4 Tech Stocks on the Earnings Radar
We have mixed markets around the world to start the week. In Asia, the Hang Seng was down 6%ish after Xi secured his third term. In Europe, the former Chancellor Sunak is the favorite after Boris pulled out. SPX futures were above 3800 last night and below 3725 early this morning. They are now firmer. We’ll see if the Inverse H&S pattern can measure a move to 3800-3900 in the next week or so. Holding 3656 keeps this active sequence intact. There are lots of big earnings this week. MSFT, GOOGL, and V are on Tuesday. On Wednesday, there is META and BA. On Thursday, it’s AAPL, AMZN, SHOP, and MRK. Now let’s go through 4 tech names that are reporting this week: AAPL cleared a small downtrend on Friday as it held $141.50 all week. I’m long and will see if it can go green and move towards $148.50 or higher pre-earnings Thursday. NFLX was a great focus last week. Some are long vs. $262 and there was a nice play Friday as it cleared $279.30 to see $290.75. I’m still long stock and I have a new call spread. The gap gets filled up to $331. Use your tier system. MSFT reports tomorrow, it will be important as it made new lows on the year. How it responds will give some clues if this rally attempt can continue. For today, see how it deals with $243 pivot resistance. GOOGL is in a troubled sector that made new lows on the year. Look at SNAP and META. It will be important to hear what it says Tuesday and how it responds. I’m staying away for now. META reports Wednesday. It’s made new lows on the year a few times in the past few months. On Friday, it came off the lows. I’m avoiding it but will see where it is Wednesday for an option play. We’ll see if it can hold above $126 to keeps some pressure off. Positions Disclosure:
Continue Reading -->Coffee With Greta: Stocks Build on Best Week Since June
DJIA Futures: +212 (+0.7%) SPX Futures: +24 (+0.6%) NASDAQ Futures: +37 (+0.3%) Good morning friends! Futures are rising as traders try to build on the market’s best week since June. Let’s get right to it! Big Week of Earnings, Inflation Data The market is looking to build on last week’s rally after the major indexes all logged their largest weekly gains since June. Megacap tech names are all set to report Q3 results this week. Microsoft (MSFT) and Alphabet (GOOGL) report Tuesday, Meta (META) Wednesday, with Apple (AAPL) and Amazon (AMZN) on Thursday. The focus is on GOOGL and META after Snap’s (SNAP) revenue miss last week. This week will also cap off with the Fed’s preferred inflation gauge coming out Friday morning. The core PCE price index is expected to have slowed in September after accelerating more than expected in August. Tesla Cuts Car Prices in China Tesla (TSLA) shares are down 2.8% ahead of the open after the electric automaker cut some of its car prices in China. The starting price for the Model 3 is now 265,900 Chinese yuan ($36,615) from 279,900 yuan ($38,415.99). The Model Y price dropped to 288,900 yuan ($39,779.14) from 316,900 yuan ($43,634.51). The cuts reverse some of the earlier price increases Tesla implemented due to inflation of raw material costs. They also come after CEO Elon Musk said “China is experiencing a recession of sorts” last week. Tesla delivered a record 83,135 vehicles in China in September, a monthly record for the company. Chinese Tech Stocks Tumble Chinese tech stocks listed in the U.S. are tumbling as President Xi Jinping tightens his grip on power in the country. Alibaba (BABA) shares are dropping 10.9% in premarket trade with Baidu (BIDU) tumbling 11.9%. Xi paved the way for his third term as president over the weekend and packed the core committee of power with loyalists. The private tech sector in China has been under threat from Xi in recent years and those policies are expected to continue with him remaining in power. Oil Prices Drop on Weak China Demand Oil prices are falling this morning after Chinese data showed weak demand in September. West Texas Intermediate crude futures are down 2% to $83 bbl while Brent crude futures are down 1.6% to $92 bbl. China imported 9.79 million barrels per day of crude in September, down 2% year over year. Eurozone Business Activity Drops European business activity contracted further this month as surging energy costs put pressure on the economy. The euro zone’s flash composite PMI fell to 47.1 in October from 48.1 last month. Any reading below 50 represents a contraction. Germany is seeing the worst slowdown so far with business activity falling to 44.1 from 45.7. The euro dropped against the U.S. dollar following that data, trading at $0.982.
Continue Reading -->Coffee With Greta: Social Media Stocks Slide After SNAP’s Q3 Miss
DJIA Futures: -200 (-0.7%) SPX Futures: -27 (-0.7%) NASDAQ Futures: -133 (-1.3%) Good morning friends! Futures are slipping as traders digest the latest batch of earnings. Let’s get right to it! Snap Plunges on Revenue Miss Snap Inc (SNAP) shares are plunging 28% ahead of the open after missing Q3 revenue expectations. Here’s how the social media giant’s results compared to analysts’ expectations: EPS: $0.08 vs a small loss expected Revenue: $1.13 billion vs $1.14 billion expected Global Daily Active Users: 363 million vs 358.2 million expected Revenue was up just 6% year over year, the first single-digit growth since Snap went public in 2017. Even as daily active users rose 19% compared to a year ago, average revenue per user dropped 11%. In its letter to investors, the company said it is struggling with reduced spending from advertisers. The letter said, “We are finding that our advertising partners across many industries are decreasing their marketing budgets, especially in the face of operating environment headwinds, inflation-driven cost pressures, and rising costs of capital. The company declined to give Q4 guidance. Snap’s revenue miss is dragging down other stocks in premarket trade with Pinterest (PINS) tumbling 8.2%, Meta (META) down 4%, and Alphabet (GOOGL) falling 2%. American Express Slips Despite Earnings Beat American Express (AXP) shares are falling 4.8% in premarket trade despite beating Q3 expectations on the top and bottom line. Here’s how the credit card company’s results compared to analysts’ expectations: EPS $2.47 vs $2.40 expected Revenue: $13.56 billion vs $13.52 billion expected Card-member spending jumped 21% in the quarter, with travel spending surging 57%. American Express built up its loan loss reserves by $387 million in anticipation of a weakening economy. The company hiked its full-year EPS forecast to $9.25 to $9.65. Treasury Yields Extend Rally Treasury yields are up again today with the 10-year hitting a fresh 14-year high. The 10-year yield is up 6 basis points to 4.3% while the 2-year yield is up just about 1 basis point to 4.61%. The recent rally in yields comes amid ramped-up concerns about a recession. Philadelphia Fed President Patrick Harker said in a speech Thursday, “We are going to keep raising rates for a while. Given our frankly disappointing lack of progress on curtailing inflation, I expect we will be well above 4% by the end of the year.” Fed Governor Lisa Cooke echoed those comments, saying inflation is “too high” and the Fed will continue rate hikes “until the job is done.” Oil Prices Steady Oil prices are flat today as concerns about higher interest rates offset hopes of higher Chinese demand and production cuts. West Texas Intermediate crude futures are down 0.1% to $84 bbl while Brent crude futures are slipping 0.1% to $92 bbl. Several Fed officials made hawkish comments this week, tamping down optimism about increased demand in China as the country loosens Covid restrictions. Key Earnings Next Week Several mega-cap names are set to report Q3 results next week, here’s a look at the key reports on the calendar: Tuesday AM: Coca-Cola (KO), General Electric (GE), UPS (UPS), General Motors (GM), 3M (MMM) Tuesday PM: Microsoft (MSFT), Alphabet (GOOGL), Twitter (TWTR) Wednesday AM: Boeing (BA) Wednesday PM: Meta (META), Ford (F) Thursday AM: Caterpillar (CAT), Shopify (SHOP), Southwest Airlines (LUV) Thursday PM: Apple (AAPL), Amazon (AMZN), Pinterest (PINS) Friday AM: Exxon Mobil (XOM), Chevron (CVX)
Continue Reading -->Coffee With Greta: UK’s Truss Is Out
DJIA Futures: +60 (+0.2%) SPX Futures: +1 (+0.01%) NASDAQ Futures: -21 (-0.2%) Good morning friends! Futures are mixed as traders digest the latest batch of Q3 earnings. Let’s get right to it! U.K. Prime Minister Resigns U.K. Prime Minister Liz Truss resigned from her position today after implementing a failed tax-cutting budget that rocked financial markets. In a statement, Truss said, “We set out a vision for a low-tax, high-growth economy that would take advantage of Brexit. I recognize though, given the situation, I cannot deliver the mandate on which I was elected by the Conservative Party. I have therefore spoken to His Majesty the King to announce that I am resigning as leader of the Conservative Party.” Truss had faced pressure from her own party to step down with reports saying more than 100 MPs had written letters of no confidence in the prime minister. On September 23, her finance minister announced a “mini-budget” that included a series of unfunded tax cuts. That plan caused extreme turmoil in the British bond market and imploded the value of the pound. Most of the policies have since been reversed by the new finance minister. Tesla Slips As Q3 Revenue Falls Short Tesla (TSLA) shares are falling 5.7% ahead of the open after reporting mixed Q3 results. Here’s how the electric automaker’s results compared to analysts’ expectations: Adjusted EPS: $1.05 vs $0.99 expected Revenue: $21.45 billion vs $21.96 billion expected Automotive gross margins were unchanged from Q2 at 27.9%. CEO Elon Musk was upbeat about Tesla’s future on the earnings call. He said, “I can’t emphasize enough we have excellent demand for Q4 and we expect to sell every car that we make for as far into the future as we can see. The factories are running at full speed and we’re delivering every car we make, and keeping operating margins strong.” The automaker reiterated its previous guidance saying, “Over a multi-year horizon, we expect to achieve 50% annual growth in vehicle deliveries.” IBM Tops Q3 Expectations IBM (IBM) shares are up 4.2% in premarket trade after beating Q3 expectations on the top and bottom line. Here’s how the tech company’s results compared to analysts’ expectations: Adjusted EPS: $1.81 vs $1.77 expected Revenue: $14.11 billion vs $13.51 billion expected The company hiked its full-year revenue forecast following that beat. The CEO said, “With our year-to-date performance, we now expect full-year revenue growth above our mid-single digit model.” American Airlines Returns to Profitability American Airlines (AAL) shares are up 1.4% ahead of the open after topping Q3 estimates. Here’s how the airline’s results compared to analysts’ expectations: Adjusted EPS: $0.69 vs $0.56 expected Revenue: $13.46 billion vs $13.42 billion expected Revenue hit a record-high during the quarter and was up 13% from 2019 levels. That jump came even as American flew 10% less as travelers paid higher prices. The airline forecast total Q4 revenue will be up 13% compared to 2019 with adjusted EPS between $0.50 and $0.70. Weekly Jobless Claims Drop to 3-Week Low Weekly jobless claims dropped to a 3-week low last week as the impact of Hurricane Ian fades away. The Labor Department reported 214,000 Americans filed initial claims for unemployment benefits last week. That was down by 12,000 from the previous week and lower than economists’ expectations for an increase to 230,000. Existing Home Sales Expected to Fall The National Association of Realtors reports existing home sales for September at 10:00 a.m. ET. Economists expect that report to show sales slowed last month to a seasonally adjusted annual rate of 4.70 million units from 4.80 million in August. The housing market has slowed rapidly in recent months as mortgage rates hit the highest levels seen in more than 20 years. Upcoming Earnings Here are the key companies set to report earnings after the market close today: Snap (SNAP)
Continue Reading -->Coffee With Greta: Is This Netflix’s Big Comeback?
DJIA Futures: -186 (-0.6%) SPX Futures: -28 (-0.8%) NASDAQ Futures: -76 (-0.7%) Good morning friends! Futures are dropping despite strong Q3 results from several companies as economic concerns continue to weigh on the market. Let’s get right to it! Netflix Crushes Earnings Expectations Netflix (NFLX) shares are surging 11.1% ahead of the open after crushing Q3 earnings and user growth expectations. Here’s how the streaming giant’s results compared to analysts’ estimates: EPS: $3.10 vs $2.13 expected Revenue: $7.93 billion vs $7.837 billion expected New global paid net subscribers: 2.41 million vs 1.09 million expected That user growth was more than double Netflix’s own projection for just 1 million and 1.43 million of the total were in the Asia Pacific region. The company expects to add 4.5 million subscribers in the next quarter and revenue of $7.8 billion. Netflix said it is “very optimistic” about its new ad supported tier that launches next month. United Airlines Rallies After Reporting Q3 Profit, Upbeat Outlook United Airlines (UAL) shares are up 5.4% in premarket trade after beating Q3 expectations on the top and bottom line. Here’s how the airline’s results compared to analysts’ expectations: Adjusted EPS: $2.81 vs $2.28 expected Revenue $12.88 billion vs $12.75 billion expected Revenue was up 13% from Q3 2019 as travelers paid higher prices for flights. United forecast adjusted EPS of $2.25 per share in Q4, sharply higher than analysts’ estimates of $0.98. The airline said it “now expects fourth quarter adjusted operating margin to be above 2019 for the first time.” Higher Prices Boost Procter & Gamble Procter & Gamble (PG) shares are up 1.6% ahead of the open after fiscal Q1 expectations. Here’s how the consumer goods giant’s results compared to analysts’ estimates: EPS: $1.57 vs $1.54 expected Revenue $20.61 billion vs $20.28 billion expected Higher prices for its products offset a 3% decline in sales volume. The CFO said, “We feel very good about the consumer reaction to our price increases because we don’t see any major trade downs.” P&G expects net sales to decline 1% to 3% in fiscal 2023 and EPS growth to be at the low end of its prior forecast of flat to up to 4%. Housing Starts Tumble New home construction fell more than expected in September. The Commerce Department reported housing starts dropped 8.1% last month to a seasonally adjusted annual rate of 1.439 million units vs 1.47 million expected. Starts were down 7.7% year over year as high rates put pressure on the market. Single-family starts fell 4.7% while multi-family starts tumbled 13.1%. Building permits rose 1.4% to a seasonally adjusted annual rate of 1.564 million units vs 1.54 million expected. Mortgage Demand Drops to 25-Year Low Mortgage demand hit a 25-year low last week as rates continue to climb. The Mortgage Bankers Association reported purchase applications fell 4% weekly and were down 38% year over year. Refinance applications fell 7% weekly and 86% annually. The drop came as the average 30-year fixed contract rate rose to 6.94% from 6.81%. That’s the highest rate on the MBA index since 2002. More buyers turned to adjustable rate mortgages amid the higher rates. The ARM share of applications rose to 12.8% last week, the highest since March 2008. Upcoming Earnings Here are the key companies set to report earnings after the market close today: Tesla (TSLA) IBM (IBM)
Continue Reading -->How Kira Turner Went from Extreme Athlete to Top Trader
Get to know Kira Turner, one of our Inner Circle moderators, in this in-depth interview. Interview Transcript* *this transcript has been edited for length and clarity Michael Comeau: Kira is a full-time professional trader out of Austin, Texas, where she lives with her three children and two dogs. She was a pro trader in the nineties, trading at cornerstone trading from 1994 to 2001. Then she moved into real estate investing, and she back to trading in 2018. One of the really interesting things about Kira is she has a lot of experience in what some would consider high risk activities. Namely rodeos. and skydiving. It turns out that rodeos are pretty dangerous about — about 20 times more dangerous than football in terms of the risk of a catastrophic injury. So this is going to be a really interesting conversation about developing nerves for trading, managing risk and keeping your head together. Kira Turner: Thank you. It’s good to be here and I never would have realized that radios were so dangerous. That’s a very interesting statistic. MC: Would you have done it if you know it was so dangerous in the first place? KT: When you’re young, you think you’re bulletproof. And so I never thought I would get hurt really doing anything. I got a couple of concussions and I had a couple of broken bones. So you can get hurt, but you never think ABOUT that when you’re a kid. MC: So that’s going to bring us to a different kind of starting point than usual. I want to talk a little bit about the type of person you are. How would you describe your own personality? KT: I would describe myself as a glass half full kind of person. So, I’m always looking for the bright side. And I’m pretty easy going, but I’m very driven, as far as making changes goes. If I see something I don’t like, you know, in myself, or in my house, or whatever, I think, what are the steps I need to take to change that? And I’ll just be on a path toward achieving my goal. And that’s been pretty consistent throughout my life. If I decide I want something, I figure out how I need to get there, and then I head in that direction. MC: How does that relate to your trading, and how you manage risk on a day to day basis? Are you saying you have little attachment to what’s in front of you? KT: I don’t know if I would say that, but sometimes it’s good not to have too much attachment. Today was a really hard day. In fact, you’re probably interviewing me on one of the hardest trading days of the year. What I will do this evening is probably take a long walk and really think about what I did today. What I could have done better, if there were trades that I took too much risk on, or should have taken more risk on, and that kind of thing. So I’ll just kind of replay today and focused on how to make it better. MC: Can you give me an example:? KT: At one point I got short the futures. There was a slow downtrend, and I didn’t take profit when I had it. I had about 100 points of profit. And I thought we would move up a little bit and then just continue our nice slow downtrend. That didn’t happen. So I ended up giving back a fair amount of my profit just to try to stay in the trade. Because on trend days, I like to get in and just keep moving my stop and just today it wasn’t the day for that. I’m should have been more careful. MC: I want to compare this to rodeos specifically. What is the mix of confidence, fear and excitement on a day like this vs. when you’re about to get on a 1,200 pound horse that could kick you in the head? How did those emotions mix for you? KT: In both cases, it’s a performance, right? So you’ve got a certain amount of time where you need to do something. It’s so psychological in both cases, and you’ve got to be mentally prepared. The key component is knowing what your risk is. On a horse, your risk might be falling off, or the horse stumbles and falls or something like that. In the market, I can control my risk even better because, depending on the size of my position, I can control how much money is at risk. Part of what I love about trading is the excitement, but it’s also because I know how much risk that I have. MC: That’s an interesting point. Because technically, anything could happen. We have all these economic issues, geopolitical issues. Everything is going crazy. So how do you assess how much is actually at risk? KT: Well, for instance, I’ve got a small biotech stock and it’s around $4. I know that, even if the whole market falls apart, it’s not probably going to go under $3.50. That’s just a low-risk position for me, so I don’t worry about that. If I’m in something that’s likely to move a lot, or that I’m afraid might move a lot, I would use options. My risk would be limited to the amount of premium that I’ve paid. If I’m actually in stock, and I’m worried about it, I lower my size. Something I’ve talked to Inner Circle members a bunch about is that if you have a lot of anxiety about a trade, and that’s keeping you up at night, for sure, you need to be in less size. If you’re worried that a loss can really damage your account and hurt your ability to trade because it eats up too much of your capital loss, then you’re in too much. You need to have a smaller position, and take
Continue Reading -->The 7 Unbreakable Rules of Bear Market Trading
A bear market can leave you broke, angry, and feeling like a fool. The bear doesn’t just want your money. He wants your sanity, confidence, and self-respect. In a bull market, you get rewarded for taking risks. And the bigger the risks, the bigger your profits. Remember 2020 through early 2021? If you bought stocks, you did well. But if you bought cryptos, NFT’s, Lamborghinis, Miami real estate, and Rolex watches, you did even better. But in a bear market, you can do what feels responsible… and still get your head handed to you. So I want you to take my 7 unbreakable rules of bear market trading and put them to work for yourself. Starting with… Rule #1: Do Not Buy Stocks Just Because They Are Down A few weeks ago, a colleague asked me: “Should I buy Zoom (ZM)? It’s down 87% off the highs and at pre-Pandemic levels.” My answer was no. And you should be able to guess why. Zoom is at $78 right now. You could have made the same “but it’s down so much” case at $100 when it was 83% off the highs. Or at $125 when it was 79% off the highs. You buy a stock because you can make a strong case for it going up. Not because it dropped by some random percentage. Because if a stock can go from $588 to $78, don’t count out $68 or $58, because… Rule #2: The Fundamentals Just Don’t Matter Sometimes According to SlickCharts.com, just 87 stocks in the S&P 500 are up this year. And most of the names in the green are in energy, defense, health care, and consumer staples. That makes sense because of the war in Ukraine and the Fed’s tighter monetary policy. So if you made money this year, it’s because you understood the environment. You most likely did some combination of the following: Got long energy Shorted tech/growth names Focused on short-term trading. It certainly hasn’t been analyzing cash flow statements and forecasting earnings. In fact, I’ve been telling my community over and over that this coming earnings season is not about earnings. Yes, there are times when fundamentals matter, but right now, it’s about whether the Fed gets back on our side. And as we saw in 2009, the market bottomed way before the numbers got better. Rule #3: Buy Ugly and Sell Beautiful One of the most unusual things about a bear market is how hard stocks can rally. The market can be on the verge of death… only to skyrocket faster and harder than you can ever imagine. But the strength tends to disappear in a flash. It’s like the sellers are pulling a prank on you. So you have to buy when it feels most wrong to buy. And you have to sell when it feels like the market is finally turning around. Take this XBI chart. As you can see, I sold some at point B, and it kept going up. You could say I sold that piece too early, but I know from experience that in this market, those gains could have been gone just minutes later. And of course, I sold more at point C, after which XBI dropped. This process of trimming and trailing has been key to Inner Circle’s success in the 2022 bear market. Rule #4: Leave Emotion At The Door This is easier said than done. But, I have a simple rule for managing your emotions when the market is spiraling out of control: Size down, because size dictates emotion. That applies whether you are going long or short. The more money you have on the line, the more stressed you’ll feel. So you don’t want to press too hard. Because when you’re wrong, your losses will be smaller. And yes, you must get used to taking losses. And when you’re right, you’ll tell yourself “I knew I should have bought more.” But you have to remember that since bear market rallies are so powerful, you can make quite a bit of money from smaller positions. So don’t worry about missing out. As long as you can hit singles and doubles while minimizing your losses, the money will pile up. Rule #5. Averaging Down is Pointless In a bear market, you could be tempted to buy a stock like Tesla (TSLA) at $250. Then you’ll watch it tick down to $245, then $240. So you buy a few hundred more shares. It hits $230 and you buy another 100 shares. And so on. Before you know it, you’re out $100,000 because you bought a “good” stock on sale. And just because the bear can be so cruel, you hit the eject button… right before the stock goes up $100 in a week off a strong earnings report. Instead, be ready to dump anything that is not working. Since bear markets gyrate so much, odds are you’ll have another chance to get in down the road. Averaging down is for bull markets only. And even then you have to be careful. Rule #6: Always Have Capital on Hand Bull markets always push things too high. And on the flip side, bear markets always push things too low. You must always have capital on hand, because you want to put money to work at the extremes. And if you play it right, you can make life-changing money. Do you realize that you could have bought Apple (AAPL) under $3 in 2009? (adjusted for splits) If you bought 1,000 shares at $3, you’d be sitting on a $142,000+ position today and you’d even be collecting some dividends. These opportunities don’t come along every day, but you only need a few of them! Rule #7: Don’t Be a Hero Unless You Look Great in Tights As general life advice, you should try to be the hero in your own story. But you’re not in a movie about a trader that’s one trade away from fixing their life. Sorry Kevin
Continue Reading -->Coffee With Greta: Stocks Extend Rally On Strong Earnings
DJIA Futures: +622 (+2.1%) SPX Futures: +82 (+2.2%) NASDAQ Futures: +269 (+2.4%) Good morning friends! Futures are rallying following a series of strong earnings reports this morning. Let’s get right to it! Goldman Sachs Rallies On Earnings Beat Goldman Sachs (GS) shares are up 3.3% ahead of the open after topping Q3 expectations on the top and bottom line. Here’s how the investment bank’s results compared to analysts’ expectations: EPS: $8.25 vs $7.69 expected Revenue: $11.98 billion vs $11.41 billion expected Profit was down 43% year over year while revenue fell 12%. Both fixed-income and equities trading revenue topped expectations, offsetting a miss in investment banking revenue. Goldman’s asset management and consumer & wealth management divisions also beat estimates. CEO David Solomon officially announced a corporate reorganization that was reported earlier this week. He said, “Today, we enter the next phase of our growth, introducing a realignment of our businesses that will enable us to further capitalize on the predominant operating model of One Goldman Sachs. We are confident that our strategic evolution will drive higher, more durable returns and unlock long-term value for shareholders.” Hasbro Earnings Squeezed By Inflation Hasbro (HAS) shares are slipping 0.6% in premarket trade after reporting mixed Q3 results. Here’s how the toy maker’s results compared to analysts’ expectations: Adjusted EPS: $1.42 vs $1.52 expected Revenue: $1.68 billion, in line with estimates The CEO said Hasbro’s third quarter “was further impacted by increasing price sensitivity for the average consumer” as high prices squeeze buyers. The company maintained its full-year forecast for revenue growth to be flat or slightly down. Albertsons Beats Fiscal Q2 Estimates Albertsons (ACI) shares are up 1% ahead of the open after beating fiscal Q2 expectations on the top and bottom line. Here’s how the grocery chain’s results compared to analysts’ expectations: Adjusted EPS: $0.72 vs $0.65 expected Revenue: $17.92 billion vs $17.71 billion expected. Revenue was up 8.6% year over year while same-store sales jumped 7.4%. But the cost of sales surged 9.6% and Albertsons’ gross margin contracted to 27.9% to 28.6%. Johnson & Johnson Tops Q3 Expectations, Trims Sales Guidance Johnson & Johnson (JNJ) shares are up 1.3% in premarket trade after beating Q3 expectations. Here’s how the pharmaceutical giant’s results compared to analysts’ expectations: Adjusted EPS: $2.55 vs $2.48 expected Revenue: $23.8 billion vs $23.4 billion expected Johnson & Johnson forecast full-year sales between $93 billion to $93.5 billion, down from $93.3 billion to $94.3 billion previously. The company expects full-year adjusted EPS of $10.02 to $10.07 vs $10 to $10.10 previously. Microsoft Confirms Job Cuts Microsoft (MSFT) shares are up 2.4% ahead of the open after a company spokesperson confirmed recent job cuts. The spokesperson told CNBC, “Like all companies, we evaluate our business priorities on a regular basis, and make structural adjustments accordingly. We will continue to invest in our business and hire in key growth areas in the year ahead.” Those cuts were first reported by Axios and impacted fewer than 1,000 people. Salesforce Rallies On New Investor Stake Salesforce (CRM) shares are up 6.5% in premarket trade after activist investor Starboard Value LP unveiled a stake in the company. CNBC reported Starboard’s founder said he sees significant opportunity in the software maker. He did not specify the dollar amount of his stake but said it is significant. Homebuilder Sentiment Expected to Fall The National Association of Homebuilders releases its sentiment index for October at 10:00 a.m. ET. That index is expected to fall 2 points to 44, as high mortgage rates continue to squeeze builders. That would be the 10th straight monthly decline with anything under 50 considered negative. Upcoming Earnings Here are the key companies set to report earnings after the market close today: Netflix (NFLX) United Airlines (UAL)
Continue Reading -->Coffee With Greta: Stocks Rebound From Rollercoaster Week
DJIA Futures: +344 (+1.2%) SPX Futures: +52 (+1.4%) NASDAQ Futures: +195 (+1.8%) Good morning friends! Futures are higher following a rollercoaster of a week. Let’s get right to it! Empire State Manufacturing Index Falls The New York Fed’s Empire State manufacturing index fell more than expected this month. The index dropped 7.6 points in October to negative 9.1. That’s the third straight negative reading and worse than economists’ expectations for negative 5. Any reading below 0 indicates deteriorating business conditions. The new orders index was unchanged at 3.7 while the shipments index plunged 19.9 points to negative 24.1. Unfilled orders rose by 3.8 points to negative 3.7 and the prices paid index jumped 9 points to 48.6. That’s the first increase in prices paid over the past three months. This index and the Philly Fed’s manufacturing index are both considered barometers for national factory activity. Bank of America Earnings Bank of America (BAC) shares are up 2.4% ahead of the open after topping Q3 expectations on the top and bottom line. Here’s how the bank’s results compared to economists’ expectations: EPS: $0.81 vs $0.77 expected Revenue: $24.61 billion vs $23.57 billion expected Profit fell 8% compared to a year ago as Bank of America built up its loan loss reserves by $378 million and paid $520 million in charge-offs for bad loans. But the consumer bank benefited from higher interest rates, with net interest income surging 24% to $13.87 billion. Oil Prices Rise Oil prices are higher this morning as the market digests loose monetary policy decisions from China against global recession fears. West Texas Intermediate crude futures are up 0.5% to $86 bbl while Brent crude futures are up 0.6% to $92 bbl. China’s central bank left interest rates unchanged for the second month in a row, bucking the trend of tightening monetary policy around the world. But the strength of the dollar and continued tightening from the U.S. Federal Reserve is keeping a lid on price gains today. Housing Market In Focus This Week The bulk of big economic data releases this week will focus on the U.S. housing market. The National Association of Homebuilders releases its October sentiment index at 10:00 a.m. ET on Tuesday. The Census Bureau reports housing starts and building permits for September on Wednesday. And the National Association of Realtors reports existing home sales for September on Thursday. The housing market has slowed drastically as mortgage rates have surged higher.
Continue Reading -->Coffee With Greta: Traders Digest Big Bank Earnings
DJIA Futures: +64 (+0.2%) SPX Futures: +6 (+0.2%) NASDAQ Futures: +11 (+0.1%) Good morning friends! Futures are higher as traders digest Q3 earnings from 4 of the largest banks in the U.S. Let’s get right to it! Interest Income Boosts JPMorgan Chase Q3 Profits JPMorgan Chase (JPM) shares are up 1.2% ahead of the open after topping Q3 expectations on the top and bottom line. Here’s how the bank’s results compared to analysts’ expectations: EPS: $3.12 vs $2.88 expected Revenue: $33.49 billion vs $32.1 billion expected Profit fell 17% year over year as the bank boosted its loan reserves by $808 million. Revenue jumped 10% compared to a year ago as Chase benefited from higher interest rates. Net interest income surged 34% to $17.6 billion, topping analysts’ expectations by more than $600 million. Wells Fargo Beats Q3 Expectations Wells Fargo (WFC) shares are up 1.8% in premarket trade after beating Q3 expectations. Here’s how the bank’s results compared to analysts’ estimates: Adjusted EPS: $1.30 vs $1.09 expected Revenue: $19.51 billion vs $18.78 billion expected Wells Fargo built up its credit loss reserves by $784 million last quarter, which dented profits. Net income fell more than 30% from Q3 2021. Wells Fargo’s mortgage business has been impacted by higher rates but the bank has also benefited from higher rates in retail and commercial banking. Net interest income jumped 36% due to higher interest rates and higher loan balance. Morgan Stanley’s Q3 Profit Plunges Morgan Stanley (MS) shares are down 2.8% ahead of the open after missing Q3 expectations on the top and bottom line. Here’s how the bank’s results compared to analysts’ expectations: EPS: $1.47 vs $1.49 estimate Revenue: $12.99 billion vs $13.3 billion estimate Profit tumbled 29% year over year with revenue down 12%. Morgan Stanley’s investment banking revenue tumbled 55% to $1.28 billion, in line with estimates. But investment management revenue dropped 20% to $1.17 billion, below estimates. Citigroup Beats Q3 Estimates Citigroup (C) shares are up 0.8% in premarket trade after beating Q3 expectations even as profits plunged year over year. Here’s how the bank’s results compared to analysts’ expectations: EPS: $1.63 vs $1.42 expected Revenue: $18.51 billion vs $18.25 billion expected Revenue rose 6% year over year while net income plunged 25% as the bank built up its loan loss reserves. Citigroup increased those reserves by $370 million during the quarter. September Retail Sales Fall Flat Retail sales fell flat in September as high inflation puts pressure on consumers. The Commerce Department reported retail sales were unchanged last month vs expectations for 0.3% growth. That was down from the upwardly revised 0.4% growth in August. Retail sales were up 8.2% year over year, a five-month low. Sales at motor vehicles and parts dealers fell 0.4% while gasoline sales dropped 1.4%. Restaurants and bars saw a 0.5% increase in sales and grocery store sales rose 0.4%. Retail sales excluding autos rose 0.1% vs economists’ expectations for 0%. Kroger to Buy Albertsons Kroger (KR) shares are falling 2.7% ahead of the open after announcing it will buy Albertsons (ACI). ACI shares are also down 3.7% in premarket trade. Kroger will buy Albertsons for $34.10 per share, in a deal valued at $24.6 billion. The combination of the two grocers would put the company in a close second to Walmart (WMT) as the largest U.S. grocer by market share. Both companies’ boards have unanimously approved the agreement which now needs regulatory approval. Oil Prices Fall On Recession Worries Oil prices are slipping today as recession fears take over. West Texas Intermediate crude futures are down 2% to just over $87 bbl while Brent crude futures are down 1.8% to just under $93 bbl. Both contracts are on track for weekly losses following two straight weeks of gains. In Case You Missed It Netflix (NFLX) shares jumped 5.3% after the streaming giant announced it will price its new ad-supported tier at $6.99/month. That $1 less than Disney+ and Hulu with commercials. The company said commercials will be 15 or 30 seconds long and play before and during content. There will be an average of four to five minutes of commercials per program.
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