Coffee With Greta: Bank Contagion
DJIA Futures: -343 (-1.1%) SPX Futures: -39 (-1.0%) NASDAQ Futures: -48 (-0.4%) Good morning friends! Futures are lower as bank stocks continue to plunge despite emergency action from regulators and the Fed over the weekend. Let’s get right to it! Regulators To Protect SVB Depositors U.S. regulators announced a plan over the weekend to backstop all depositors with money at Silicon Valley Bank and Signature Bank (SBNY). Depositors at both institutions will have access to all of their money, even over the insured deposit amount of $250,000. That access will start today after the banks were taken over by regulators last week. The Treasury Department designated both as systemic risks, which gives authority to unwind both in a way that it said “fully protects all depositors”. The FDIC’s deposit insurance fund will be used to cover depositors. The Fed also announced it is creating a new Bank Term Funding Program in response to the turmoil across the banking industry. That program is meant to safeguard institutions impacted by the market instability of SVB’s failure. Banks will be able to get loans of up to one year from the Fed in exchange for high-quality collateral such as Treasurys, agency debt, and mortgage-backed securities. The Fed said, “This action will bolster the capacity of the banking system to safeguard deposits and ensure the ongoing provision of money and credit to the economy. The Federal Reserve is prepared to address any liquidity pressures that may arise.” The Treasury Department is providing up to $25 billion from its Exchange Stabilization Fund as a safeguard against any potential losses from the Fed funding program. First Republic Bank Plunges First Republic Bank (FRC) shares are plunging 60.5% ahead of the open, leading the decline across the banking sector. First Republic said Sunday it had received additional liquidity from the Fed and JPMorgan Chase (JPM). That move reportedly raised its unused liquidity to $70 billion. The bank will also likely take advantage of the Fed’s new emergency funding program. The founder and CEO said in a joint statement, “First Republic’s capital and liquidity positions are very strong, and its capital remains well above the regulatory threshold for well-capitalized banks.” The new funding is meant to cover a rush of withdrawals as uninsured depositors are likely to remove their money from regional banks after the collapse of SVB last week. Other regional bank shares are also plunging with Western Alliance Bancorp (WAL) down 65.6% and Pacwest Bancorp (PACW) tumbling 44.1%. Investors Rush Into Bonds, Gold Treasury yields are tumbling this morning as investors flood into the safety of the bond market after the SVB collapse. The 2-year yield is down 52 basis points to 4.07% while the 10-year yield is down 25 basis points to 3.46%. Gold prices are also rallying, briefly topping $1,900 and hitting the highest level since early February. Uncertainty is spreading across the market about the possible contagion effects of the SVB collapse. Pfizer To Acquire Seagen Seagen (SGEN) shares are surging 15.9% in premarket trade after Pfizer (PFE) struck a deal to acquire the company for nearly $43 billion. Pfizer will pay $229 in cash per share for Seagen, a 32.7% premium to Friday’s closing price. The deal is meant to bulk up Pfizer’s cancer treatments portfolio. The drugmaker said it expects more than $10 billion in “risk-adjusted” sales from Seagen in 2030.
Continue Reading -->Coffee With Greta: Higher Unemployment Boosts Stocks
DJIA Futures: +27 (+0.1%) SPX Futures: +13 (+0.3%) NASDAQ Futures: +68 (+0.6%) Good morning friends! Futures are rising as the February jobs report shows signs of slowing inflation. Let’s get right to it! Unemployment Rises, Wage Gains Slip U.S. job growth came in hotter than expected but the unemployment rate rose unexpectedly in February. The Labor Department reported the economy added 311,000 jobs last month vs expectations for a 225,000 gain. The unemployment rate rose to 3.6% vs expectations for it to be unchanged at 3.4%. Although February’s job growth was hotter than expected, it was a cooldown from January’s blowout number which was revised lower by just 13,000 to 504,000 jobs. Leisure and hospitality continued to lead the gains, adding 105,000 jobs. Retail added 50,000, government added 46,000, and professional and business services grew by 45,000. Information-related jobs declined by 25,000 while transportation and warehousing lost 22,000. Average hourly earnings rose 4.6% year over year, below expectations for a 4.8% gain. On a monthly basis, wages rose 0.2% vs 0.4% expected. Bitcoin Falls Below $20,000 Crypto prices continue to fall alongside stocks with the collapse of Silvergate Capital (SI) putting more pressure on the industry. Bitcoin gave up the $20,000 level earlier this morning before recovering some of those losses. Currently the coin is at $20,031, down 7.5% over the past 24 hours. Ethereum is down 8.5% at just over $1,400. Oracle Revenue Disappoints Oracle (ORCL) shares are falling 4.9% ahead of the open after missing fiscal Q3 revenue expectations. Here’s how the software company’s results compared to analysts’ estimates: Adjusted EPS: $1.22 vs $1.20 expected Revenue: $12.4 billion vs $12.43 billion expected The CEO forecast fiscal Q4 EPS of $1.56 to $1.60 on revenue of $13.62 billion to $13.85 billion. Analysts were estimating earnings of $1.47 per share on $13.75 billion in revenue. Oracle also hiked its quarterly dividend by 25% to $0.40 per share. That dividend will be paid on April 24 to all shareholders of record as of April 11. Gap Falls On Big Q4 Loss Gap (GPS) shares are falling 8.1% in premarket trade after reporting a wider Q4 loss than expected. Here’s how the retailer’s results compared to analysts’ expectations: Loss per share: $0.75 vs $0.46 expected Revenue: $4.24 billion vs $4.36 billion expected Comparable sales were down 5% year over year while in-store sales dropped 3% and online sales plummeted 10%. Gap announced it was eliminating its chief growth officer role, effective immediately, while Athleta’s CEO also left the company on Thursday. The company said it plans to close 50 to 55 Gap and Banana Republic stores this year while opening 30 to 35 Athleta and Old Navy stores. DocuSign Drops Despite Earnings Beat DocuSign (DOCU) shares are tumbling 13.5% ahead of the open despite beating Q4 expectations on the top and bottom line. Here’s how the online document signing company’s results compared to analysts’ estimates: Adjusted EPS: $0.65 vs $0.52 expected Revenue: $659.6 million vs $641 million expected Guidance was also in line with expectations with DocuSign saying it expects Q1 revenue of $639 million to $643 million. The CEO said, “We finished the year strong, delivering across our key financial metrics and making tangible progress on our strategic priorities. We are reshaping DocuSign to invest in our innovation roadmap and self-service capabilities.” The company announced its CFO will stepdown later this year and the stock was downgraded by JPMorgan analysts to underweight from neutral. In Case You Missed It General Motors (GM) shares dropped 4.9% on Thursday after the automaker announced it will offer voluntary buyouts to a “majority” of its salaried employees. CEO Mary Barra made that announcement in a letter sent to workers. The Voluntary Separation Program is part of GM’s efforts to cut $2 billion in costs over the next two years. All U.S. employees who have been with the company for five years or more are eligible for the program. Those approved for the program will receive one month of pay for every year they’ve worked for the company.
Continue Reading -->Coffee With Greta: Crypto Shock
DJIA Futures: +65 (+0.2%) SPX Futures: +4 (+0.1%) NASDAQ Futures: +8 (+0.1%) Good morning friends! Futures are slightly higher as traders look ahead to Friday’s jobs report. Let’s get right to it! Silvergate Liquidating Silvergate Capital (SI) shares are plummeting 36.7% ahead of the open after the crypto banking giant announced it will shutdown operations and liquidate Silvergate Bank. Silvergate is the second-largest crypto banking firm in the U.S. with just over $11 billion in total assets. The company said in a statement, “In light of recent industry and regulatory developments, Silvergate believes that an orderly wind down of Bank operations and a voluntary liquidation of the Bank is the best path forward.” According to the company’s liquidation plan, all deposits will be fully repaid. Cryptocurrencies are dropping following the announcement. Bitcoin is down 1.4% in the past 24 hours to $21,700 with Ethereum down 1.0% to just over $1,500. Weekly Jobless Claims Jump Weekly jobless claims jumped more than expected last week. The Labor Department reported 211,000 Americans filed initial claims for unemployment benefits. That was up by 21,000 from the previous week and higher than 195,000 expected. It was the highest level of claims since late December. Continuing claims rose by 69,000 to 1.72 million vs 1.66 million expected. That was the highest level since January 2022. Etsy Drops On Double-Downgrade Etsy (ETSY) shares are dropping 4.4% in premarket trade after the e-commerce marketplace got a double-downgrade from a key analyst group. Jefferies double-downgraded the stock to underperform from buy today. The firm said it sees the stock tumbling 25% as consumer spending slows in the months ahead. Jefferies cited the need for Etsy to spend more on marketing as that turnover happens among consumers. LoanDepot Slides On Earnings Miss LoanDepot (LDI) shares are tumbling 7.4% ahead of the open after missing Q4 expectations on the top and bottom line. Here’s how the mortgage lender’s results compared to analysts’ estimates: Loss per share: $0.46 vs $0.27 expected Revenue: $169.7 million vs $190.9 million expected Revenue dropped by $104.5 million in the quarter as mortgage activity slowed sharply due to higher rates. The company also said it reduced total expenses by $91.4 million from Q3, driven primarily by lower staffing levels. LoanDepot ended 2022 with $864 million cash on hand. In Case You Missed It Job openings fell less than expected in January as the labor market remains hot. The Labor Department’s job openings and labor turnover survey (JOLTS) shows there were 10.8 million vacant jobs at the start of the year. That was down by 410,000 from December but higher than 10.6 million expected. The number of openings still outnumbers available workers by 1.9 to 1. The Fed released its latest Beige Book survey of conditions on Wednesday. That survey showed economic activity beginning to slow across the country. Nationwide activity increased only slightly in the latest survey. Six of the 12 Fed districts surveyed reported little or no change in economic activity while the other six reported modest growth.
Continue Reading -->Coffee With Greta: Private Job Growth Runs Hot
DJIA Futures: +36 (+0.1%) SPX Futures: +5 (+0.1%) NASDAQ Futures: +22 (+0.2%) Good morning friends! Futures are slightly higher as traders digest the latest jobs data and await day 2 of the Fed Chair’s testimony in Congress. Let’s get right to it! Private Payroll Growth Runs Hot The U.S. private sector expanded more than expected in February as the labor market remains hot. ADP reported private employers added 242,000 jobs last month vs 205,000 expected. That was up from 119,000 in January. The leisure and hospitality sector continued to lead the gains, adding 83,000 jobs. Financial activities added 62,000 and manufacturing grew by 43,000. This is the first piece of key data on the labor market this week. The Labor Department will release its January job openings and labor turnover survey (JOLTS) at 10:00 a.m. ET today. That report is expected to show the number of job openings in the U.S. fell to 10.6 million at the start of the year. The Labor Department’s official February jobs report on Friday is expected to show the U.S. economy added 225,000 jobs with the unemployment rate unchanged at 3.4%. Powell Testimony Day 2 Fed Chair Jerome Powell will testify in the House Financial Services Committee today, starting at 10:00 a.m. ET. This is the second part of his semiannual report on monetary policy to Congress. Powell shocked the market with a more hawkish tone during his testimony in the Senate Banking Committee on Tuesday. He told the committee that interest rates are likely to settle higher than the terminal rate the bank previously laid out. Powell said the Fed “would be prepared to increase the pace of rate hikes” if data shows that is necessary. CME Group’s FedWatch Tool now shows over 79% of traders expecting the Fed to go back to a 50 basis point rate hike at the March 22nd meeting. January Trade Deficit Rises Slightly The U.S. trade deficit rose slightly in January after surging throughout 2022. The Commerce Department reported the gap rose 1.6% to $68.3 billion at the start of the year. That was in line with expectations and down 28% year over year from $87.4 billion in January 2022. Imports rose 3% to $325.8 billion while exports rose 3.4% to $257.5 billion. Economists expect the deficit may decline this year for the first time since 2019 as Americans pullback on spending due to inflation and higher interest rates. Slower spending results in lower import levels. In Case You Missed It JetBlue Airways (JBLU) shares fell 2.9% on Tuesday after the DOJ sued to block the company’s takeover of Spirit Airlines (SAVE). The Justice Department claimed the merger would eliminate competition in the marketplace. The DOJ filing said the takeover would “leave tens of millions of travelers to face higher fares and fewer options.” Shares of the other major airlines rose following that filing.
Continue Reading -->Coffee With Greta: Powell Takes The Hot Seat
DJIA Futures: +13 (+0.04%) SPX Futures: +6 (+0.1%) NASDAQ Futures: +31 (+0.3%) Good morning friends! Futures are inching higher as traders await the Fed Chair’s first day of testimony on Capitol Hill. Let’s get right to it! Powell Testimony Day 1 Fed Chair Jerome Powell is set to deliver his semiannual testimony on monetary policy to Congress over the next two days. Powell will first appear in the Senate, with testimony in the Senate Banking Comittee beginning at 10:00 a.m. ET. Traders are watching this testimony for any new insight into the bank’s plans for interest rates amid the stubborn inflation pressures in the U.S. Powell will face questions from lawmakers on both sides of the aisle during this hearing. The Fed’s next meeting is March 21-22 and CME Group’s FedWatch Tool shows over 70% of traders expecting the bank to approve another 25 basis point rate hike. Meta Planning More Layoffs Meta Platforms (META) shares are rising 2.4% ahead of the open following a Bloomberg report that the company is planning more layoffs. The social media giant is reportedly set to cut thousands of more jobs this week. That’s on top of the 13% workforce reduction the company announced in November. The Bloomberg report said directors and vice president at the company have been asked to compile lists of employees deemed expendable. Rivian Drops After Bond-Selling Announcement Rivian (RIVN) shares are dropping 5.8% in premarket trade after announcing a new plan to raise capital. The electric automaker plans to sell $1.3 billion worth of bonds. Initial investors will also get an option to buy an additional $200 million of the bonds. Rivian said the capital raised from this offering will be used to help it launch its smaller R2 electric vehicle family. Dick’s Rallies On Earnings Beat Dick’s Sporting Goods (DKS) shares are up 6.1% ahead of the open after beating Q4 expectations on the top and bottom line. Here’s how the sporting goods retailer’s results compared to analysts’ estimates: Adjusted EPS: $2.93 vs $2.88 expected Revenue: $3.60 billion vs $3.45 billion expected Same-store sales jumped 5.3%, more than double analysts’ expectations for a 2.1% gain. The company said it feels confident it has fixed the supply chain and inventory issues it faced throughout 2022. The CEO said, “As planned, we continued to address targeted inventory overages, and as a result our inventory is in great shape as we start 2023.” Dick’s forecast full-year EPS between $12.90 and $13.80, beating estimates of $12. The company expects same-store sales growth for the full-year to be flat to up to 2%. In Case You Missed It U.S. factory orders fell less than expected in January. The Commerce Department reported new orders for U.S.-manufactured goods fell 1.6% at the start of 2023. That was better than expectations for a 1.8% decline but a reversal from the 1.7% increase in December. The drop was due to a plunge in orders for Boeing (BA) planes, which drove commercial aircraft orders down 55%. Most other manufacturing categories saw an increase in orders. Excluding transportation, factory orders rose 1.2%.
Continue Reading -->Why SPY $398 Matters Now
SPX futures are flattish after a big two-day move. The index did a Red Dog Reversal buy when it reclaimed 3939 and had power Friday to see 4048. I’d think we have a bit of digestion into Powell Tuesday, JOLTs numbers on Wednesday, and NFP Friday. Holding 3990-4010ish shows some commitment. SPY reclaimed $393.38 Thursday and had power to see $404.45 Friday. This morning it’s down small. Holding $402ish would be impressive to show high-level digestion. The active bulls need to hold $398ish this week to keep commitment to late last week. QQQ did a Red Dog Reversal buy as it reclaimed $290 Thursday to see $299.92 on Friday. AAPL’s upgrade by GS helps. It should be an interesting week as we see if the active bulls can keep the ball. Now let’s dig into some individual names. AAPL did a Red Dog Reversal buy Thursday. MS made it a top pick Friday. It hit a high of $151.11. This weekend GS upgraded it with a $199 target. I’d trim into strength, but it will be a focus. It will be hard for SPX to be so weak if this acts well. I’d trim and see if it builds or fades. TSLA made a low after its event at $186 and had a nice two-day move to $200.48. It might need to digest a bit. Holding $193.75 keeps it constructive. There is news they had to cut some prices again. We’ll see how it reacts. META is one of the better-acting stocks for now. Some are long vs. the $167.66 pivot. On Friday it hit $186+. I’m going to try and stay long. If the market holds in, this should see a move above the post-earnings high at $197+ in time. MSFT finally had a strong candle Thursday and then it hit a high of $255.62 Friday. It has some room to move, but it’s not special. Scott Redler’s positions disclosure as of 2023-03-06 at 7.24.55 AM
Continue Reading -->Coffee With Greta: Fed Chair, Jobs In Focus This Week
DJIA Futures: +51 (+0.2%) SPX Futures: +11 (+0.3%) NASDAQ Futures: +56 (+0.5%) Good morning friends! Futures are slightly higher as traders gear up for a new week of trade and look ahead to key economic data. Let’s get right to it! Powell, Jobs In Focus This Week The market is looking ahead to hearing from Fed Chair Jerome Powell this week and the February jobs report. Powell is set to deliver his semi-annual monetary policy report to Congress mid-week. He will testify in the Senate on Tuesday and the House on Wednesday. Those testimonies are expected to focus on the Fed’s plans for interest rates this year and the bank’s expectations for inflation in response to those moves. The Fed holds their next policy meeting in 2 weeks. The February jobs report will be out Friday morning and is expected to show growth slowed sharply to 225,000 jobs last month from 517,000 in January. Tesla Cuts Prices Again Tesla (TSLA) shares are up 0.6% ahead of the open after the electric automaker cut prices on its most expensive models in the U.S. to stoke demand. The Model S now starts at $89,990, down about 5%. The Model X got a 9% reduction and starts at $99,990. The high-end Plaid versions of both cars also got a price cut with both starting at $109,990. That’s down 4% for the Model S Plaid and 8% for the Model X Plaid. Amazon To Close 8 Go Stores Amazon (AMZN) shares are flat in premarket trade after the company announced it will close some of its cashierless Go stores to cut costs. Four of the stores in San Francisco, two in New York City, and two in Seattle will be closed effective April 1. An Amazon spokesperson said, “Like any physical retailer, we periodically assess our portfolio of stores and make optimization decisions along the way. We remain committed to the Amazon Go format, operate more than 20 Amazon Go stores across the U.S., and will continue to learn which locations and features resonate most with customers as we keep evolving our Amazon Go stores.” The company said it will work to find new positions for the impacted workers at those stores within Amazon.
Continue Reading -->Coffee With Greta: Stocks Rise As February Ends
DJIA Futures: +46 (+0.1%) SPX Futures: +4 (+0.1%) NASDAQ Futures: +2 (+0.01%) Good morning friends! Futures are up slightly as traders brace for the final trading day of February. Let’s get right to it! February Comes To A Close Today is the last day of February and the major indexes are on track to close out the month in the negative. As of Monday’s close, the Dow Jones is down 3.5% for the month and negative for the year, the S&P 500 is down 2.3% for February, and the Nasdaq is down 1%. Stocks pulled back in February after a strong rally at the end of December and into January. Traders have remained on edge about inflation and the Fed’s rate hikes this month as new data came in hotter than expected. But CME Group’s FedWatch Tool still shows over 75% of traders anticipating another 25 basis point hike at the March meeting. Some Fed officials have been pushing for a 50 basis point move after the January CPI, PPI, and PCE price index all came in hot. Target Slips On Weak Outlook Target (TGT) shares are down 0.2% ahead of the open after beating Q4 expectations but issuing weak guidance. Here’s how the retailer’s results compared to analysts’ expectations: EPS: $1.89 vs $1.40 expected Revenue: $31.4 billion vs $30.72 billion expected Target’s profits were down 43% year over year. But same-store sales rose 0.7%, topping expectations for a 1.6% decline. Inventory levels dropped 3% year over year in Q4 as Target focused on stocking more high-frequency items like food and paper towels. CEO Brian Cornell said, “We realized consumer spending habits have changed. So we took a pretty bold action and said, ‘We’re going to address inventory. We’re going to get our inventory levels right.’ We finished the year exactly where we wanted to be.” Target expects comparable sales in 2023 to rangle from a low single-digit decline to a low single-digit increase and full-year EPS between $7.75 and $8.75. That missed analysts’ expectations for earnings of $9.23 per share this year. Cornell said, “I think we’re being appropriate with our guidance in this environment. We know inflation is still high — it’s been very stubborn. It’s still at a very high level. We know interest rates are rising. And we’re going to watch the consumer really carefully.” Zoom Rallies On Earnings Beat Zoom (ZM) shares are jumping 5.1% in premarket trade after beating fiscal Q4 expectations on the top and bottom line. Here’s how the video chat company’s results compared to analysts’ expectations: Adjusted EPS: $1.22 vs $0.81 expected Revenue: $1.12 billion vs $1.10 billion expected Revenue rose just 4% year over year, a dramatic slowdown from the rapid growth seen during 2020 and 2021. Zoom expects growth to continue slowing this year. The company forecast between $4.435 billion and $4.455 billion in revenue this year, implying 1.1% growth and missing analysts’ estimates of $4.6 billion. Zoom forecast full-year adjusted EPS between $4.11 and $4.18, topping estimates of $3.66. For fiscal Q1, the company sees adjusted EPS of $0.96 to $0.98 on revenue of $1.080 billion to $1.085 billion. Coming Up: Consumer Confidence Consumer confidence is expected to have improved in February. The Conference Board releases its consumer confidence index at 10:00 a.m. ET today. That index is expected to improve to 108.5 from 107.1 in January. Traders will be monitoring the expectations index in that survey, which currently stands below 80 which often signals an impending recession. The survey also includes an update on consumers’ inflation expectations, which ticked higher in January from December. In Case You Missed It Pending home sales surged in January as mortgage rates dropped. The National Association of Realtors reported pending sales jumped 8.1% last month vs expectations for a 0.9% gain. It was the second straight monthly increase but pending sales were still down 24% year over year.
Continue Reading -->Why SPX 3995 Matters Now
SPX futures are up 18 after hitting a low of 3943 Friday. The Oscillator hit -62. I’d think any bounce gets contained into the 4028-4047 area. If it gets rejected at the 3995 pivot, I’d think Friday’s low breaks sooner rather than later. I didn’t put the BOS account to work yet. We’ll see how things look closer to 3885 . SPY started a new bearish active sequence on February 16 when it closed under $409.50. On Friday it hit $393.64 and gave a green candle. Some took it for an oversold bounce. I’d trim some. $399.75 is resistance. If we rally for a day or so, bears will need to reject the $401-$402 area to keep control QQQ’s broke $303 on 2/16 to start a downside active sequence. It hit $290.05 Friday. I did buy some late afternoon because things felt oversold enough. I did trim some at $293.50+ this morning which I always do when a gap is in my favor. I’d think any rally would get rejected into the $296-$298 area this week. Watch the leaders for clues. Now let’s look at some individual names: TSLA gave a Red Dog Reversal sell at $214.66 and worked its way down to $192.80 on Friday. It showed some relative strength to get some back long into today. I’d trim some and see how it feels. The March 1 event is almost here. How it responds will be big for sentiment. $205ish is resistance. AAPL broke its accelerated trend. On Friday it made a low of $145.72. If we get a rally attempt. $148.50-$149.80 is key resistance. NFLX gave clues that stocks can have upside after earnings In January. On 2/16 it resolved the inside range lower and made a new monthly low at $314ish. There’s some room to bounce toward $330ish. META has grinded lower since hitting $197+. Recently it hit $167.66 to trade against Maybe it can get and stay above $173.50 to act better again. Scott Redler’s positions disclosure as of 2023-02-27 at 7.26.30 AM
Continue Reading -->Coffee With Greta: New Week Bounce
DJIA Futures: +237 (+0.7%) SPX Futures: +33 (+0.8%) NASDAQ Futures: +125 (+1.1%) Good morning friends! Futures are rising as traders attempt to shake off last week. Let’s get right to it! New Week Begins Higher Stocks are rising ahead of the open as traders try to bounce back after the worst week of the year. As stocks are rising, Treasury yields are slipping. The 2-year yield is down 2 basis points to 4.78% after briefly hitting the highest level since July 2007 earlier this morning. The 10-year yield is down 4 basis points to 3.92%. Although earnings season is winding down, traders are looking ahead to results from some key retailers this week. Target (TGT), Costco (COST), Lowe’s (LOW), and Macy’s (M) are all scheduled to report in the days ahead. Durable Goods Orders Slide Durable goods orders fell more than expected in January as consumers pull back on spending on big items. Durable goods are items manufactured to last three years or more, like appliances, TVs, autos, and more. Orders slid 4.5% at the start of the year, worse than expectations for a 3.6% decline. A 13.3% drop in transportation equipment orders propelled that decline. December’s increase was revised to 5.1% from 5.6% previously. But core durable goods orders, which exclude transportation, rose 0.7%, beating expectations for a 0.1% increase. Union Pacific Rallies After CEO Steps Down Union Pacific (UNP) shares are rallying 10.2% ahead of the open after the company’s CEO announced he will step down over the weekend. On Sunday, CEO Lance Fritz said, “Union Pacific has been my home for 22 years and I am confident that now is the right time for Union Pacific’s next leader to take the helm. I look forward to working with the Board as we identify our next CEO to lead the Company into the future.” The rail operator said it expects to name his replacement this year. The decision came after hedge fund Soroban Capital Partners called for Fritz to be replaced in a letter on Saturday. In a letter, the group said, “Unlike typical shareholder engagements which come with numerous demands, Soroban has only one ask — install new leadership who can get the trains to operate safely and on time.” Soroban urged Union Pacific to consider its former COO Jim Vena for the position. Seagen Jumps On Reported Pfizer Takeover Seagen (SGEN) shares are up 13.3% in premarket trade following reports that Pfizer (PFE) is in talks to buy the company. The Wall Street Journal first reported that Pfizer is in discussions to acquire the biotech company in a deal worth more than $30 billion. The talks are reportedly still in the early stages. Seagen currently has a market value of more than $30 billion so any buyout would be at a premium to that.
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