Coffee With Greta: Traders Await Earnings
DJIA Futures: +31 (+0.1%) SPX Futures: -1 (-0.01%) NASDAQ Futures: -11 (-0.1%) Good morning friends! Futures are flat as traders look ahead to big earnings later this week. Let’s get right to it! Big Earnings Week Q1 earnings season will pickup steam this week with more big banks and some big tech names on the calendar. Here are the major companies reporting results this week: Tuesday: Bank of America (BAC), Goldman Sachs (GS), Netflix (NFLX), United Airlines (UAL) Wednesday: Morgan Stanley (MS), IBM (IBM), Tesla (TSLA) Thursday: AT&T (T) Friday: Procter & Gamble (PG) This earnings season is expected to show lower profits overall as consumers pull back on spending amid to persistently high inflation pressures. Traders are also focused on future outlooks to gauge how companies expect the economy to shift over the next few months. Charles Schwab Q1 Earnings Beat Charles Schwab (SCHW) shares are up 0.7% ahead of the open after beating Q1 profit expectations. Here’s how the brokerage’s results compared to analysts’ estimates: Adjusted EPS: $0.93 vs $0.90 expected Revenue: $5.12 billion vs $5.14 billion expected The CEO said investor sentiment “remained bearish” during the quarter and the bond markets reflected “growing fears of an economic downturn”. Empire State Manufacturing Index Jumps A key manufacturing gauge unexpectedly jumped into positive territory this month. The New York Fed’s Empire State manufacturing index jumped 35.4 points to 10.8. That topped economists’ expectations for a reading of negative 15. Any reading above zero indicates improving conditions in the manufacturing sector and this is the first positive reading in five months. The new orders index soared 46.8 points to 25.1, the shipments index jumped 37.3 points to 23.9, and unfilled orders rose 6.7 points to 0. But employment and hours worked both declined for the third month in a row. In Case You Missed It Treasury Secretary Janet Yellen believes the recent banking crisis will take some pressure off of the Fed on inflation. In a CNN interview over the weekend said, “Banks are likely to become somewhat more cautious in this environment. We already saw some tightening of lending standards in the banking system prior to that episode, and there may be some more to come.” She said that tightening “could be a substitute for further interest rate hikes that the Fed needs to make.”
Continue Reading -->What’s On Tap for Traders: April 17-21
We’re coming off an exciting week of trading with a cool CPI report, a more cautious Fed, and some upside earnings surprises from the banks. Now let’s look at what’s ahead this coming week. Click this image for a quick look at what’s on the calendar: (click to enlarge) Tech Earnings Season Begins With Netflix and Tesla Tech is outperforming big time in 2023, with the QQQ’s up 18.6% vs. a 7.3% gain for SPY: As of Friday at 1:30 p.m. ET But the scales may tip with Netflix (NFLX) reporting earnings on Tuesday. T3 Live Chief Strategic Officer Scott Redler notes “It’s hard to be long or short Netflix into earnings given how far it’s come. It’s been a real leader over the last quarter, so it will give traders a good gauge on tech stock sentiment.” Tesla (TSLA) follows on Wednesday. Dan Darrow of T3 Live’s Alpha Team VTF® tells us “Tesla’s earnings will be must-see TV. April deliveries were disappointing relative to high expectations, and it will take a strong report and guidance to break the stock out of its 2-month trading range.” FYI: Dan will join Greta Wall for a LinkedIn Q&A this Wednesday. Click here to sign up! Given Elon Musk’s chronic inability to stay out of the news, the world will be watching this show. Semiconductor investors will want to keep an eye on ASML Holding (ASML) and Lam Research (LRCX) on Wednesday plus Taiwan Semi (TSM) on Thursday. The VanEck Semiconductor ETF (SMH) is up a whopping 22.9% YTD to top our ETF leaderboard: Click to enlarge As of Friday at 1:30 p.m. ET Micron (MU) rallied after a horrible quarter, so we’ll see if the “it can’t get any worse” semi rally extends into Q2. Positions Disclosure: Scott Redler and Dan Darrow’s positions as of 2023-04-14 at 1.26.32 PM (Click to enlarge) Even More Bank Earnings: Schwab in Focus Bank earnings were on the strong side Friday, with JP Morgan (JPM) surging higher: We’ll get even more this coming week. Schwab (SCHW) is a big one to watch on Monday. We all know Schwab as a major broker and asset manager, but the company’s bond market losses got it caught up in the regional bank meltdown, and the stock’s been a mess: Traders and investors are eager to see the impact on Schwab’s financials. The options market is pricing in a ~9% move in SCHW next week. Given the uncertainty, we could see such a move. Other bank reports to watch: Monday: State Street (STT) Tuesday: Bank of America (BAC) and Goldman Sachs (GS) Wednesday: Morgan Stanley (MS) and US Bancorp (USB) Thursday: American Express (AXP) A Light US Economic Calendar The US economic calendar lightens up a bit this week. We’ll have Building Permits on Tuesday followed by the Philly Fed and Existing Homes Sales numbers on Thursday. Traders will be looking for more signs of a slowdown to get a better read on the Fed and monetary policy. Overseas Is Busier The global calendar has a lot more happening, especially on the inflation front. We have CPI readings on Tuesday (Canada) and Wednesday (England, Eurozone, New Zealand). Inflation seems to be cooling worldwide so we’ll see if the trend continues. Plus, China reports GDP and Industrial Production numbers late Monday. And on Friday, we’ll get England and Canada’s Retail Sales numbers. Sentiment Is Still… Confusing: The AAII Sentiment Survey shows that just 26.1% of investors are bullish, well below-the long-term average of 37.5%. That’s down from 33.3% last week: According to AAII, “bullish sentiment remains below its historical average of 37.5% for the 71st time out of the past 73 weeks.” Pretty bearish… right? Yes. But CNN’s Fear & Greed Index shows that traders are greedy: Permabulls always say everyone’s bearish. Permabears always say everyone’s bullish. The truth is somewhere in the middle… Video of the Week David Prince of Inner Circle talks to Jesse Martin, winner of two World Series of Poker Gold Bracelets and the 2019 $2 Million DraftKings Fantasy Football World Championship. Jesse is an IC member and shares how high-stakes poker trained him to succeed in the markets. Momentum Mastery Is Coming… JR Romero, Head of T3’s Newsbeat Program, is teaching his all-new Momentum Mastery Course LIVE. Want in? Contact Amber Buchetto for details. What did you think of this article? Let us know in the comments!
Continue Reading -->Coffee With Greta: Earnings Kickoff With Big Banks
DJIA Futures: -9 (-0.03%) SPX Futures: -7 (-0.2%) NASDAQ Futures: -93 (-0.7%) Good morning friends! Futures are mostly lower as traders digest first-quarter earnings from big banks and new data on the U.S. consumer. Let’s get right to it! JPMorgan Chase Reports Record Revenue JPMorgan Chase (JPM) shares are rallying 6.1% ahead of the open after beating Q1 expectations on the top and bottom line. Here’s how the largest U.S. bank’s results compared to analysts’ estimates: Adjusted EPS: $4.32 vs $3.41 expected Revenue: $39.34 billion vs $36.19 billion expected Net interest income surged nearly 50% year over year which pushed quarterly revenue to a new record. CEO Jamie Dimon said, “The U.S. economy continues to be on generally healthy footings —consumers are still spending and have strong balance sheets, and businesses are in good shape.” But he also warned, “the storm clouds that we have been monitoring for the past year remain on the horizon, and the banking industry turmoil adds to these risks.” Wells Fargo Tops Q1 Expectations Wells Fargo (WFC) shares are up 3.8% in premarket trade after beating Q1 expectations on the top and bottom line. Here’s how the bank’s results compared to analysts’ expectations: GAAP EPS: $1.23 vs $1.13 expected Revenue: $20.73 billion vs $20.08 billion expected Wells Fargo’s net interest income surged 45% year over year as interest rates rose. CEO Charlie Scharf said, “We had strong results in the first quarter including revenue growth from both the fourth quarter and a year ago, and we continued to make progress on our efficiency initiatives.” Wells Fargo set aside $1.2 billion for credit losses during the quarter. Citigroup Rises On Earnings Beat Citigroup (C) shares are up 1.6% ahead of the open after beating Q1 expectations on the top and bottom line. Here’s how the investment bank’s results compared to analysts’ estimates: Profit: $4.6 billion vs $4.3 billion expected Revenue: $21.45 billion vs $19.99 billion expected Personal banking revenue rose 18% year over year while fixed-income markets revenue rose 4%. But Citigroup did see declines in investment banking and equity markets revenue. UnitedHealth Group Raises Outlook After Earnings Beat UnitedHealth Group (UNH) shares are up 0.4% in premarket trade after beating Q1 expectations on the top and bottom line and hiking its outlook. Here’s how the health insurer’s results compared to analysts’ expectations: EPS: $6.26 vs $6.16 expected Revenue: $91.9 billion vs $89.7 billion expected In a statement, the company said, “In the first quarter of 2023, UnitedHealthcare grew to serve nearly 2 million more people than a year ago, with broad-based growth across the company’s commercial, community-based and senior benefit offerings.” UnitedHealth hiked its full-year earnings outlook to between $24.50 and $25 per share vs $24.40 to $24.90 previously. Retail Sales Fall More Than Expected Retail sales fell more than expected in March as consumers pulled back. The Commerce Department reported retail sales dropped 1% last month to $691.7 billion. That was worse than expectations for a 0.5% decline. Here’s a look at the monthly change in retail sales by category: -5.5% gas stations -2.5% department stores -2.1% electronics stores -2.1% building supply stores -1.7% clothing retailers -1.6% cars, parts stores -1.2% furniture stores 0.0% grocery stores +0.1% restaurants, bars +0.2% sporting, hobby stores +0.3% health, personal care stores +1.9% online
Continue Reading -->Coffee With Greta: Wholesale Inflation Tumbles
DJIA Futures: +57 (+0.2%) SPX Futures: +11 (+0.3%) NASDAQ Futures: +58 (+0.5%) Good morning friends! Futures are rising as another report points to cooling inflation pressures. Let’s get right to it! Wholesale Inflation Tumbles Wholesale inflation pressures unexpectedly dropped in March. The Bureau of Labor Statistics’ producer price index fell 0.5% monthly and rose just 2.7% year over year. That was better than expectations for the index to be unchanged on a monthly basis and a sharp slowdown from the 4.9% annual gain in February. It was the largest drop in 3 years, driven mostly by lower energy prices. Energy prices tumbled 6.4% last month while food prices rose 0.6%. The core PPI, which excludes food and energy, rose 0.1% monthly and 3.6% annually last month vs expectations for a 0.3% monthly increase. The data points to cooling inflation pressures for Americans as producers pass down price changes to consumers. Weekly Jobless Claims Rise Weekly jobless claims rose more than expected last week, a sign the labor market is continuing to cool. The Labor Department reported 239,000 Americans filed initial unemployment claims. That was up by 11,000 from the previous week and higher than 232,000 expected. But claims still remain below the 270,000 level which economists say would signal a deterioration in the labor market. Continuing jobless claims fell by 13,000 to 1.81 million in the week ending April 1. Delta Jumps On Strong Outlook Delta Airlines (DAL) shares are rising 2.6% ahead of the open despite missing Q1 expectations on the top and bottom line. Here’s how the airline’s results compared to analysts’ estimates: Adjusted EPS: $0.25 vs $0.30 expected Adjusted revenue: $11.84 billion vs $11.99 billion expected But Delta’s Q2 forecast was better than expected, signaling strong travel demand. The airline expects Q2 sales to increase 15% to 17% year over year with adjusted EPS between $2 and $2.25. That topped analysts’ estimates for revenue growth of 14.7% and EPS of $1.66. Delta said it expects “record advance bookings for the summer.” That strong outlook is also boosting other airlines in premarket trade with United Airlines (UAL) shares up 2.8% and American Airlines (AAL) shares up 2.0%. In Case You Missed It The Fed’s March meeting minutes were released on Wednesday and showed officials expect the U.S. economy to fall into a “mild recession” later this year due to the banking crisis. The minutes also showed several members were leaning toward a 50 basis point rate hike at the last meeting prior to the banking problems. Officials said inflation is still “much too high” but stressed they will remain data-dependent in upcoming meetings. American Airlines (AAL) shares tumbled 9.2% on Wednesday after the company updated its Q1 forecast. American said it expects to report Q1 adjusted EPS between $0.01 and $0.05. That was better than the previous outlook for earnings to break even but below analysts’ estimates of $0.06.
Continue Reading -->Coffee With Greta: Stocks Jump On Cool CPI
DJIA Futures: +225 (+0.7%) SPX Futures: +34 (+0.8%) NASDAQ Futures: +135 (+1.0%) Good morning friends! Futures are jumping after a better-than-expected March CPI release. Let’s get right to it! March CPI Cooler Than Expected Inflation pressures continued to cool in March. The Bureau of Labor Statistics’ consumer price index rose 0.1% monthly and 5% year over year. That was better than expectations for a 0.2% monthly and 5.1% annual gain. Excluding food and energy, the core CPI rose 0.4% monthly and 5.6% annually, in line with expectations. Energy prices continued to decline on both a monthly and annual basis. Gas dropped 4.6% monthly and 17.4% annually while oil prices fell 4.0% monthly and 14.2% year over year. Grocery prices also fell 0.3% monthly but were up 8.4% annually. This data is good news for the Fed’s plans to pause rate hikes soon. CME Group’s FedWatch Tool shows just over 69% of traders anticipating a 25 basis point hike at the May 3 meeting. The Fed will also release the minutes of its February meeting at 2:00 p.m. ET today. That readout will give the market more insight into the FOMC’s discussion around when it will be appropriate to pause rate hikes. Triton International Surges On Takeover Deal Triton International (TRTN) shares are surging 30.6% ahead of the open after announcing a takeover deal. The company will be acquired by Brookfield Infrastructure Partners (BIP). The deal is a take-private acquisition that values Triton’s equity at more than $4 billion, with an enterprise value of $13.3 billion. Triton shareholders will receive $85 per share in cash and stock. BIP shares are also up 0.9% in premarket trade. Mortgage Demand Jumps Mortgage demand jumped last week as rates dropped to a two-month low. The Mortgage Bankers Association reported purchase applications rose 8% weekly and were down 31% year over year. Refinance applications were flat weekly and 57% lower annually. The average 30-year fixed contract rate decreased to 6.30% from 6.40%, the lowest level in two months. In Case You Missed It Optimism among small business owners edged lower in March but still came in higher than expectations. The National Federation of Independent Business’s Optimism index dipped to 90.1 last month from 90.9 in February. That was better than economists’ expectations for 89. Owners expressed concerns about the short-term future with the number of those who expect real sales to be higher in the next six months dropping sharply. The International Monetary Fund slashed its global growth forecast on Tuesday. The group now expects global GDP growth to be around 3% five years from now. That’s the lowest forecast since 1990. The IMF’s World Economic Outlook report said, “The world economy is not currently expected to return over the medium term to the rates of growth that prevailed before the pandemic.” The group expects 2.8% growth this year and 3% in 2024. The U.S. economy is expected to expand 1.6% this year.
Continue Reading -->Coffee With Greta: Inflation Data Looms
DJIA Futures: +22 (+0.1%) SPX Futures: +4 (+0.1%) NASDAQ Futures: -3 (-0.03%) Good morning friends! Futures are flat as traders look ahead to several Fed speeches and key inflation data. Let’s get right to it! Fed Speakers Coming Up The major indexes are little changed ahead of the open as traders await speeches from several Fed officials today. The Chicago, Philadelphia, and Minneapolis Fed Presidents are all set to speak today. All 3 are voting members of the Federal Open Market Committee this year. Traders are looking for more clues about the bank’s plans for the May 3 meeting. CME Group’s FedWatch Tool shows over 70% of traders anticipating a 25 basis point hike. The latest inflation data is also looming over the market with the March CPI set to be released Wednesday morning. CarMax Earnings Top Expectations CarMax (KMX) shares are rallying 6.3% ahead of the open after beating fiscal Q4 profit expectations. Here’s how the used-car seller’s results compared to analysts’ estimates: EPS: $0.44 vs $0.20 expected Revenue: $5.7 billion vs $6.1 billion expected Comparable-store sales fell 22% vs analysts’ expectations for a 27% drop. The CEO said, “Our deliberate steps to navigate the pressures facing the used car industry are driving sequential improvements in our business.” Albertsons Slips After Consumer Warning Albertsons (ACI) shares are slipping 0.4% in premarket trade despite beating fiscal Q4 expectations on the top and bottom line. Here’s how the grocer’s results compared to analysts’ expectations: Adjusted EPS: $0.79 vs $0.68 expected Revenue: $18.27 billion vs $18.22 billion expected But the CEO said the company has prepared for ““a more difficult consumer environment, and are expecting significant labor investments and inflationary cost increases” in fiscal 2023. Albertsons is set to be acquired by Kroger (KR) with the deal reportedly on track to be completed in early 2024. Moderna Delays Flu Shot Moderna (MRNA) shares are dropping 4.5% ahead of the open after the company said it’s delaying its flu vaccine. The pharmaceutical giant said it has not enrolled enough cases in its late-stage trial of the shot to determine if it’s successful or not. Moderna will continue testing after the first late-stage study found the shot to be less effective against influenza B than an already approved vaccine. The company said Monday it expects to launch six major vaccines in the next few years. In Case You Missed It Tesla (TSLA) cut prices in the U.S. for the fifth time since January on Monday. The automaker’s website showed both versions of the Model 3 sedans were lowered by $1,000 and the Model Y crossover price was lowered by $2,000. Tesla also cut prices on both versions of the Model S and Model X by $5,000.
Continue Reading -->5 Tech Names to Watch
SPX futures are -14ish as we see if Friday’s lows hold. Bank earnings are on Friday. Tech has been the place to be and we’ll see if that continues. On Friday, the index held the 8 day, giving us 4069 to be long against. We can’t get too bearish if that holds. 4133 is pivot resistance. SPY hit a high of $411.92 last week and held the 8 day Friday with a low of $405.68 to use. Maybe we will digest to create a bull flag pattern for higher prices. So far there has been decent digestion from the move we saw in March. As long as Friday’s low holds, we can’t get too bearish. Tech still acts best. We’ll see if that continues. On Friday, QQQ held the 8 day with a low at $312.82ish. As long as that holds, we can’t get too bearish. $318.55 is pivot resistance then $321.68 is the bigger spot. Now let’s dig into some tech names: AAPL was a great swing trade for many from $153ish up to $166.84. It hit the bigger downtrend line. On Friday it held the $161 area. There is some news that handset softness is taking place around the world. See if it matters. We’ll see if there’s a 5-15-30 minute low to trade against MSFT continues to reward dip buyers. Some swing traders are long from the $255 area. Others bought again Friday as it held the 8 day and showed relative strength. We’ll see how it acts this week for active cash flow. I’d think as long as $288ish holds, some will stay long. META has been a big cap tech leader for most of 2023 as it’s been above the 8/21day for weeks/months with multiple setups for cash flow. On Friday it held the 8 day and closed well. We’ll see how it acts this week. Use $208-$209 as key active support. GOOGL changed character In early March as it cleared the $97 area. It’s sort of had “Go To” status since then. It performed best while I was on vacation last week. Now we see if it holds the $106ish area to stay special. TSLA hit a high of $207.79 before my trip. This is why I only take options into binary events like the delivery number which missed. I sold my stock well, but lost on the call spread. Friday’s low was $179.74. See if it holds that. It’s not special — just a tactical trade here and there for cash flow. Scott Redler Positions Disclosure as of 2023-04-10 at 9:26 AM Scott was long AMZN, GOOGL, MSFT, PLTR, QQQ, BBIO calls, MGM puts
Continue Reading -->Coffee With Greta: Recession Fears Return
DJIA Futures: -127 (-0.4%) SPX Futures: -23 (-0.6%) NASDAQ Futures: -101 (-0.8%) Good morning friends! Futures are falling as recession fears grip Wall Street. Let’s get right to it! Recession Fears Return Stocks are falling ahead of the opening as traders grow more concerned about a recession. The March jobs report on Friday continued to show job growth slowing. The Labor Department reported the U.S. economy added 236,000 jobs last month while the unemployment rate ticked lower to 3.5%. That compared to expectations for 238,000 jobs and a 3.6% unemployment rate and was down from 326,000 jobs in February. Average hourly earnings rose 0.3% monthly and 4.2% year over year, the smallest annual increase since June 2021. The market is looking ahead to key inflation data this week with the March CPI on Wednesday, PPI on Thursday, and retail sales on Friday. That data will help traders determine what the Fed may do at the May 3 meeting but currently CME Group’s FedWatch Tool shows 66.7% betting on another 25 basis point rate hike. Earnings season also kicks off this week with reports from big banks like JPMorgan Chase (JPM), Wells Fargo (WFC), and Citigroup (C) at the end of the week. Pioneer Jumps On Potential Exxon Merger Pioneer Natural Resources (PXD) shares are rallying 6.1% ahead of the open following reports that Exxon Mobil (XOM) is in talks to purchase the oil driller. The Wall Street Journal first reported that the two companies have held informal talks so far. Exxon executives have also reportedly discussed a merger with at least one other company. XOM shares are down 1.0% in premarket trade. Tesla To Open New Megafactory In Shanghai Tesla (TSLA) shares are falling 2.8% ahead of the open after the company said it will open a new Megafactory in Shanghai. In a tweet on Sunday, Tesla said the new factory will be capable of producing 10,000 Megapacks per year. Megapacks are large-scale batteries used for battery storage at power stations. Tesla reportedly plans to begin construction on the Shanghai facility in Q3 and aims to start production in mid-2024.
Continue Reading -->Coffee With Greta: Stocks Fall Ahead Of Early Weekend
DJIA Futures: -17 (-0.1%) SPX Futures: -4 (-0.1%) NASDAQ Futures: -44 (-0.3%) Good morning friends! Futures are falling as traders assess the health of the U.S. labor market and economy. Let’s get right to it! Weekly Jobless Claims Drop After Large Revision Weekly jobless claims were higher than expected last week despite a large drop. The Labor Department reported 228,000 Americans filed initial unemployment claims. That was down by 18,000 from the previous week, which was revised higher by 48,000 to 246,000. Last week’s total was higher than expectations for 200,000. Continuing claims rose by 6,000 to 1.82 million in the week ending March 25. Although the official March jobs report comes out tomorrow morning, the stock market will be closed in observance of Good Friday. The report is expected to show the U.S. economy added 238,000 jobs last month with the unemployment rate unchanged at 3.6%. Costco Drops On Weak March Sales Costco (COST) shares are falling 3.2% ahead of the open after the retailer reported weak sales numbers for March. Same-store sales decreased 1.1% annually last month to $21.71 billion. That drop is an indicator consumers may be pulling back on spending due to uncertainty about the economy. But part of the decline was also due to lower gas prices. Costco estimates those lower prices impacted same-store sales growth by about 2%. Excluding the effect of gas prices and foreign exchange rates, same-store sales rose 2.6% in March vs the 5% gain in February. Levi Drops Despite Earnings Beat Levi Strauss (LEVI) shares are down 3.9% in premarket trade after reporting fiscal Q1 results and reaffirming its full-year guidance. Here’s how the denim retailer’s results compared to analysts’ expectations: Adjusted EPS: $0.34 vs $0.32 expected Revenue: $1.689 billion vs $1.623 billion expected The CFO said Levi was able to reduce inventory levels during the quarter. He also reaffirmed the company’s previous outlook saying, “We are reaffirming our annual revenue and EPS guidance reflecting a cautious outlook on the macro-environment though we remain excited about the momentum in our DTC and international businesses.” That forecast is for full-year adjusted EPS of $1.30 to $1.40 and revenue of $6.3 billion to $6.4 billion. Oil On Track For Weekly Gain Oil prices are higher this morning and on track for their third straight weekly gain after OPEC+’s surprise production cut. West Texas Intermediate crude futures are up 0.1% to just under $81 bbl while Brent crude futures are up 0.2% to over $85 bbl. Both contracts have gained more than 6% this week after the OPEC+ vote last weekend. But concerns about a slowdown in the U.S. economy have kept a lid on price gains. In Case You Missed It Business activity in the U.S. services sector slowed sharply in March. The Institute for Supply Management’s services PMI dropped nearly 4 points to a three-month low of 51.2% last month. That was lower than economists’ expectations for 54.3%. New orders sank 10.4 points to 52.2%, which was the lowest reading since the end of 2022. But inflation pressures cooled. The prices paid index fell 6.1 points to 59.5%, the smallest reading since July 2020.
Continue Reading -->Coffee With Greta: Private Job Growth Slides
DJIA Futures: -39 (-0.1%) SPX Futures: -8 (-0.2%) NASDAQ Futures: -15 (-0.1%) Good morning friends! Futures are slipping despite new data showing a cool-down in the labor market. Let’s get right to it! Private Job Growth Slows The U.S. private sector added far fewer jobs than expected in March. Payroll firm ADP reported private employers hired 145,000 workers last month. That was down from 261,000 in February and lower than 210,000 expected. ADP’s chief economist said, “Our March payroll data is one of several signals that the economy is slowing. Employers are pulling back from a year of strong hiring and pay growth, after a three-month plateau, is inching down.” Annual pay rose 6.9% in March, down from 7.2% in February. Leisure and hospitality added 98,000 workers, trade, transportation, and utilities added 56,000, construction added 53,000, natural resources and mining added 47,000, and education services grew by 17,000. Financial activities lost 51,000 workers in March, professional and business services lost 46,000, and manufacturing lost 30,000. This data comes ahead of the Labor Department’s official March jobs report on Friday which is expected to show a gain of 238,000 jobs with the unemployment rate unchanged at 3.6%. February Trade Deficit Jumps The U.S. trade deficit jumped more than expected in February as both imports and exports declined. The Commerce Department reported that gap rose 2.7% to $70.5 billion. That was a four-month high and above economists’ expectations for $69.1 billion. Imports fell 1.5% to $321.7 billion while exports slid 2.7% to $251.2 billion. Mortgage Demand Drops Mortgage demand fell last week even amid lower rates as a lack of home listings puts pressure on buyers. The Mortgage Bankers Association reported purchase applications fell 4% weekly and 35% year over year. That drop came as new listings were down 20% year over year in March with total inventory about half of what it was in March 2019, pre-pandemic. Refinance applications also dropped 5% weekly and 59% annually. The average 30-year fixed contract rate fell to 6.40% from 6.45%. J&J Reaches Talc Powder Cancer Settlement Johnson & Johnson (JNJ) shares are rising 2.9% ahead of the open after the company agreed to pay $8.9 billion to settle cancer claims related to its talc-based baby powder products. That settlement will be paid over the next 25 years and J&J’s subsidiary LTL Management also refiled for Chapter 11 bankruptcy protection. J&J’s worldwide vice president of litigation said, “Resolving this matter through the proposed reorganization plan is both more equitable and more efficient, allows claimants to be compensated in a timely manner, and enables the Company to remain focused on our commitment to profoundly and positively impact health for humanity.” But he also added, “The Company continues to believe that these claims are specious and lack scientific merit.” In Case You Missed It The Labor Department’s job openings and labor turnover survey shows there were 9.93 million available jobs in February. That was lower than expectations and the first month below 10 million since May 2021. Openings still outnumbered available workers by nearly 1.7 to 1. But the data is a sign the Fed’s fight against inflation is beginning to have an impact on the hot labor market.
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