6 Tech Names You Should Watch Today
We have mostly red arrows around the world as central banks remain hawkish in a tough fight against inflation. Powell’s remarks at Jackson hole saying it will take some pain and sacrifice brought out sellers. The SPX sliced below 4144 and 4120 to make a low of 4056. This morning it’s getting some downside follow-through. I’d think 3980-3990 holds (around the 50 day) if we get there. I’d use 5-15-30 minute lows to buy against for tactical cash flow. Pressing the morning could be tough with the Oscillator -60. AAPL did a Red Dog Reversal sell Friday around $170.14 to get some out and it hit a low of $163.56. $159ish is gap support below to measure. Or use a 5-15-30 minute low. Watch this for clues for today. MSFT hit a high of $294 and then stopped most out around $289 when the accelerated trend broke. On Friday it hit a low of $267.98. I’d cover some. Maybe there’s a trade vs. a 5-15-30 minute low if this market wants to find some footing today. AMZN stopped most out around $140.78 Now it’s just a tactical trade.See if there’s a 5-15-30 minute low to trade against. It’s in the post-earnings gap that is open down to the $123 area. GOOGL broke its ascending channel to stop most out around $119ish. It did lag on that June bounce. It made a low of $110.19 Friday. Maybe there’s a trade vs. the $108 area. META is still very challenged and might make new lows. $154 is a big area. $159.77 is micro support. NFLX had a great post-earnings sequence from $216 to hit a high of $251+ with lots of pivots to play for cash flow. Most sold into strength or used $241 as a stop. On Friday it did a Red Dog Reversal around the $234 pivot and hit a low of $223. $217ish is pretty big support. We’ll be tactical here. Scott Redler Positions Disclosure
Continue Reading -->Coffee With Greta: Focus on Jackson Hole as Inflation Slows
DJIA Futures: +20 (+0.1%) SPX Futures: -4 (-0.1%) NASDAQ Futures: -17 (-0.1%) Good morning friends! Futures are flat as the market eyes the Fed Chair’s speech at Jackson Hole after new data shows inflation slowing. Let’s get right to it! Fed Chair to Speak at Jackson Hole Fed Chair Jerome Powell is set to speak at the Jackson Hole Symposium at 10:00 a.m. ET. The market is focused on that speech for more clarity about the bank’s future plans for rate hikes. He’s expected to strike a hawkish tone on inflation and downplay expectations the Fed will begin rate cuts next year. CME Group’s FedWatch Tool shows 56.5% of traders leaning toward another 0.75% rate hike at the September Fed meeting. PCE Inflation Dips in July The Fed’s preferred inflation gauge slowed more than expected in July. The Bureau of Economic Analysis’s personal consumption expenditures price index fell 0.1% monthly and slowed to a 6.3% annual pace. That was a sharp slowdown from the 1% monthly and 6.8% annual gain in June. The core PCE price index – which excludes food, energy, and trade services and is the Fed’s favorite inflation measure – rose 0.1% monthly and 4.6% year over year. That was a slowdown from June and better than expectations for a 0.2% monthly and 4.8% annual gain. Although the data shows inflation slowing, it is still running far above the Fed’s target. Powell is expected to emphasize the bank’s commitment to lowering inflation to its target at Jackson Hole. Gap Reports Unexpected Profit Gap (GPS) shares are rallying 6.9% ahead of the open after reporting an unexpected fiscal Q2 profit. The retailer reported adjusted earnings of $0.08 per share on $3.86 billion in revenue. That was better than analysts’ expectations for an adjusted loss of $0.05 per share on $3.82 billion in revenue. Same-store sales were down 10% year over year. Gap withdrew its full-year outlook but said sales so far in fiscal Q3 have improved and the company is “cautiously optimistic” about the second half of the year. Ulta Beats Q2 Expectations Ulta Beauty (ULTA) shares are up 3.3% in premarket trade after topping fiscal Q2 expectations. The beauty retailer reported earnings of $5.70 per share on $2.3 billion in revenue. That topped analysts’ expectations for EPS of $4.99 on $2.2 billion in revenue. Revenue was up 16.8% year over year while same-store sales jumped 14.4% vs 10.5% expected. The strong results pushed Ulta to hike its full-year forecast. The company now expects earnings between $20.70 and $21.20 per share this year, up from its prior outlook of $19.20 to $20.10. Revenue is expected to range between $9.65 billion and $9.75 billion vs $9.35 billion to $9.55 billion previously. Affirm Drops on Weak Outlook Affirm Holdings (AFRM) shares are tumbling 10.7% ahead of the open despite beating fiscal Q4 revenue expectations as its outlook came up short. The buy-now-pay-later company reported a loss of $0.65 per share on $364.1 million in revenue. That was worse than analysts’ expectations for a loss of $0.58 per share but topped revenue estimates of $355 million. Gross merchandise volume (GMV) surged 77% year over year to $4.4 billion vs $4.1 billion expected. Affirm forecast fiscal Q1 GMV of $4.2 billion to $4.4 billion with revenue between $345 million and $365 million. That missed analysts’ expectations for $4.55 billion in GMV and $386 million in revenue. The company forecast full-year GMV between $20.5 billion and $22 billion with revenue from $1.625 billion to $1.725 billion. Analysts were projecting $19.15 billion in GMV and $1.91 billion in revenue. The CFO said, “In light of the uncertain macroeconomic backdrop, we are approaching our next fiscal year prudently while maintaining our focus on driving responsible growth and continuing to invest in strengthening our leadership position. We continue to expect to achieve a sustained profitability run rate, on an adjusted operating income basis, by the end of fiscal 2023.” Oil Prices Slip Oil prices are slipping today but on track for weekly gains. West Texas Intermediate crude futures are down 0.4% at $92 bbl while Brent crude futures are down 0.2% at $99 bbl. New economic data has lowered recession fears but the market remains on edge ahead of Powell’s Jackson Hole speech. The UAE also became the latest OPEC+ country today to show support for a production cut in order to support prices. In Case You Missed It You can learn how to invest the simple and easy way with my brand new course, Today I Learned How to Invest. Learn everything you need to start building the massive nest egg you deserve, in just 45 minutes!
Continue Reading -->Coffee With Greta: Positive Economic Data Boosts Stocks
DJIA Futures: +52 (+0.2%) SPX Futures: +18 (+0.4%) NASDAQ Futures: +68 (+0.5%) Good morning friends! Futures are higher after the release of some positive economic data. Let’s get right to it! Q2 GDP Contraction Revised Lower The Commerce Department’s second estimate shows the U.S. economy contracted at an annual rate of 0.6% in Q2. That was an improvement from the first estimate which showed the economy shrank 0.9% annually. The change comes as consumer spending was revised to show a 1.5% gain vs the prior estimate of 1%. It was still the second-straight quarterly decline in GDP after the 1.6% contraction in Q1. Weekly Jobless Claims Fall to One-Month Low Weekly jobless claims fell to a one-month low last week, showing no signs of surging layoffs. The Labor Department reported 243,000 Americans filed initial claims for unemployment benefits. That was down 2,000 from the previous week’s revised level and better than expectations for claims to rise to 255,000. Continuing claims fell by 10,000 to 1.42 million in the week ending August 13. Peloton Plunges On Big Fiscal Q4 Loss Peloton (PTON) shares are plunging 14.9% in premarket trade after reporting a steeper loss than expected in its fiscal fourth quarter. The connected fitness equipment maker reported a loss of $3.68 per share on $679 million in revenue. That was worse than analysts’ expectations for a loss of $0.76 per share on $682 million in revenue. The CEO said $415 million of the $1.2 billion operating loss was related to restructuring charges. He said, “The loss reflects the substantial progress we made this last quarter re-architecting the business to reduce the current and future inventory overhang, converting fixed to variable costs, and addressing numerous supply chain issue.” It was Peloton’s 6th consecutive quarterly loss but the company said it’s aiming to reach breakeven cash flow by the second half of fiscal 2023. Nvidia Tumbles on Weak Outlook Nvidia (NVDA) shares are dropping 3% ahead of the open after weak Q2 earnings and guidance. The chipmaker reported adjusted earnings of $0.51 per share on $6.7 billion in revenue. That missed analysts’ expectations for adjusted EPS of $1.26 on $8.10 billion in revenue but was in line with Nvidia’s preliminary results two weeks ago. Revenue in the gaming department plunged 33% year over year which the CFO blamed on “macroeconomic headwinds across the world”. Nvidia forecast $5.9 billion in sales in Q3 vs analysts’ estimates of $6.95 billion. Salesforce Guidance Comes Up Short Salesforce (CRM) shares are falling 8.1% in premarket trade after beating fiscal Q2 expectations but giving a disappointing forecast for the remainder of the year. The software company reported adjusted earnings of $1.19 per share on $7.72 billion in revenue. That was better than analysts’ expectations for adjusted EPS of $1.02 on $7.69 billion in revenue. Salesforce called for adjusted earnings of $1.20 to $1.21 per share in fiscal Q3 on revenue between $7.82 billion and $7.83 billion. Analysts were estimating fiscal Q3 adjusted EPS of $1.29 on $8.07 billion in revenue. The company also cut its full-year outlook, calling for EPS between $4.71 and $4.73 and $30.9 billion to $31 billion in revenue. That’s down from its previous forecast for EPS of $4.74 to $4.76 on $31.7 billion to $31.8 billion in revenue. Tesla Stock Split Takes Effect Tesla (TSLA) shares are up 1.6% ahead of the open as the automaker’s 3-for-1 stock split takes effect. The stock is trading just above $300 per share on a split-adjusted basis. Tesla’s board of directors approved the split on August 5. The company said it would provide more flexibility for employees managing their equity and would serve as a recruiting tool. This is Tesla’s second stock split in 2 years. The stock has gained about 104% since the 5-for-1 split in August 2020. Oil Prices Hold Steady Oil prices are mixed today as uncertainty continues over whether OPEC+ will cut production and the prospect of Iranian oil returning to the market. West Texas Intermediate crude futures are up 0.1% at $95 bbl while Brent crude futures are up 0.4% at $101.60 bbl. Talks are continuing between the EU, U.S., and Iran to revive the 2015 nuclear deal. Falling U.S. inventories are also putting upward pressure on prices. The Energy Information Administration reported a 3.3 million barrel drop in crude stockpiles last week vs a 933,000 barrel decline expected. Gasoline inventories fell by 27,000 barrels vs expectations for a 1.5 million barrel drop. In Case You Missed It The National Association of Realtors reported pending home sales fell 1% in July. That was smaller than economists’ expectations for a 3% drop. Pending sales were down 19.9% year over year. These represent contracts signed last month with sales expected to close in 30 to 60 days. You can learn how to invest the simple and easy way with my brand new course, Today I Learned How to Invest. Learn everything you need to start building the massive nest egg you deserve, in just 45 minutes!
Continue Reading -->Coffee With Greta: Nordstrom Plunges on Weak Outlook
DJIA Futures: -25 (-0.1%) SPX Futures: +1 (+0.02%) NASDAQ Futures: +1 (+0.01%) Good morning friends! Futures are flat as the market continues to struggle. Let’s get right to it! Nordstrom Drops After Slashing Forecast Nordstrom (JWN) shares are tumbling 12.7% ahead of the open after cutting its full-year outlook despite beating Q2 expectations. The retailer reported adjusted earnings of $0.81 per share on $4.1 billion in revenue. That was better than analysts’ expectations for adjusted EPS of $0.80 on $3.97 billion in revenue. Nordstrom now expects annual sales growth of 5% to 7%, down from its previous forecast for 6% to 8% growth. The company called for full-year adjusted EPS between $2.30 and $2.60, down from $3.20 to $3.50. The CEO said, “Customer traffic and demand decelerated significantly beginning in late June, predominantly at Nordstrom Rack. We are adjusting our plans and taking action to navigate this dynamic in the short term, including aligning inventory and expenses to recent trends.” Peloton Rallies on Amazon Deal Peloton (PTON) shares are rallying 7.5% in premarket trade after reaching a deal to sell its fitness equipment and apparel on Amazon (AMZN). The items now sold on Amazon include the original Peloton Bike and its strength product the Peloton Guide. The Bike+ and Tread will not be sold on the site. This is Peloton’s first-ever partnership with another retailer to sell its products. The company’s cycling shoes, bike mat, weights, yoga blocks, water bottle, and heart rate armband will also be on Amazon. The branded apparel sold on the site will include sports bras, leggings, shorts, tank tops, hats, and joggers. The Chief Commercial Officer said, “This is a really good start for us, with a digital retailer, to test the waters.” Mortgage Demand Slips, First-Time Buyers Return Mortgage demand is continuing to weaken amid higher rates but the latest data shows first-time buyers returning to the market. New data from the Mortgage Bankers Association shows purchase applications fell 1% last week and were down 21% year over year. But there was a jump in demand for loans with lower down payments, which are typically used by first-time homebuyers. Conventional applications fell 2% while government applications increased 4%. Refinance applications dropped 3% weekly and plunged 83% annually. The drop came as rates moved higher. The average 30-year contract fixed rate rose to 5.65% from 5.45% the previous week. Market Split on Next Fed Rate Hike The market is split on their expectations for the next Fed rate hike amid increasing signs the U.S. economy is slowing. CME Group’s FedWatch Tool shows 43.5% of traders expect the bank to pivot to a 0.5% hike. While 56.5% are expecting the Fed to stick with a 0.75% rate hike. The market is looking for more clarity from Fed Chair Jerome Powell who is set to speak at the Jackson Hole Symposium Friday morning. Biden’s Decision On Student Loan Forgiveness Expected Today President Biden is expected to make a decision on student loan forgiveness as early as today. The White House is facing an end-of-August deadline when the current student loan forbearance program expires. Biden has been under pressure to forgive some loans not just pause payments. Three sources told NBC News that he plans to extend forbearance again and forgive loans up to $10,000 for those making less than $125,000 per year. The White House refused to comment on those reports. Oil Prices Climb Oil prices are climbing again today amid continued talks about OPEC+ cutting production. West Texas Intermediate crude futures are up 0.7% to over $94 bbl while Brent crude futures are up 0.8% to $101 bbl. The American Petroleum Institute also reported another drop in U.S. inventories. The API report showed crude stockpiles fell by 5.6 million barrels last week, sharply higher than analysts’ expectations for a 900,000 barrel decline. The Energy Information Administration reports official supply levels later today. In Case You Missed It The Commerce Department reported new home sales plunged 12.6% in July to a seasonally adjusted annual rate of 511,000 units. That was lower than expectations and the slowest sales pace since January 2016. New home sales were down 29.6% year over year. The supply of new homes for sale rose 18.5% from June, representing a 10.9-month supply at the current sales pace. That’s the highest level of supply since March 2009. You can learn how to invest the simple and easy way with my brand new course, Today I Learned How to Invest. Learn everything you need to start building the massive nest egg you deserve, in just 45 minutes!
Continue Reading -->Coffee With Greta: Stocks Slip After Worst Day Since June
DJIA Futures: -22 (-0.1%) SPX Futures: -2 (-0.04%) NASDAQ Futures: -4 (-0.03%) Good morning friends! Futures are down slightly following the worst day since June as traders digest a mix of Q2 earnings. Let’s get right to it! Macy’s Tops Q2 Expectations Macy’s (M) shares are up 1.5% ahead of the open after beating fiscal Q2 expectations. The retailer reported adjusted earnings of $1 per share on $5.6 billion in revenue. That was better than analysts’ expectations for adjusted EPS of $0.85 on $5.49 billion in revenue. Despite the strong quarter, Macy’s cut its full-year forecast in anticipation of slowing consumer spending on discretionary items like clothing. The company now expects 2022 revenue between $24.34 billion and $24.58 billion vs its previous outlook for $24.46 billion to $24.7 billion. Macy’s forecast annual adjusted EPS between $4.00 and $4.20, down from $4.53 to $4.95. Analysts were estimating adjusted EPS of $4.51 on $24.36 billion in revenue. Dick’s Sporting Goods Hikes Outlook After Strong Q2 Dick’s Sporting Goods (DKS) shares are up 2.4% in premarket trade after beating Q2 expectations and hiking its full-year outlook. The sporting goods retailer reported adjusted earnings of $3.68 per share on $3.11 billion in revenue. That was better than analysts’ expectations for adjusted EPS of $3.58 on $3.07 billion in revenue. Dick’s now expects full-year adjusted earnings to be between $10 and $12 per share vs its previous forecast of $9.15 to $11.70. The company expects comparable store sales to decline between 6% and 2% this year, down from its previous forecast for an 8% to 2% decline. Zoom Tumbles After Cutting Forecast Zoom Video Communications (ZM) shares are tumbling 11.8% ahead of the open after reporting mixed fiscal Q2 results and cutting its full-year forecast. The video-calling software company reported adjusted earnings of $1.05 per share on $1.10 billion in revenue. That topped analysts’ expectations for adjusted EPS of $0.94 but missed estimates for $1.12 billion in revenue. Revenue rose 8% year over year, down from 12% growth in fiscal Q1. The CFO said, “We have implemented initiatives focused on driving new online subscriptions, which have shown early promise but were not enough to overcome the macro dynamics in the quarter.” Zoom forecast adjusted fiscal Q3 earnings of $0.82 to $0.83 per share on $1.095 billion to $1.100 billion in revenue. That was lower than analysts’ estimates for adjusted EPS of $0.91 on $1.15 billion in revenue. The also lowered its full-year outlook, calling for adjusted earnings of $3.66 to $3.69 per share and $4.385 billion to $4.395 billion in revenue. The mid-range of that forecast would represent revenue growth of just 7% annually. Oil Prices Climb on Supply Concerns Oil prices are climbing higher today as supply concerns take focus again. West Texas Intermediate crude futures are up 1.2% to $91.50 bbl while Brent crude futures are up 1.1% to $97.50 bbl. The jump comes after Saudi Arabia’s energy minister floated the idea of OPEC+ cutting production in the months ahead to support prices. The latest data is also expected to show another drop in U.S. crude inventories. The American Petroleum Institute releases its inventory report today followed by the Energy Information Administration on Wednesday. In Case You Missed It Ford (F) announced plans to cut 3,000 jobs Monday in an effort to reduce costs. The majority of those cuts will be in North America and include 2,000 salaried positions and 1,000 agency jobs. Executives announced the layoffs in a message to employees which said, “Building this future requires changing and reshaping virtually all aspects of the way we have operated for more than a century.” A new survey found the majority of U.S. economists expect a recession in 2023 caused by the Fed’s response to inflation. 72% of respondents to the National Association of Business Economics survey said the recession will begin by the middle of next year. 19% said the economy is already in a recession. You can learn how to invest the simple and easy way with my brand new course, Today I Learned How to Invest. Learn everything you need to start building the massive nest egg you deserve, in just 45 minutes!
Continue Reading -->Coffee With Greta: Traders Look Ahead to Jackson Hole
DJIA Futures: -342 (-1%) SPX Futures: -52 (-1.2%) NASDAQ Futures: -202 (-1.5%) Good morning friends! Futures are dropping as traders look ahead to Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium this week. Let’s get right to it! Economy, Fed’s Jackson Hole Symposium in Focus Inflation and the Fed are back in focus this week ahead of some key economic data and a speech from Fed Chair Jerome Powell. The Commerce Department releases its second estimate of Q2 GDP on Thursday after the first showed the economy shrank 0.9% last quarter. Economists expect the revision to show a 0.5% contraction. The Bureau of Economic Analysis then releases the July PCE Price Index on Friday, which is the Fed’s preferred inflation gauge. Powell will also speak at the Jackson Hole Symposium on Friday. The market is anticipating he will sound more hawkish during that speech than he did at his press conference following the last Fed meeting. The bank is expected to continue aggressive rate hikes until they see a meaningful reduction in inflation. AMC Shares Tank on Cineworld Bankruptcy Warning AMC Entertainment (AMC) shares are plunging 37.9% ahead of the open after rival Cineworld said today it is considering filing for bankruptcy. Cineworld Group, which owns Regal Cinemas in the U.S., said, “The strategic options through which Cineworld may achieve its restructuring objectives include a possible voluntary Chapter 11 filing in the United States and associated ancillary proceedings in other jurisdictions as part of an orderly implementation process.” The company added that any filing “would be expected to allow the group to access near-term liquidity and support the orderly implementation of a fully funded deleveraging transaction.” AMC also debuted its new class of preferred shares “APE” units today. In a tweet Sunday, the CEO reminded shareholders, “the value of your AMC investment will be the combination of your AMC shares and your new APE units. An AMC share plus a new APE unit added together — compared to just an AMC share previously.” Bed Bath & Beyond Continues to Tumble Bed Bath & Beyond (BBBY) shares are tumbling 17.1% in premarket trade, after plummeting 40.5% on Friday. The recent drop comes after GameStop (GME) Chairman Ryan Cohen sold off his entire stake in the retailer. Bloomberg also reported over the weekend that some suppliers are restricting or halting shipments to Bed Bath & Beyond after the company fell behind on payments. Tesla to Hike Price of Full Self Driving Software Tesla (TSLA) shares are slipping 2.7% ahead of the open after after CEO Elon Musk announced the company will hike prices for its full self driving software. In a tweet Sunday, Musk said, “After wide release of FSD Beta 10.69.2, price of FSD will rise to $15k in North America on September 5th. Current price will be honored for orders made before Sept 5th, but delivered later.” Customers can currently pay $12,000 upfront for FSD or $199 per month on a subscription basis. Musk did not address whether the subscription price would change. Oil Prices Slump on Economic Growth Fears, Surging Dollar Oil prices are lower today on continued fears over a recession and as the dollar surges higher. West Texas Intermediate crude futures are down 0.4% to under $90.50 bbl while Brent crude futures are slipping 0.5% to $96 bbl. The U.S. dollar index popped to a five-week high today after hawkish comments from Richmond Fed President Thomas Barkin on Friday. Aggressive rate hikes from the Fed are expected to cause a slowdown in economic growth, dragging down oil demand. In Case You Missed It You can learn how to invest the simple and easy way with my brand new course, Today I Learned How to Invest. In just 45 minutes, you can go from a total beginner who knows nothing to someone who’s ready to buy their first stock. Start building the massive nest egg you deserve today!
Continue Reading -->Coffee With Greta: Traders Dump $BBBY
DJIA Futures: -262 (-0.8%) SPX Futures: -42 (-1%) NASDAQ Futures: -154 (-1.1%) Good morning friends! Futures are falling with the S&P 500 on track to snap its 4-week winning streak. Let’s get right to it! $BBBY Plunges As Ryan Cohen Sells Stake Bed Bath & Beyond (BBBY) shares are plunging -42.4% ahead of the open after activist investor and GameStop (GME) chairman Ryan Cohen sold off his stake in the company. An SEC filing shows Cohen’s venture capital firm RC Ventures dumped all of its BBBY stock on Wednesday at a range of prices between $18.68 and $29.22 per share. Those shares were originally purchased at an average of roughly $15.34 per share in March. RC Ventures also sold the call options it purchased earlier this week. GM To Reinstate Dividend, Increase Share Buyback Program General Motors (GM) shares are up 1.5% in premarket trade after the automaker announced it is reinstating its quarterly dividend. The company cut that dividend during the early days of the pandemic to preserve cash. GM’s board of directors authorized a $0.09 per share dividend, roughly 76% smaller than the $0.38 per share dividend when it was suspended in April 2020. CEO Mary Barra said progress on “key strategic initiatives has improved our visibility and strengthened confidence in our capacity to fund growth while also returning capital to shareholders.” The first dividend will be paid September 15 to all shareholders of record as of August 31. GM is also resuming its share buyback program and increasing it to $5 billion of common stock, up from $3.3 billion previously. Foot Locker Surges on Strong Earnings, CEO Transition Foot Locker (FL) shares are rallying 21% ahead of the open after beating Q2 expectations. The sneaker retailer reported adjusted earnings of $1.10 per share on $2.07 billion in revenue. That was better than analysts’ expectations for EPS of $0.80 per share and in line with revenue estimates. Foot Locker’s same-store sales fell 10.3% year over year vs analysts’ expectations for a 14.6% decline. The company cut its full-year adjusted EPS outlook to $4.25 to $4.45 down from $4.25 to $4.60. Analysts were estimating $4.42 per share. Foot Locker also announced its CEO will retire Sept 1 and will remain executive chairman until January 31, 2023. Former Ulta Beauty (ULTA) CEO Mary Dillon will become CEO effective September 1. Dillon said, “I am thrilled to be joining Foot Locker, an iconic company that possesses a strong set of values and focus on the customer experience as well as tremendous growth opportunities.” Oil Prices Drop As Recession Fears Take Over Oil prices are lower today as recession fears overpower demand concerns. West Texas Intermediate crude futures are down 1.5% to $89 bbl while Brent crude futures are down 1.8% to under $95 bbl. Both are on track for weekly losses of more than 3% Cryptocurrencies Plunge Major cryptocurrencies are plunging amid a sudden drop across the market after a recent rebound. CoinGecko shows Bitcoin is down 9% in the past 24 hours to $21,425 while Ethereum is down 8.9% to $1,699. That’s Bitcoin’s lowest level in more than three weeks after the coin recently pushed back above $25,000 for the first time in June. Analysts saw no real catalyst for the drop besides continued concerns across risk assets about the Fed’s tightening schedule. The July meeting minutes on Wednesday showed the bank won’t be finished with rate hikes until inflation shows significant signs of improvement across the board. The sudden drop in the crypto market is weighing on Coinbase (COIN) with shares down 9.4% in premarket trade. In Case You Missed It The National Association of Realtors reported existing home sales fell 5.9% in July to a seasonally adjusted annual rate of 4.81 million units. That was in line with expectations and the slowest pace of sales since November 2015. Supply remained tight with 1.31 million homes for sale at the end of July, a 3.3-month supply. Prices cooled a bit as the market slows. The median price of an existing home sold in July was $403,800, down from the record-high in June but up 10.8% year over year.
Continue Reading -->Coffee With Greta: Key Manufacturing Index Rebounds
DJIA Futures: +25 (+0.1%) SPX Futures: +5 (+0.1%) NASDAQ Futures: +20 (+0.1%) Good morning friends! Futures are up slightly as the market attempts to resume its recent rally. Let’s get right to it! Philly Fed Manufacturing Index Turns Positive The Philadelphia Fed’s Manufacturing Index unexpectedly turned positive this month. The general activity index rose 18.5 points to 6.2. That was better than economists’ expectations for -5.0. The new orders index jumped 20 points but remained in negative territory for the third month in a row at -5.1. The prices index declined for the 4th consecutive month. Prices paid dropped by 9 points to 43.6, the lowest since December 2020. 56% of firms reported increased input prices. This comes after the New York Fed’s Empire State Manufacturing Index plummeted 42 points to -31.3 earlier this week. That was the second largest decline on record. The two regional reports are seen as barometers for the broader U.S. manufacturing sector. Weekly Jobless Claims Stabilize Weekly jobless claims dipped in mid-August and appear to have stabilized. The Labor Department reported 250,000 Americans filed initial unemployment claims last week, down 2,000 from the revised 252,000 the prior week. The previous week was revised lower from 262,000. The latest increase was smaller than economists’ expectations for new claims to rise to 260,000. Continuing claims rose by 7,000 to 1.44 million in the week ending August 6. Kohl’s Tumbles After Cutting Outlook Kohl’s (KSS) shares are falling 7.4% ahead of the open after topping Q2 expectations but cutting its full-year outlook. The retailer reported adjusted earnings of $1.11 per share on $4.09 billion in revenue. That was better than analysts’ expectations for adjusted EPS of $1.03 on $3.85 billion in revenue. Kohl’s now expects net sales in 2022 to fall 5% to 6% year over year vs its previous outlook for growth to be flat up to 1%. The company also forecast full-year adjusted EPS between $2.80 and $3.20, down sharply from earlier guidance of $6.45 to $6.85. Kohl’s said its middle-income customers have been squeezed by inflation, putting a damper on discretionary spending. The CEO said the company is adjusted its business plan and taking action to reduce inventory and expenses. Ryan Cohen Reveals Intent to Sell $BBBY Stake Bed Bath & Beyond (BBBY) shares are tumbling 14.5% in premarket trade after investor and GameStop (GME) Chairman Ryan Cohen revealed his intent to sell his stake in the company. A Form 144 filing with the SEC shows Cohen’s investment firm RC Ventures intends to sell 9.45 million BBBY shares. That represents the total amount of shares it holds. Cohen first revealed his more than 10% stake in the company in March and purchased January 2023 call options on more than 1.67 million shares earlier this week. BBBY shares surged 11.8% on Wednesday after those call options were revealed Tuesday. The stock has skyrocketed about 300% so far in August as part of the latest meme stock rally. Oil Prices Rise As U.S. Inventories Drop Oil prices are rising after new data showed much lower inventories than expected in the U.S. West Texas Intermediate crude futures are up 1.4% to over $89 bbl while Brent crude futures are up 1.7% to over $95 bbl. The Energy Information Administration reported a sharp drop in U.S. oil and gas inventories last week. Crude stockpiles fell by 7.1 million barrels vs the 1.7 million barrel decline analysts were expecting. That drop came as U.S. crude exports hit a record-high 5 million barrels per day. Gasoline inventories dropped by 4.6 million barrels as demand rose vs analysts’ expectations for a 1.7 million barrel decline. Existing Home Sales Expected to Fall The National Association of Realtors reports existing home sales for July at 10:00 a.m. ET. That report is expected to show sales dropped again last month to a seasonally adjusted annual rate of 4.81 million units. The housing market has seen a rapid slowdown as mortgage rates pile on top of record-high prices. In Case You Missed It The Fed’s July meeting minutes show the Central Bank is planning on an extended schedule of rate hikes. The report said “moving to a restrictive stance of policy” may be required to lower inflation. Fed officials indicated they would be willing to slow the pace of rate hikes when it becomes apparent inflation is slowing. The Fed continued to say all future decisions will be based on incoming data. Officials said there are few signs inflation is abating at this point and it would “take some time” before rate hikes have a meaningful impact.
Continue Reading -->Coffee With Greta: Retail Sales Fall Flat as Gas Prices Drop
DJIA Futures: -211 (-0.6%) SPX Futures: -34 (-0.8%) NASDAQ Futures: -115 (-0.8%) Good morning friends! Futures are falling after July retail sales missed expectations and Target reported a sharp drop in profits. Let’s get right to it! Retail Sales Fall Flat in July U.S. retail sales were flat in July as gas prices fell and auto sales dropped. The Commerce Department reported retail sales were unchanged last month at $682.8 billion. That missed economists’ expectations for sales to rise 0.1%. The flat sales came as gas station receipts tumbled 1.8% and car sales dropped 1.7%. Excluding autos, core retail sales rose 0.4% vs expectations for no change. That was driven by a strong 2.7% gain in online sales – boosted by Amazon Prime day – and a 1.5% gain at miscellaneous stores. Target Drops as Profits Plunge Target (TGT) shares are down 2.9% ahead of the open after missing profit expectations in the second quarter. The retailer reported earnings of $0.39 per share on $26.04 billion in revenue. That missed analysts’ expectations for EPS of $0.72 but was in line with sales estimates. Profit was down 90% year-over-year and the CFO blamed that plunge on Target’s aggressive efforts to reduce inventory. He said, “If we hadn’t dealt with our excess inventory head-on, we could have avoided some short-term pain on the profit line, but that would have hampered our longer-term potential. While our quarterly profit took a meaningful step down, our future path is brighter.” The company reiterated its full-year forecast, saying it’s now positioned for a rebound after reducing extra inventory. Lowe’s Reports Mixed Q2 Results Lowe’s (LOW) shares are up 1.1% in premarket trade after mixed Q2 earnings. The home improvement retailer reported adjusted earnings of $4.67 per share on $27.48 billion in revenue. That topped analysts’ expectations for EPS of $4.58 but fell short of revenue estimates for $28.12 billion. Comparable sales fell 0.3% year over year but home improvement sales rose 0.2%. The CEO said the home improvement consumer remained healthy in the quarter. “Rather than the DIY consumer trading down like you hear from some retailers, in many cases we were seeing the opposite,” he told CNBC. “The customer’s actually trading up to innovation and trading up for new.” Lowe’s also saw an increase in sales to professionals thanks to its new loyalty programs. The CEO said they saw double-digit growth in Pro sales for the ninth consecutive quarter. The company said it now expects full-year total and comparable sales toward the bottom of its previous outlook range while earnings are expected to be at the top end. Meme Stock Rally Continues Bed Bath & Beyond (BBBY) shares are surging 37.9% ahead of the open after surging 29.1% on Tuesday. The recent jump comes after a regulatory filing showed GameStop (GME) Ryan Cohen purchased call options on BBBY through his venture capital firm. Retail traders poured into the stock, with shares soaring as much as 70% on Tuesday. Cohen purchased call options on more than 1.6 million Bed Bath & Beyond shares with strike prices between $60 and $80. The options expire in January 2023. That means Cohen is betting the stock can rise as high as $80 by that time. BBBY closed at $20.65 per share on Tuesday. Oil Prices Fall to 6-Month Low Oil prices are hovering around 6-month lows today as recession fears weigh on the market. West Texas Intermediate crude futures are flat at $86.50 bbl while Brent crude futures are down 0.4% at $92 bbl. The fears of a global recession are outweighing new data that showed a drop in U.S. crude and gasoline stocks. The American Petroleum Institute reported Tuesday that U.S. crude inventories fell by 448,000 barrels last week vs expectations for a 117,000 barrel drop. Gasoline stockpiles fell by 4.48 million barrels. The Energy Information Administration reports official supply levels today. Analysts expect the EIA to show both crude and gasoline inventories fell by 1.7 million barrels last week. In Case You Missed It President Biden signed the $437 billion Inflation Reduction Act into law Tuesday afternoon. The tax, health, and climate legislation accomplishes several agenda items laid out in his Build Back Better plan. The bill imposes a 15% minimum corporate tax rate and includes $369 billion in funding for climate and energy policies. The legislation was approved along party lines in both chambers of Congress.
Continue Reading -->Coffee With Greta: Homebuilding Plunges in July
DJIA Futures: -45 (-0.1%) SPX Futures: -8 (-0.2%) NASDAQ Futures: -30 (-0.2%) Good morning friends! Futures are slipping as new data shows the housing market slowing further and traders digest key retail earnings. Let’s get right to it! Housing Starts, Building Permits Drop in July New home construction fell more than expected in July as higher mortgage rates put pressure on builders already struggling with high material costs. The Census Bureau reported housing starts tumbled 9.6% last month to a seasonally adjusted annual rate of 1.45 million units. That’s the lowest rate of building since September 2020 and lower than expectations for an SAAR of 1.52 million units. Single-family starts plunged 10.1% while multi-family starts dropped 10% The slowdown will continue as building permits also fell in July. The number of new permits issued fell 1.3% to a seasonally adjusted annual rate of 1.67 million units. That was better than economists’ expectations for permits to fall to an SAAR of 1.63 million units. The drop in permits was focused in single-family homes. Single-family permits fell 4.3% monthly while multi-family permits rose 2.5%. Cancelled Home-Purchase Agreements Surge A record percentage of home-purchase agreements were cancelled in July as the housing market slows rapidly. Redfin reported 63,000 contracts were cancelled last month. That represented 16.1% of homes that went under contract during July, the highest percentage on record excluding March and April of 2020. Redfin said, “The housing market is slowing as higher mortgage rates sideline many prospective homebuyers. With competition declining, the house hunters who are still in the market are enjoying newfound bargaining power–a stark contrast from last year, when they often had to pull out every stop in order to win.” Walmart Tops Q2 Expectations Walmart (WMT) shares are up 4.2% ahead of the open after beating Q2 expectations on the top and bottom line. The retailer reported adjusted earnings of $1.77 per share on $152.86 billion in revenue. That was better than analysts’ expectations for adjusted EPS of $1.62 on $150.81 billion in revenue. Same-store sales in the U.S. grew 6.5% year over year, better than estimates of 5.9% growth. Online sales rose 12% compared to a year ago and 18%. Walmart’s inventory levels in the U.S. surged 25.6% year over year as the cost of goods jumped. The company reiterated its profit warning from last month. Walmart maintained its forecast for 3% same-store sales growth in the U.S. for the rest of this year and anticipates adjusted EPS will decline between 9% and 11% for the full year. Home Depot Slips Despite Q2 Earnings Beat Home Depot (HD) shares are slipping 1% in premarket trade despite beating Q2 expectations on the top and bottom line. The home improvement retailer reported adjusted earnings of $5.05 per share on $43.79 billion in revenue. That was better than analysts’ expectations for adjusted EPS of $4.94 on $43.36 billion in revenue. Same-store sales rose 5.8% year over year vs expectations for 4.9% growth. Home Depot reiterated its guidance for full-year sales to grow about 3% compared to a year ago. The CEO and President said, “Our team has done a fantastic job serving our customers, while continuing to navigate a challenging and dynamic environment.” Oil Prices Turn Higher Oil prices have reversed earlier losses and turned higher in morning trade. West Texas Intermediate crude futures are up 0.6% to $90 bbl while Brent crude futures are up 0.3% to over $95 bbl. The market is continuing to monitor talks to revive the Iran nuclear deal. If an agreement is reached, that deal is expected to allow Iran to boost its oil production. The American Petroleum Institute will report weekly crude and gasoline inventory levels later today. In Case You Missed It The NAHB’s sentiment index tumbled into negative territory on Monday. The survey dropped 6 points in August to 49, with any reading below 50 considered negative. That was the 8th straight monthly decline and lower than economists’ expectations for 54. NAHB’s Chief Economist said the U.S. has now fallen into a “housing recession” due to tighter monetary policy and persistently high construction costs. Walt Disney (DIS) shares rose 2.2% on Monday after activist investor Dan Loeb bought a new stake in the company. Loeb disclosed that “significant stake” in a letter to Disney’s CEO on Monday. In that letter, he asked the company to consider several initiatives including a spin-off of ESPN and fully acquiring Hulu to integrate it into the Disney+ platform.
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