5 Big Earnings Reports You need to Watch
SPX futures are +20 because there’s some optimism around China’s launch of a $44B real estate fund to help work through the Debt crunch. In Europe, the resumption of the Nord Stream gas flows is a small positive. After a 10%ish move off the lows, some are asking if SPX 4000 was the high of this bear market bounce? SPX holding the 50 day of 3900ish will keep some active bulls optimistic that we can see 4073 or the 200 day above. Now let’s dig into this week’s big earnings names: GOOGL reports Tuesday and SNAP’s Numbers have many concerned here. It’s lagged this past month. It usually leads. $101-$106.50 is key support. Tuesday’s earnings reaction will be important. MSFT lagged and underperformed this recent bounce with some erratic action. On Friday it hit $265ish and was sold. I wouldn’t chase this up move but I’d watch it. Earnings are Tuesday. META also got hit on SNAP’s results. This stock has been in a bear trend for most of the year. The question is whether it will bounce like NFLX or get hit like SNAP. $154-$159 is a key support area. Earnings are Wednesday. It’s up 80 cents this morning. See if it holds or fades. $168.41 is Friday’s low. AMZN had a nice weekly move to see a high of $125.50 Friday into some key resistance. Earnings aren’t until Thursday. We’ll see where it is then. Expectations have been brought down but it’s 20% off the recent lows. See if early strength holds or fades. Friday’s low is $121.35. AAPL led this tape and expectations are high heading into earnings Thursday. On Friday, It hit $156+ before pulling back a little. See if early strength holds or fades today. Scott’s Positions Disclosure:
Continue Reading -->Coffee With Greta: Most Important Week of the Summer
DJIA Futures: +138 (+0.4%) SPX Futures: +14 (+0.4%) NASDAQ Futures: +29 (+0.2%) Good morning friends! Futures are gaining as traders gear up for a key week of earnings and economic data. Let’s get right to it! Traders Brace for Fed Week, Earnings, Inflation Data Traders are bracing for a big week of market-moving news. The Fed meeting kicks off Tuesday with the rate hike decision released Wednesday afternoon. This week also includes earnings results from big-tech names like Microsoft (MSFT), Alphabet (GOOGL), Meta Platforms (META), and more. We’ll find out if the U.S. is already in a technical recession with the release of Q2 GDP data on Thursday. And then the Fed’s favorite inflation gauge, the June Core PCE Price Index, will be released on Friday. Many analysts say this will be the “most important week of the summer”. Market Predicts 75 Basis Point Rate Hike The majority of the market is betting the Fed will stick with a 75 basis point rate hike at this week’s meeting. CME Group’s FedWatch Tool shows 77.5% of traders leaning toward that smaller move over a 100 basis point hike. The Fed has said lowering inflation is its top priority, even if it causes a recession in the meantime. Treasury Yields Rise Treasury yields are pushing higher today ahead of the Fed decision. The 2-year yield is up 2 basis points to 3.01% while the 10-year yield is up 5 basis points to 2.83%. The curve between the 2-year and 10-year yield is still inverted, which many believe is a sign of an impending recession. Treasury Secretary Janet Yellen downplayed that risk on NBC Sunday saying there are signs the U.S. economy is at risk of recession but it’s not inevitable. Oil Prices Rise Ahead of Fed Meeting Oil prices are rising as the market continues to weigh supply concerns against demand worries. West Texas Intermediate crude futures are up 1.7% to over $96 bbl while Brent crude futures are up 1.3% to $104.50 bbl. Analysts say rising fears over a global recession will likely limit short term price gains. Gas Prices Tumble U.S. gas prices fell for the 40th day in a row today. AAA shows the national average for regular gas fell more than 1 cent overnight to $4.355/gal. That’s down more than 66 cents from the record-high in June but still $1.20 higher than 1-year ago. The national average for diesel also fell 1 cent overnight to $5.412/gal. Diesel has dropped 40 cents from its record-high but is still $2.14 higher than this same time last year.
Continue Reading -->Coffee With Greta: Oh SNAP! Social Media Earnings Stink
DJIA Futures: +81 (+0.3%) SPX Futures: -4 (-0.1%) NASDAQ Futures: -40 (-0.3%) Good morning friends! Futures are mixed with tech stocks falling after disappointing Q2 earnings from two social media companies. Let’s get right to it! Snap Plummets on Disappointing Q2 Snap (SNAP) shares are plunging 31.8% in premarket trade after reporting disappointing Q2 results and announcing plans to slow hiring. The social media company reported an adjusted loss of $0.02 per share on $1.11 billion in revenue. That was worse than analysts’ expectations for an adjusted loss of $0.01 per share on $1.14 billion in revenue. Snap had 347 million global daily active users last quarter vs. expectations for 344.2 million. But the company declined to provide Q3 guidance saying, “forward-looking visibility remains incredibly challenging” and revenue so far this quarter is “approximately flat”. Snap attributed the disappointing results to slowing demand for online ads. The company said, “businesses are reassessing investment levels amid the rising cost of capital, which is further reflected in campaign budgets and the level of bids per action.” Snap said it will “substantially slow” hiring and the rate of operating expense growth. The CEO and Chief Technology Officer agreed to new employment contracts that keep them on board until at least January 2027. They will each receive an annual salary of $1 and no equity compensation. The company also announced a stock repurchasing program of up to $500 million. Twitter Slips On Weak Q2 Twitter (TWTR) shares are down 2.1% ahead of the open after missing Q2 expectations. The social media giant reported an adjusted loss of $0.08 per share on $1.18 billion in revenue. That sharply missed analysts’ expectations for earnings of $0.14 per share on $1.32 billion in revenue. Twitter said it had 237.8 million monetizable daily active users in the quarter, short of analysts’ estimates for 238.08 million. Revenue was down 1% year-over-year, which Twitter blamed on headwinds in the ad industry and “uncertainty related to the pending acquisition of Twitter by an affiliate of Elon Musk.” The company did not provide Q3 guidance due to that pending acquisition. Twitter said it had $33 million in costs related to the acquisition last quarter. Coinbase Pushes Back On SEC Coinbase (COIN) is denying claims from the SEC that it offers unregistered securities. A former Coinbase product manager, and two others, were charged by the regulator on Thursday with wire fraud in connection with an insider trading scheme involving cryptocurrencies. The SEC accused them of plotting to profit from the listing of new tokens on Coinbase before they were announced publicly. The agency also accused Coinbase of hosting unregulated securities on its platform. In a separate complaint, the SEC claimed that nine of the 25 tokens allegedly part of the insider trading scheme were securities. In a blog post, Coinbase’s Chief Legal Officer said, “Coinbase does not list securities on its platform. Period.” He said, “Coinbase has a rigorous process to analyze and review each digital asset before making it available on our exchange — a process that the SEC itself has reviewed.” The case opens the door to the SEC forcing Coinbase to classify some of the crypto it offers as regulated financial instruments. Oil Prices Extend Drop Oil prices are sliding again today amid lower demand in the U.S. during the peak summer driving season. West Texas Intermediate crude futures are down 0.9% to under $96 bbl while Brent crude futures are down 0.5% to under $104 bbl. The Energy Information Administration’s four-week average for gasoline demand was basically unchanged last week at 8.73 million barrels per day. That’s lower than a year ago. Excluding 2020, when the pandemic destroyed demand, it’s also lower than every year going back to 2000. Gas Prices Extend Slide U.S. gas prices fell for the 37th day in a row today as demand remains low. AAA shows the national average for regular gas fell nearly 3 cents overnight to $4.413/gal. The national average for diesel also fell more than 2 cents overnight to $5.455/gal. In Case You Missed It Rivian (RIVN) shares rallied 4.3% on Thursday as Amazon (AMZN) kicked off deliveries using the company’s electric vans. The online retailer is using the vans to deliver packages in several U.S. cities including Baltimore, Chicago, Dallas, Kansas City, Nashville, Tennessee, Phoenix, San Diego, Seattle, and St. Louis. Amazon said it expects to have “thousands” in more than 100 cities by the end of this year and 100,000 electric delivery vehicles in the U.S. by 2030.
Continue Reading -->How Kira Turner Went from Extreme Athlete to Elite Trader
Check out Inner Circle Moderator Kira Turner’s appearance on the 2 Bulls in a China Shop podcast: Kira shares: Her role in the Inner Circle community How she got into trading How she transitioned to trading from rodeo competitions and skydiving The odd reason she began trading How she finds here trades When she knows a position is too big The reason she changed her trading style in the past 2 years What’s working in the current market environment How to make money in news-based trades And more!
Continue Reading -->Coffee With Greta: TSLA Props Up Tech Stocks
DJIA Futures: +34 (+0.1%) SPX Futures: +13 (+0.3%) NASDAQ Futures: +81 (+0.7%) Good morning friends! Futures are higher as traders digest more Q2 earnings. Let’s get right to it! Tesla Reports Mixed Q2 Results Tesla (TSLA) shares are up 3% ahead of the open after reporting mixed Q2 results. The electric automaker reported adjusted earnings of $2.27 per share on $16.93 billion in revenue. That topped analysts’ expectations for adjusted EPS of $1.81 but missed estimates for $17.1 billion in revenue. Revenue rose 42% annually but automotive gross margins shrank to 27.9% from 32.9% in Q1 and 28.4% a year ago. That drop was caused by inflation and more competition for parts. Tesla maintained its guidance for “50% average annual growth in vehicle deliveries,” over a “multi-year horizon”. United Airlines Tumbles After Q2 Profit Miss United Airlines (UAL) shares are dropping 6.8% in premarket trade after missing Q2 profit expectations. The airline reported adjusted earnings of $1.43 per share on $12.11 billion in revenue. It was the company’s first profitable quarter since before the pandemic but fell short of expectations. Analysts were expecting adjusted EPS of $1.85 on $12.12 billion in revenue. The CEO said, “It’s nice to return to profitability — but we must confront three risks that could grow over the next 6-18 months. Industry-wide operational challenges that limit the system’s capacity, record fuel prices, and the increasing possibility of a global recession are each real challenges that we are already addressing.” United estimated its Q3 capacity will be 85% of Q3 2019 levels and Q4 capacity would rise to 90% of 2019 levels. The airline lowered its growth expectations for 2023, now expecting to fly no more than 8% over 2019 levels vs its earlier forecast for 20% growth. American Airlines Slips On Weaker Outlook American Airlines (AAL) shares are slipping 3.7% ahead of the open despite reporting a profit in Q2. The airline reported adjusted earnings of $0.76 per share on $13.42 billion in revenue. That was in line with analysts’ adjusted EPS expectations and beat revenue estimates for $13.4 billion. Revenue rose 12% compared to pre-pandemic even as American flew 8.5% less of its Q2 2019 schedule. The company’s unit costs surged 45% in the quarter compared to 2019 as fuel prices and other expenses soared. American forecast Q3 revenue will be 10% to 12% higher than 2019 levels but flight capacity will be 8% to 10% lower. Amazon Announces Healthcare Acquisition Amazon (AMZN) shares are up 1.2% in premarket trade after announcing it will buy primary healthcare provider One Medical. One Medical operates under 1Life Healthcare Inc (ONEM) and trading in the stock has been halted. Amazon will buy the company in cash for $18 per share, totaling $3.9 billion. The stock closed at $10.18 on Wednesday. The senior vice president of Amazon Health Services said, “We think health care is high on the list of experiences that need reinvention.” Weekly Jobless Claims Continue to Rise Weekly jobless claims rose unexpectedly, signaling layoffs are rising across the country. The Labor Department reported 251,000 Americans filed initial unemployment claims last week. That was up 7,000 from the previous week and higher than expectations for claims to fall to 240,000. Continuing claims rose by 50,000 to 1.38 million in the week ending July 9. ECB Raises Rates for First Time in 11 Years The European Central Bank approved its first rate hike in 11-years today. The ECB pushed its benchmark rates up by 50 basis points, bringing the deposit rate to 0%. Rates had been in negative territory since 2014. The ECB said, “The Governing Council judged that it is appropriate to take a larger first step on its policy rate normalization path than signaled at its previous meeting.” The decision comes after Eurozone inflation hit a record-high at 8.6% in June. Oil Prices Slump On Demand Worries Oil prices are falling today as demand worries squeeze the market. West Texas Intermediate crude futures are down 3.5% to $96.50 bbl while Brent crude futures are down 3.1% to $103.50 bbl The drop comes amid continued global recession fears after the ECB rate hike and as U.S. gas inventories rose sharply last week. The Energy Information Administration reported U.S. crude inventories fell by 400,000 barrels but gasoline stockpiles rose by 3.5 million barrels. The increase in gas inventories far exceeded expectations and comes as demand is slumping. Gas Prices Continue To Tumble U.S. gas prices fell for the 36th day in a row today as those high inventory levels outpace demand. AAA shows the national average for regular gas fell nearly 3 cents overnight to $4.440/gal. The national average for diesel also fell 2 cents overnight to $5.476/gal. In Case You Missed It The National Association of Realtors reported existing home sales tumbled 5.4% in June to a seasonally adjusted annual rate of 5.12 million units. That was lower than expectations and the slowest pace of sales since June 2020. The median price of an existing home sold last month rose to a new record-high of $416,000.
Continue Reading -->Coffee With Greta: Strangest Thing of the Year Is This NFLX Rally
DJIA Futures: -94, (-0.3%) SPX Futures: -11 (-0.3%) NASDAQ Futures: -22 (-0.2%) Good morning friends! Futures are lower as the market braces for more Q2 earnings. Let’s get right to it! Netflix Rallies On Smaller-Than-Expected Subscriber Loss Netflix (NFLX) shares are up 4.4% ahead of the open after reporting mixed Q2 results and a smaller subscriber loss than expected. The streaming giant reported earnings of $3.20 per share on $7.97 billion in revenue. That topped analysts’ expectations for EPS of $2.94 but missed revenue estimates for $8.035 billion. Netflix lost just 970,000 subscribers in the quarter, far below the company’s own guidance for a loss of 2 million. The “Stranger Things” producer said it expects a net addition of 1 million subscribers in Q3 vs expectations for 1.8 million. Netflix said it is aiming to unveil its new lower-cost, ad-supported tier in early 2023. Mortgage Demand Tumbles to a 22-Year Low Mortgage demand is dropping rapidly as buyers pull back due to higher mortgage rates. The Mortgage Bankers Association reported total application volume fell 6.3% last week, hitting the lowest level since 2000. Purchase applications fell 7% weekly and were 19% lower compared to the same week in 2021. Refinance applications dropped 4% weekly and plunged 80% year-over-year. The average 30-year contract rate rose to 5.82% from 5.74% the previous week. Treasury Yields Dip Treasury yields are pulling back this morning as markets attempt to gauge what the Fed will do at next week’s meeting. The 2-year yield is down 7 basis points to 3.18% while the 10-year yield is down 7 basis points to 2.95%. The yield curve is still inverted, signaling a recession is likely imminent. CME Group’s FedWatch Tool shows 66.8% of traders still expect a 0.75% hike while 33.2% expect a 1% move. Oil Prices Slip Ahead of U.S. Inventory Report Oil prices slip as the market awaits key inventory data from the U.S. West Texas Intermediate crude futures are down 1.8% at $102 bbl while Brent crude futures are down 1.9% at $105 bbl. The Energy Information Administration releases official inventory data later today. The American Petroleum Institute reported Tuesday that U.S. crude inventories rose by 1.9 million barrels last week and gasoline stockpiles rose by 1.3 million barrels. Gas Prices Continue To Tumble U.S. gas prices fell for the 35th day in a row today. AAA shows the national average for regular gas fell nearly 3 cents overnight to $4.467/gal. That’s down more than 51 cents from a month ago but still $1.30 higher than a year ago. The national average for diesel also fell nearly 2 cents overnight to $5.497/gal. Diesel prices have fallen by 32 cents in the past month but are up $2.22 compared to one year ago. Existing Home Sales Expected to Fall The National Association of Realtors reports existing home sales for June at 10:00 a.m. ET. That report is expected to show sales fell to a seasonally adjusted annual rate of 5.36 million units last month from an SAAR of 5.41 million units in May. Homebuyers have pulled back as mortgage rates rise. Freddie Mac shows the average 30-year fixed rate was 5.52% in June, up from 2.98% in June 2021. Tesla Earnings On Deck Tesla (TSLA) shares are up 0.6% in premarket trade as the electric automaker gears up to report Q2 earnings. Those results will be released after the close today. Consensus expectations are for Tesla to report earnings of $1.85 per share. The company previously reported it delivered 254,695 vehicles in the quarter. That was down 18% from Q1 as Covid restrictions in China dented production. That drop in deliveries is expected to result in lower revenue for the quarter. In Case You Missed It Twitter (TWTR) won its request for a speedy trial to force Elon Musk to go through with his $44 billion acquisition of the company. The Delaware Court of Chancery Chancellor ruled Tuesday that the five-day trial will take place in October. Twitter’s lawyer claimed a quick trial is imperative to stop the harm caused by uncertainty over the deal. But Musk’s team argued the expedited timeline will not give them ample time for discovery.
Continue Reading -->Coffee With Greta: Earnings In Focus
DJIA Futures: +169 (+0.5%) SPX Futures: +27 (+0.7%) NASDAQ Futures: +93 (+0.8%) Good morning friends! Futures are higher as Q2 earnings continue to roll in. Let’s get right to it! Johnson & Johnson Beats Profit Expectations, Trims Forecast Johnson & Johnson (JNJ) shares are up 0.8% ahead of the open after beating Q2 profit expectations. The pharmaceutical giant reported adjusted earnings of $2.59 per share on $24 billion in revenue. That topped analysts’ expectations for adjusted EPS of $2.54 on $23.8 billion in revenue. Overall revenue rose 3% year-over-year while pharmaceutical sales were up 6.7%. But Johnson & Johnson cut its full-year outlook, citing a stronger dollar. The company now expects adjusted earnings of $10 to $10.10 per share in 2022 vs previous guidance for $10.15 to $10.35. The full-year revenue forecast was lowered to $93.3 billion to $93.4 billion from $94.8 billion to $95.8 billion. Hasbro Reports Mixed Q2 Results Hasbro (HAS) shares are up 0.8% in premarket trade after mixed second-quarter results. The toymaker reported earnings of $1.15 per share vs analysts’ expectations for $0.94. But the company’s $1.34 billion in revenue was shy of estimates for $1.37 billion. Adjusted operating margins expanded to 18% from 16% even as freight costs rose. Hasbro said it saw stronger demand for its tabletop games, which cost less to produce. The company also benefited from higher prices on its toys like Nerf blasters and My Little Pony figures. IBM Beats Q2 Expectations, Stock Slips On Outlook IBM (IBM) shares are down 6% ahead of the open despite beating Q2 expectations on the top and bottom line. The company reported adjusted earnings of $2.31 per share on $15.54 billion in revenue. That topped analysts’ expectations for adjusted EPS of $2.27 on $15.18 billion in revenue. Revenue rose 9% year-over-year. The stock is dropping though after IBM cut its forecast for full-year free cash flow. The company now expects $10 billion in free cash flow for all of 2022, down from the previous range of $10 billion to $10.5 billion. Housing Starts Tumble in June U.S. home construction fell more than expected in June. The Census Bureau reported housing starts fell 2% to a seasonally adjusted annual rate of 1.56 million units. That was worse than expectation for starts to be unchanged from May at an SAAR of 1.59 million units. Starts were down 6.3% compared to June 2021. Single-family starts plunged 8.1% from May while multi-family starts jumped 15%. Building permits slowed less than expected, falling 0.6% to an SAAR of 1.69 million units vs 1.68 million expected. Single-family permits tumbled 8.1% while multi-family permits rose 13.1%. Treasury Yields Rise, 2-year/10-year Curve Remains Inverted Treasury yields are rising this morning and a key part of the yield curve is still inverted. The 2-year yield is hovering around 3.17% while the 10-year yield is at 2.99%. The market’s Fed expectations held steady from yesterday. CME Group’s FedWatch Tool shows 66.8% of traders still expect a 0.75% hike while 33.2% expect a 1% move. Oil Prices Give Up Rally Oil prices turned lower today as recession fears takeover supply concerns. West Texas Intermediate crude futures are down 1.6% to under $101 bbl while Brent crude futures are down 1.4% to under $105 bbl. The dollar also fell to a one-week low level, making oil slightly cheaper for buyers holding other currencies. The American Petroleum Institute will report U.S. supply levels later today. Gas Prices Continue To Tumble U.S. gas prices fell for the 34th day in a row today. AAA shows the national average for regular gas fell nearly 3 cents overnight to $4.495/gal. The national average for diesel also fell 2 cents overnight to $5.515/gal. In Case You Missed It Homebuilder sentiment plunged in July as buyers pullback. The NAHB sentiment index dropped 12 points to 55 this month vs expectations for 66. It was the steepest drop on record besides the plunge at the start of the pandemic. Sentiment about buyer traffic dropped 11 points to 37, solidly in negative territory. Bloomberg reported Monday afternoon that Apple (AAPL) plans to slow hiring and spending growth due to concerns over a slowing economy. Sources say the cuts will not impact all teams at the company. Apple is reportedly still planning to launch a mixed reality headset in 2023.
Continue Reading -->Coffee With Greta: Goldman Crushes Earnings Expectations
DJIA Futures: +261 (+0.8%) SPX Futures: +29 (+0.7%) NASDAQ Futures: +110 (+0.9%) Good morning friends! Futures are higher following mixed results from 2 big banks. Let’s get right to it! Goldman Sachs Crushes Q2 Expectations Goldman Sachs (GS) shares are up 3.3% ahead of the open after crushing Q2 expectations. The investment bank reported earnings of $7.73 per share on $11.86 billion in revenue. That beat analysts’ expectations for EPS of $6.58 on $10.86 billion in revenue. Profits were still down 48% year-over-year and revenue fell 23%. Goldman said its fixed-income operations generated $3.61 billion in revenue vs $2.89 billion expected, due to “significantly higher” trading activity in interest rates, commodities, and currencies. Equities trading revenue rose 11% to $2.86 billion vs $2.68 billion expect3ed. The CEO said, “We delivered solid results in the second quarter as clients turned to us for our expertise and execution in these challenging markets.” Bank of America Posts Mixed Q2 Results Bank of America (BAC) shares are down 0.4% in premarket trade after reporting mixed second-quarter results. The bank reported earnings of $0.73 per share vs $0.75 per share expected, while $22.79 billion in revenue topped estimates for $22.67 billion. Profit dropped 32% annually and revenue rose 5.6%. Net interest income surged 22% to $12.4 billion as interest rates rose. The CEO said, “Solid client activity across our businesses, coupled with higher interest rates, drove strong net interest income growth and allowed us to perform well in a weakened capital markets environment.” Non-interest expenses rose 2% due to about $425 million in regulatory costs. Investment banking fees plunged 47% to $1.1 billion vs $1.24 billion expected. Fixed-income trading revenue rose 19% to $2.3 billion while equities trading revenue rose 2% to $1.7 billion, both in line with expectations. Alphabet Stock Split Takes Effect Alphabet (GOOGL) shares are up about 0.4% ahead of the open after the company’s 20-for-1 stock split went into effect. The stock is trading around $112.50 per share after closing at $2.255.34 on Friday. Alphabet announced the split in February, in an effort to make its shares more accessible to more traders. Yield Curve Remains Inverted Treasury yields are higher this morning as a key part of the yield curve is still inverted. The 2-year yield is up 5 basis points to 3.18% while the 10-year yield is up 8 basis points to just under 3%. The market is now leaning toward a 75 basis point rate hike at next week’s Fed meeting. CME Group’s FedWatch Tool shows 66.8% of traders expect a 0.75% hike while 33.2% expect a 1% move. Oil Prices Jumps On Tight Supply Oil prices are higher as tight supply concerns offset worries about a recession and Covid lockdowns in China. West Texas Intermediate crude futures are up 2.2% to just under $100 bbl while Brent crude futures are up 2.6% to just under $104 bbl. President Biden’s trip to Saudi Arabia last week failed to yield any pledge from the kingdom to boost the global oil supply. Gas Prices Fall Further U.S. gas prices fell for the 33rd day in a row today. AAA shows the national average for regular gas fell more than 1 cent overnight to $4.521/gal. The national average for diesel also fell about 1 cent overnight to $5.535/gal. The continued decline in prices comes amid lower demand. The Energy Information Administration reported gas demand fell to 8.06 million barrels per day last week while gasoline inventories rose sharply. In Case You Missed It Elon Musk and Twitter (TWTR) are battling over the timeline for a trial. Twitter asked for the trial to be held in mid-September because the original merger agreement said both parties could exit free of charge if it weren’t complete by October 24. But Musk’s lawyers asked for it not to begin until February 2023, claiming a speedy trial would limit discovery and expert analysis. Musk’s team said, “The only relevant date is the outside date for the debt financing, April 25, 2023.” The judge will determine the trial date at a hearing on Tuesday.
Continue Reading -->Coffee With Greta: Higher Prices Boost Retail Sales
DJIA Futures: +188 (+0.6%) SPX Futures: +17 (+0.4%) NASDAQ Futures: +31 (+0.3%) Good morning friends! Futures are higher as traders digest the latest economic data and more big bank earnings. Let’s get right to it! Retail Sales Rise More Than Expected U.S. retail sales rose more than expected in June, as prices for gas and food soared. The Commerce Department reported retail sales rose 1% last month to $680.6 billion. That beat expectations for a 0.9% gain and was 8.4% higher than June 2021. Retail sales excluding autos also rose 1% vs 0.7% expected. The jump does not necessarily reflect an increase in purchases but likely consumers paying higher prices for the same goods. Gas station sales soared 49.1% year-over-year while sales at restaurants and bars jumped 13.4% annually. Short-Term Treasury Yields Rise, Yield Curve Remains Inverted The key 2-year and 10-year Treasury yield curve is still inverted as short-term yields pop higher this morning. The 2-year yield is up 2 basis points to 3.14% while the 10-year yield is down 4 basis points to 2.93%. Traders and investors have been monitoring the yield curve closely after it inverted earlier this month as that inversion is typically a sign of an impending recession. That inversion hit its deepest level since 2000 this week. Traders Pullback Fed Expectations The market is now split on its expectations for the Fed meeting later this month. CME Group’s FedWatch Tool shows 50.1% of traders expect a 0.75% rate hike while 49.9% are leaning toward a 1% hike. Fed Governor Christopher Waller calmed down fears of a larger move on Thursday, saying he’s still planning on a 75 basis point hike but is “open” to a larger move based on the data. The CPI surged to a fresh 41-year high at 9.1% annually in June. But no more inflation data will be released before the Fed meeting. The Central Bank meets July 26-27 and the June PCE Price Index will be released July 29. Wells Fargo Slips On Revenue Miss Wells Fargo (WFC) shares are down 0.7% ahead of the open after mixed Q2 results. The consumer bank reported adjusted earnings of $0.82 per share, better than analysts’ expectations for $0.80. But the bank’s $17.03 billion in revenue fell short of estimates for $17.53 billion. Profits declined 48% year-over-year as Wells Fargo set aside more funds for bad loans. The bank also said “market conditions” forced it to post a $576 million second-quarter impairment on equity securities tied to its venture capital business. Citigroup Rises On Earnings Beat Citigroup (C) shares are up 4.5% in premarket trade after beating Q2 expectations. The investment bank reported earnings of $2.19 on $19.64 billion in revenue. That beat analysts’ expectations for EPS of $1.68 on $18.22 billion in revenue. Citi benefits from higher interest rates and strong trading results. The CEO said, “In a challenging macro and geopolitical environment, our team delivered solid results and we are in a strong position to weather uncertain times, given our liquidity, credit quality and reserve levels.” Pinterest Soars As Activist Investor Takes Stake Pinterest (PINS) shares are surging 12.9% ahead of the open after the Wall Street Journal reported Elliott Management acquired a stake in the company. The activist investment group is now the largest shareholder in Pinterest, with a more than 9% stake. Sources say the two had been in discussions over the past several weeks. Elliott has a history of taking on struggling tech companies. Oil Prices Rise Oil prices are higher today on optimism the Fed will stick with a 75 basis point hike later this month. West Texas Intermediate crude futures are up 1.4% to $97 bbl while Brent crude futures are up 1.6% to $100 bbl. Uncertainty about the Fed pushed both contracts to the lowest close since February 23 on Thursday. Demand concerns have also weighed on the market amid uncertainty about new Covid restrictions in China. Gas Prices Fall Further U.S. gas prices fell for the 30th day in a row today. AAA shows the national average for regular gas fell nearly 3 cents again overnight to $4.577/gal. The national average for diesel also fell 2 cents to $5.572/gal.
Continue Reading -->Kira Turner Talks Trading, Rodeo, Skydiving, and Life
Check out Inner Circle Moderator Kira Turner’s appearance on the SafeDayTrading Podcast: Kira shares: How her unconventional background helped build her trading philosophy What rodeo, skydiving, and scuba diving taught her about risk Why trading was so different in the 90’s Why she likes shorting The reason she came back to the markets after a Real Estate career And more!
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