130+. It’s been in a corrective/digestive mode this past week. It held the $115.80 area again. I would keep taking trades, but I would trim some this morning. See how it holds up ahead of its AI chip unveiling event. Scott Redler Positions Disclosure as of 2023-06-12 at 9.12.01 AM
Continue Reading -->Coffee With Greta: Big Week
Register now for Wednesday’s free Q&A with Scott Redler on LinkedIn! DJIA Futures: +42 (+0.1%) SPX Futures: +12 (+0.3%) NASDAQ Futures: +77 (+0.5%) Good morning friends! Futures are higher as traders bet the Fed will pause rate hikes this week. Let’s get right to it! Jam Packed Week This will be a big week for traders with new inflation data and the next Fed decision both on the calendar. Things kick off Tuesday morning with the release of the May consumer price index at 8:30 a.m. ET. The Fed meeting then begins later that morning. Then on Wednesday, the May producer price index will be out at 8:30 a.m., followed by the Fed’s rate announcement at 2:00 p.m. CME Group’s FedWatch Tool currently shows 73.6% of traders betting on a pause at this week’s meeting. Thursday is a busy morning with weekly jobless claims, May retail sales, May import prices, the Empire State manufacturing index, and the Philly Fed manufacturing index all at 8:30 a.m. ET. The University of Michigan releases its consumer sentiment index at 10:00 a.m. on Friday. Tesla Extends Gains Tesla (TSLA) shares are up 1.5% ahead of the open and on track to notch a new record series of gains. If the electric automaker’s stock closes higher today it will be the 12th consecutive rise, which would be a new record for the company. The stock’s most recent down day was on May 24, when shares closed at $182.90. TSLA is set to open above $248 per share today. Oil Prices Fall Oil prices are slipping this morning as investors look ahead to this week’s Fed decision. West Texas Intermediate crude futures are down 2.8% to just over $68 bbl while Brent crude futures are down 2.5% to just under $73 bbl. Concerns about demand in China and rising Russian crude supply are also putting pressure on prices.
Continue Reading -->Fearless Bulls vs. the Fed: What’s on Tap June 12-16, 2023
Welcome to your weekly trading preview! Before we get started, we invite you to join this week’s upcoming events:The Newsbeat Open House with JR Romero!Our Twitter Spaces with MightySoldiersScott Redler: Chat With a Pro TraderUse the Table of Contents to jump around: Table of Contents This Week’s Trading CalendarWeek in Review: The Small Caps Come BackThe June SurgeFear Does Not Exist in This Market, Does It?The Fed Is Dead AheadSome Earnings BiggiesThe Best ETFs of 2023 – Semis Still RULEFactoid of the Week: The Mighty Carvana Short SqueezeTrading Advice from Robert Deniro This Week’s Trading CalendarIf you want to view or download this week’s calendar, check click the image below:Click to enlarge Week in Review: The Small Caps Come Back(data as of 2:03 p.m. Friday) The big story this week was the surge in the Russell 2000, which jumped 1.7% to outperform the other major index ETFs. The bears have argued that the rally has been too tech-heavy, so it’s good to see other small caps get in the game. We also saw RSP, the equal-weight S&P 500 ETF, outperform SPY, which is heavily influenced by a few large-cap tech stocks like Microsoft (MSFT) and Apple (AAPL). You can see that in this chart:The S&P 500’s rally also pushed it 20% over the October 2022 low, so we are in a bull market — if you believe in that textbook definition. The June Surge Now let’s take a quick look at ETF performance in June. As you can see, just about everything is up: The 2023 rally is broadening out with energy, financials, airlines, and small caps catching up to the soaring tech stock. Meanwhile… complacency may be setting in.Fear Does Not Exist in This Market, Does It? The VIX is back at February 2020 levels, showing that traders expect almost no volatility: Meanwhile, the American Association of Individual Investors’ Sentiment Survey showed a surge in bullish sentiment: 44.5% of investors are bullish, a big jump from last week’s 29.1% reading. This is the highest reading since November 11, 2021. The S&P 500 topped out less than 2 months after that. Plus, CNN’s Fear and Greed Index reads Extreme Greed: Add it up and it’s obvious that traders are bullish. I’m not saying this is right or wrong – I’m just showing you the data.The Fed Is Dead AheadIt’s a big week for US economics:Tuesday: Consumer Price IndexWednesday: FOMC Rate Decision & Press Conference, PPIThursday: Retail Sales, Jobless Claims, Philly Fed, NY Empire State Manufacturing, Industrial ProductionFriday: Michigan SentimentAll eyes are on the CPI Tuesday and the Fed Wednesday.We all want to see if the Fed’s really going to just hike 25 bps and pause.Of course, if Powell shakes things up, the bulls may run into a brick wall.Because based on the action in tech and housing stocks, it seems like the market’s pricing in Some Earnings BiggiesThe earnings calendar is almost empty but there are 4 important reports hitting:Monday: Oracle (ORCL) – will give us insights into enterprise tech spending (and possibly AI trends).Wednesday: Lennar (LEN) – homebuilding stocks are up huge in 2023 despite a lousy housing market so we’ll get more insights.Thursday: Kroger (KR) – will tell us about food inflation.Friday: Adobe (ADBE) – has been releasing amazing AI tech and we’ll see if people are buying The Best ETFs of 2023 – Semis Still RULEEven though small caps played some catch-up this week, big-cap tech is still on stop with semiconductors up nearly 45% YTD:And who would have thought housing (ITB) would be up 30% in a bear market. Factoid of the Week: The Mighty Carvana Short SqueezeWe’re awarding Carvana (CNVA) the “Short Squeeze of the Year” Award. It has 45% short interest… and it’s up 306% year-to-date at $19.26. Only 3 of 27 analysts rate it a buy. And the average target price is just $13.There’s a parallel here with housing stocks. Everyone knew housing was slowing the same way everyone knew the weak used car market would hurt Carvana. Turns out, when everyone knows something, it can be time to buy. Easier said than done… but keep that thought in your head.Trading Advice from Robert DeniroRobert DeNiro on your attachment to stocks pic.twitter.com/8G1jUmlqXP— T3 Live (@t3live) June 8, 2023 P.S. Don’t forget to join this week’s upcoming events!The Newsbeat Open House with JR Romero!Our Twitter Spaces with MightySoldiersScott Redler: Chat With a Pro TraderUse the Table of Contents to jump around:
Continue Reading -->Coffee With Greta: Bull Market
Register now for next week’s free Q&A with Scott Redler on LinkedIn! DJIA Futures: -67 (-0.2%) SPX Futures: +3 (+0.1%) NASDAQ Futures: +45 (+0.3%) Good morning friends! Futures are mixed after the S&P 500 notched its highest close of the year on Thursday. Let’s get right to it! S&P 500 Enters Bull Market The S&P 500 officially closed in bull market territory on Thursday. The index ended the session 0.6% higher at 4,293.93 – the highest close so far of 2023. But it was also up 20% from the most recent low on October 12, 2022. That’s the official threshold that marks a new bull market. The index is on track for its fourth straight positive week for the first time since August. GM To Use Tesla EV Chargers General Motors (GM) shares are up 4% ahead of the open after the automaker reached a deal with Tesla (TSLA) to use the EV maker’s North American charging network. TSLA shares are also up 6.2% in premarket trade. GM vehicles will be able to access 12,000 of Tesla’s superchargers using an adapter starting next year. Starting in 2025, automaker will also begin installing the charging port used by Tesla in its cars, NACS (North American Charging Standard), instead of the current industry-standard CCS. GM CEO Mary Barra told CNBC the deal should save the automaker up to $400 million of a previously announced $750 million investment in EV charging. A similar deal was announced between Ford (F) and Tesla last month. DocuSign Earnings Beat Expectations DocuSign (DOCU) shares are up 6.9% ahead of the open after beating fiscal Q1 expectations on the top and bottom line. Here’s how the e-signature provider’s results compared to analysts’ estimates: Adjusted EPS: $0.72 vs $0.56 expected Revenue: $661 million vs $642 million expected Both total revenue and subscription revenue jumped 12% year over year. Revenue in the professional services and other category was up 14%. DocuSign reported 1.4 million paying users and more than 1 billion total users as of April 30. The company expects fiscal Q2 revenue between $675 million and $679 million vs $667 million expected. For the full year, DocuSign forecast revenue between $2.71 billion and $2.73 billion vs $2.7 billion expected. In Case You Missed It Carvana (CVNA) shares surged 56% on Thursday after the used-car retailer hiked its fiscal Q2 guidance. The company now expects to report adjusted EBITDA of $50 million for the current quarter, beating analysts’ estimates. Carvana is expected to report earnings on August 3rd. The CEO said, “Our updated Q2 2023 outlook demonstrates that our progress continues to positively impact the business even faster than expected.”
Continue Reading -->Coffee With Greta: Meme King Takes Over GME
Register now for next week’s free Q&A with Scott Redler on LinkedIn! DJIA Futures: -30 (-0.1%) SPX Futures: +2 (+0.1%) NASDAQ Futures: +28 (+0.2%) Good morning friends! Futures are mostly flat as the recent rally takes a pause. Let’s get right to it! GameStop Plunges After Executive Shakeup GameStop (GME) shares are plunging 21.5% ahead of the open after the video game retailer reported Q1 earnings and fired its CEO on Wednesday. The company reported a net loss of $0.17 per share on $1.24 billion in revenue and canceled its earnings conference call. GameStop fired CEO Matthew Furlong and appointed Ryan Cohen as executive chairman effective immediately. The quarterly securities filing said, “We believe the combination of these efforts to stabilize and optimize our core business and achieve sustained profitability while also focusing on capital allocation under Mr. Cohen’s leadership will further unlock long-term value creation for our stockholders.” Furlong also resigned from the company’s board upon his firing. GameStop said Cohen will be in charge of capital allocation, evaluating potential investments and acquisitions and overseeing the managers of GameStop’s holdings. Weekly Jobless Claims Jump Weekly jobless claims jumped more than expected last week. The Labor Department reported 261,000 Americans filed initial claims for unemployment benefits. That was up by 28,000 from the previous week and the highest level since October 2021. Economists were expecting claims to rise to 236,000. Eurozone Enters Recession Revised data shows the Eurozone entered a recession in the first quarter of the year. The bloc reported GDP of -0.1% in Q1, down from the first estimate of +0.1%. That marked two consecutive quarters of contraction after Europe also saw a 0.1% contraction in Q4 2022. Lucid Looks To Enter Chinese Market Lucid (LCID) shares are up 3.4% in premarket trade following reports the electric automaker is looking to enter the Chinese market. The company’s head of China operations, Zhu Jiang, confirmed those reports with Reuters. He declined to comment on other reports that Lucid is considering plans for local production in China. Zhu said the funding from its recently announced stock offering would help “bring the advanced EV technology and product experience to the industry and users globally at a faster pace.”
Continue Reading -->Coffee With Greta: 10-Month High
Register now for my free Q&A event with David Prince on LinkedIn today! DJIA Futures: +11 (+0.03%) SPX Futures: +4 (+0.1%) NASDAQ Futures: +8 (+0.1%) Good morning friends! Futures are flat but higher as traders look to extend the recent rally. Let’s get right to it! Market Extends Gains The major indexes are on track to open slightly higher after the S&P 500 closed at 10-month high on Tuesday. The index closed 0.24% higher at 4,283.85, the highest level since August 2022. The Nasdaq also gained 0.36%, notching out its highest close in 2023. Some analysts say the recent market action is a bullish signal. “The fact that it refuses to fall to me is extremely bullish,” said Adam Sarhan, CEO of 50 Park Investments. “Normally, after a big run up, you see a market pullback, and when the market doesn’t pull back and goes sideways, that to me is very bullish.” Trade Deficit Hits 6-Month High The U.S. trade deficit rose less than expected in April. The Commerce Department reported that gap jumped 23% to $74.6 billion. That was lower than expectations for $75.2 billion but was the highest level in six months as imports rebounded. Imports jumped 1.5% to $323.6 billion while exports fell 3.6% to $249 billion. Cathie Wood Buys The COIN Dip Coinbase (COIN) shares are up 3.2% ahead of the open after tumbling 12.1% on Tuesday after the SEC sued the crypto exchange. The jump comes after investor Cathie Wood increased her fund’s stake in the stock amid the drop. In an email, ARK Invest funds said it added more than 400,000 shares of COIN spread across the ARK Innovation ETF (ARKK), Next Generation Internet ETF (ARKW), and Fintech Innovation ETF (ARKF). Wood’s funds are the second-largest holder of Coinbase with an 11.44 million share stake. Stitch Fix Tops Fiscal Q3 Expectations Stitch Fix (SFIX) shares are up 9.5% in premarket trade after beating fiscal Q3 expectations on the top and bottom line. Here’s how the styling company’s results compared to analysts’ estimates: Loss per share: $0.19 vs $0.31 expected Revenue: $394.9 million vs $389 million expected The company announced further steps to reduce costs including closing its Dallas distribution center next year and letting the lease on another distribution center expire this year. Stitch Fix also said it would “explore exiting” the U.K. to focus on its styling business in the U.S. The company said it expects fiscal Q4 revenue between $365 million and $375 million, below analysts estimate of $379 million In Case You Missed It Boeing (BA) shares fell 0.7% Tuesday after the planemaker warned about a new defect on its 787 Dreamliner planes. The company said the issue is related to a “nonconforming condition” on a horizontal stabilizer fitting. Boeing said this will slow deliveries of the planes in the near-term but it will not impact its full-year delivery outlook.
Continue Reading -->Coffee With Greta: COIN In Trouble
Register now for my free Q&A event with David Prince on LinkedIn tomorrow! DJIA Futures: -25 (-0.1%) SPX Futures: -3 (-0.1%) NASDAQ Futures: -18 (-0.1%) Good morning friends! Futures are slipping as the recent market rally takes a breather. Let’s get right to it! SEC Sues Coinbase Coinbase (COIN) shares are tumbling 15.6% ahead of the open after the SEC sued the crypto exchange in New York federal court this morning. The regulator alleges that Coinbase is acting as an unregistered broker and exchange. The SEC demanded the company be “permanently restrained and enjoined” from continuing to operate in that manner. The case comes after the SEC sued rival crypto exchange Binance and its CEO on Monday. The suit says Coinbase “has for years defied the regulatory structures and evaded the disclosure requirements” of U.S. securities law. SEC chair Gary Gensler said, “We allege that Coinbase, despite being subject to the securities laws, commingled and unlawfully offered exchange, broker-dealer, and clearinghouse functions.” Apple Dips After Big VR Reveal Apple (AAPL) shares are down 0.4% in premarket trade after announcing a new virtual reality headset on Monday. The stock hit a record high of $184.95 earlier in Monday’s session, before the highly-anticipated announcement at the Worldwide Developers Conference. Apple’s unveiled its first virtual reality headset, the Apple Vision Pro, which costs $3500 and will be available starting in early 2024. The company also announced iOS 17, watchOS 10, a new Macbook Air, a new Mac Pro with an its first in-house chip, and more. Oil Prices Fall On Economic Fears Oil prices are falling this morning as fresh fears about the economy overshadow the Saudi plan to cut output. West Texas Intermediate crude futures are down 2.1% at $70.62 bbl while Brent crude futures are down 1.9% at $75.22 bbl. Analysts said Saudi Arabia’s plan to cut its output by 1 million barrels per day is unlikely to cause a “sustainable price increase” amid weaker demand, stronger non-OPEC supply, and potential recessions across the globe. The U.S. Energy Information Administration is set to release its short-term energy outlook this afternoon. In Case You Missed It The services side of the U.S. economy slowed more than expected last month. The ISM services PMI fell to 50.3% in May from 51.9% in April. That marked a five-month low and was weaker than expectations for 51.8%. Business owners say ‘Everything seems to have leveled off. Not getting any worse, not getting any better.’
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