Are We Due For A Pullback?
Sami explains why he’s still bullish but explains the setup he sees for a possible market pullback. The buy setup he sees in Bitcoin Why ARKK appears to have bottomed The penny stock he really likes this week The 123 short setups he sees in DXC The hourly based breakdown in HAYW
Continue Reading -->5 Big Tech Names You Need to Watch
We have mixed markets around the world with an upbeat feel. Europe has green arrows and Asia is a bit muted. Last Friday, the markets took the hot jobs report in stride as SPX held 4107. Lots of sectors acted well to extend the active sequence intact from the June lows. We have the CPI on Wednesday. Stay nimble, take trades, and try not to get caught up in opinions. You need to avoid revenge trading and pain trades. 4167 is last week’s high. I don’t think we’ll hit new highs this year, but 4220 can happen in the weeks ahead. We’ll go day-by-day to measure the action. Now let’s go through 5 big names we should all be watching: TSLA went from $760 to $940 the past few weeks. Many traders got stopped out as it broke $915 to see a low of $856. We’ll see if the early strength holds today. I’d approach it slowly. AAPL led the move off the June lows to see a high of $166.59. It held in pretty well Friday, giving us the $163 area to trade against. I wouldn’t chase this open, that but that doesn’t mean it’s an easy short. MSFT was a great trade from $260 to $283+. I sold mine. It acted fine Friday and some bought the dip. Today it’s above $283.80. I’d trim into strength and buy dips. GOOGL lags a bit but I bought some calls early last week and some stock in case it wants to play catchup. It needs to hold $116. A strong move on volume above $118.78 and $119.69 will open the door for higher prices. META held $154-$155 and got out of the danger zone as it cleared $165 to see $172.50+. I put on a call spread for this Friday. We’ll see if it tries to play catch-up. It needs to clear $172 with power for that. Scott’s Positions Disclosure:
Continue Reading -->Coffee With Greta: Focus Turns To Inflation
DJIA Futures: +159 (+0.5%) SPX Futures: +25 (+0.6%) NASDAQ Futures: +99 (+0.7%) Good morning friends! Futures are rising as traders turn their focus to inflation and continue to digest earnings. Let’s get right to it! Focus Turns to Inflation The focus for traders this week is the July CPI report which will be released on Wednesday. That’s expected to show headline inflation slowed to 8.7% annually last month as gas prices cooled from the record-highs in June. But the core CPI is expected to increase to 6.1% from 5.9%. The data comes after the July jobs report crushed expectations last week. The inflation data this week will give the market more clarity on the Fed’s next rate hike. CME Group’s FedWatch Tool shows 68.5% of traders now expect another 0.75% rate hike at the September meeting. Tyson Reports Mixed Fiscal Q3 Results As Meat Prices Soar Tyson Foods (TSN) shares are falling 4.9% ahead of the open after reporting mixed fiscal Q3 results. The meat producer reported adjusted earnings of $1.94 per share on $13.5 billion in revenue. That missed analysts’ expectations for adjusted EPS of $1.97 but beat estimates for $13.31 billion in revenue. That profit miss came as demand fell for many of its products due to higher prices. Total sales volume fell 1.9% while prices rose 8.1% on average. Chicken volume fell 2.1% but sales increased 25.6% due to higher prices. Beef volume increased 1.3% and sales rose 1%. The company said the USDA has indicated domestic production of meat in fiscal 2022 should see flat annual growth compared to last year. Palantir Plunges On Surprise Q2 Loss Palantir (PLTR) shares are plunging 14.8% in premarket trade after reporting a surprise profit loss in the second quarter. The data analytics company reported a loss of $0.01 per share on $473 million in revenue. That missed analysts’ expectations for earnings of $0.03 per share but beat estimates for $471.3 million in revenue. Overall revenue rose 26% year-over-year with commercial revenue jumping 46%. Palantir said its commercial customer count increased 250% annually, growing from 34 customers to 119. The CFO blamed the profit miss on a decline in investments and marketable securities. But he said commercial growth is widespread. Palantir forecast Q3 revenue between $474 million and $475 million and full-year sales between $1.9 billion and $1.902 billion. Signify Health Surges On Possible CVS Takeover Signify Health (SGFY) shares are surging 17.2% ahead of the open amid reports CVS (CVS) is planning a takeover bid of the company. The Wall Street Journal first reported CVS is seeking to make a bid this week. The pharmacy chain said in its earnings last week it is looking to expand in home-health services. And Signify Health previously said it is exploring strategic alternatives, including a sale. Initial bids are due this week and CVS is expected to face competition. CVS shares are up 0.6% in premarket trade. Pfizer to Purchase Global Blood Therapeutics Global Blood Therapeutics (GBT) shares are up 4.7% ahead of the open after agreeing to be acquired by Pfizer (PFE). Pfizer will pay $68.50 per share for Global Blood. The deal is valued at about $5.4 billion, including assumed debt. GBT shares soared last week as original reports emerged the two companies were in talks for an acquisition. PFE shares are flat in premarket trade. Oil Prices Slide On Recession Fears Oil prices are sliding as demand concerns rise on fresh recession fears. West Texas Intermediate crude futures are down 1.1% at $88 bbl while Brent crude futures are down 1% at $94 bbl. New data also showed China imported just 8.79 million barrels of crude per day in July. That was up from the four-year low in June but still 9.5% lower than July 2021. In Case You Missed It Tesla (TSLA) shares are rising 2.2% after shareholders approved a 3-for-1 stock split last week. Each stockholder of record on August 17 will receive a dividend of 2 new shares for every one they own after the close on August 24. The stock will then begin trading on a split-adjusted basis on August 25. The Senate narrowly passed Democrats’ “Inflation Reduction Act” over the weekend. The legislation was approved in a 51-50 vote along party lines on Sunday, with the Vice President casting the tie-breaking vote. The bill is now headed to the House which plans to return from summer recess on Friday to approve it. The bulk of spending in the bill is focused on addressing climate change. It also addresses prescription drug pricing, puts a cap on insulin prices, includes a new 15% minimum tax on large corporations, and creates a new 1% excise tax on stock buybacks.
Continue Reading -->Coffee With Greta: Stocks Drop On HOT July Jobs Report
DJIA Futures: -189 (-0.6%) SPX Futures: -37 (-0.9%) NASDAQ Futures: -151 (-1.1%) Good morning friends! Futures are falling as a strong July jobs report gives the Fed more room to stay aggressive on inflation. Let’s get right to it! July Job Growth Crushes Expectations The Labor Department reported today that the U.S. economy added 528,000 jobs in July. That crushed economists’ expectations for a gain of 258,000. The unemployment rate slipped to 3.5% vs 3.6% expected. And wage gains also continued with average hourly earnings up 0.5% monthly and 5.2% year-over-year. The Fed has been focused on those wage gains as they add fuel to already red hot inflation. The data shows the labor market maintaining strength, giving the Fed more room to continue aggressive rate hikes to fight inflation. But there are still more jobs to be recovered from before the pandemic as the labor force participation rate slipped to 62.1% from 62.2%. That’s still down from 63.4% in February 2020. The report also included upward revisions for May and June. May’s job growth was revised higher by 2,000 to show 386,000 jobs added while June was revised higher by 26,000 to show 372,000 jobs added. DoorDash Reports Record Number of Orders DoorDash (DASH) shares are up 5.4% ahead of the open after mixed Q2 results. The food delivery service reported a loss of $0.72 per share on $1.61 billion in revenue. That was steeper than analysts’ expectations for a loss of $0.41 per share but beat revenue estimates for $1.52 billion. DoorDash said it delivered 426 million orders last quarter, up 23% year-over-year and a record-high. The company did warn it expects a “softer consumer spending environment” in the second half of the year. Because of uncertainty about how quickly consumer activity will shift, DoorDash forecast adjusted EBITDA to fall between $25 million and $75 million in Q3. Lyft Rallies on Earnings Beat Lyft (LYFT) shares are rising 5.8% in premarket trade after its strongest quarterly results since before the pandemic. The ride-hailing company reported adjusted earnings of $0.13 per share on $990.7 million in revenue. That topped analysts’ expectations for a loss of $0.04 per share on $989 million in revenue. Lyft said it had 19.86 million riders in Q2, up by more than 2 million year-over-year and in line with estimates. Revenue per ride came in at $49.89, above analysts’ estimates for $49.30. The co-founder and president said, “We feel great about what we did this quarter. We generated our highest adjusted Ebitda, added more than 2 million riders, and saw a recovery in the driver side.” Lyft forecast Q3 revenue between $1.04 billion and $1.06 billion, just shy of analysts’ expectations for $1.1 billion. The company expects adjusted EBITDA of $55 million to $65 million vs $61 million expected by analysts. AMC Revenue Surges, Company Announces New APE Shares AMC (AMC) shares are dropping 9.5% ahead of the open despite beating Q2 expectations. The theater chain reported an adjusted loss of $0.20 per share on $1.17 billion in revenue. That was better than analysts’ expectations for a loss of $0.23 per share and in line with revenue estimates. CEO Adam Aron said movies like “Top Gun: Maverick” and Jurassic World: Dominion” drove sales during the quarter. Global attendance surged 168%. AMC also announced it will issue a dividend to all shareholders in the form of preferred shares. The company applied to list those preferred shares under the ticker symbol APE. Aron said, “Today we are rewarding and recognizing our passionate and supportive shareholders, both to our shareholders in the U.S. and internationally. Shareholders will receive one AMC Preferred Equity unit for each company-issued share of AMC common stock that they own.” AMC expects to issue a dividend of about 517 million APE units later this month and the shares will start trading on August 22. The CEO said, “Given the flexibility that APEs will give us, we likely will be able to raise money if we need or so choose, which immensely lessens any survival risk as we continue to work our way through this pandemic to recovery and transformation.” Beyond Meat Cuts Outlook, Announces Job Cuts Beyond Meat (BYND) shares are falling 4.1% in premarket trade after missing Q2 expectations and lowering its full-year forecast. The alternative meat company reported a loss of $1.53 per share on $147 million in revenue. That was worse than analysts’ expectations for a loss of $1.18 per share on $149.2 million in revenue. Beyond forecast full-year revenue between $470 million and $520 million, down from its prior forecast of $560 million to $620 million. The company cited inflation, rising interest rates, and recession concerns for that downgrade. Beyond also announced it will lay off about 4% of its global workforce. Amazon to Acquire iRobot iRobot (IRBT) shares are surging 19.1% ahead of the open after Amazon (AMZN) announced plans to acquire the robot vacuum maker. Amazon will acquire iRobot for $61 per share. The all-cash deal values the company at $1.7 billion. The hardware devices chief at Amazon said, “Customers love iRobot products — and I’m excited to work with the iRobot team to invent in ways that make customers’ lives easier and more enjoyable.” The current iRobot CEO will continue to run the company after the deal closes. Oil Prices Flat Oil prices are flat but on track for weekly losses as demand concerns weigh on the market. West Texas Intermediate crude futures are up 0.1% to over $88 bbl while Brent crude futures are up 0.1% to over $94 bbl. The market has been in a volatile back and forth over supply worries and demand concerns. But the demand worries seemed to win this week after the EIA reported another drop in U.S. gasoline demand. In Case You Missed It Coinbase (COIN) shares rallied 10% on Thursday after the crypto exchange announced a partnership with BlackRock (BLK) that will allow its institutional clients to buy bitcoin. Coinbase will provide crypto trading, custody, prime brokerage, and
Continue Reading -->Coffee With Greta: Lucid Slashes Production Goals Again
DJIA Futures: +18 (+0.1%) SPX Futures: +6 (+0.1%) NASDAQ Futures: +31 (+0.2%) Good morning friends! Futures are flat as traders digest fresh jobs data and earnings results. Let’s get right to it! Lucid Plunges After Cutting Production Target Lucid (LCID) shares are down 12.7% ahead of the open after missing Q2 sales expectations and slashing its 2022 production target. The electric automaker reported a loss of $0.33 per share on $97.3 million in revenue. That was better than analysts’ expectations for a loss of $0.39 per share but missed estimates for $145 million in revenue. Lucid delivered just 679 cars in Q2. Although the company said it has over 37,000 reservations for its Air sedan it still cut its full-year delivery guidance. Lucid now expects to deliver just 6,000 to 7,000 vehicles this year. The CEO said, “Our revised production guidance reflects the extraordinary supply chain and logistics challenges we encountered. We’ve identified the primary bottlenecks, and we are taking appropriate measures – bringing our logistics operations in-house, adding key hires to the executive team, and restructuring our logistics and manufacturing organization.” The company hired a former Stellantis (STLA) executive to serve as its senior vice president of operations. He will run Lucid’s manufacturing, logistics, and quality-control efforts. WeWork Slips On Weak Q2 Results WeWork (WE) shares are down 2.3% in premarket trade after reporting a wider loss than expected in Q2. The flexible workplace provider reported a loss of $0.76 per share on $815 million in revenue. That was worse than analysts’ expectations for a loss of $0.58 per share on $824.3 million in revenue. But WeWork’s adjusted EBITDA was negative $134 million, which was better than analysts’ estimates for negative $158.2 million. The company confirmed its full-year outlook. Alibaba Jumps on Earnings Beat Alibaba (BABA) shares are up 5.2% ahead of the open after beating fiscal Q1 expectations. The Chinese online retailer reporting earnings of $0.22 per share on $30.7 billion in revenue. That was better than analysts’ expectations for EPS of $0.20 on $30.3 billion in revenue. Revenue was flat year-over-year and dropped 1% in the Chinese commerce segment. That’s a sharp slowdown from the same time last year when revenue grew 34% annually. Alibaba did not provide forward guidance. Walmart Begins Corporate Layoffs Walmart (WMT) shares are flat in premarket trade after beginning corporate layoffs. The retailer confirmed it started those layoffs on Wednesday. Walmart said the cuts are an effort to “better position the company for a strong future.” The layoffs come after the company slashed its profit outlook just last week. A Walmart spokesperson said, “Shoppers are changing. Customers are changing. We are doing some restructuring to make sure we’re aligned.” It’s unclear how many employees will be cut and which divisions will be impacted. Weekly Jobless Claims Rise Weekly jobless claims rose again last week as the labor market remains tight. The Labor Department reported 260,000 Americans filed initial claims for unemployment benefits last week. That was up by 6,000 from the week before and in-line with economists’ expectations. Continuing claims also rose by 50,000 to 1.42 million in the week ending July 23. This data comes ahead of the July jobs report on Friday. That’s expected to show the U.S. economy added 258,000 jobs last month with the unemployment rate unchanged at 3.6%. Trade Deficit Narrows in June The U.S. trade deficit shrank more than expected in June. The Commerce Department reported that gap fell to $79.6 billion. That’s down 6.2% from May and lower than expectations for $80 billion. Exports rose 1.7% to $260.8 billion while imports fell 0.3% to $340.4 billion. Oil Prices Slip On Falling U.S. Fuel Demand Oil prices are slipping on concerns over low fuel demand in the U.S. West Texas Intermediate crude futures are down 0.2% to over $90 bbl while Brent crude futures are down 0.6% to over $96 bbl. The Energy Information Administration reported a drop in U.S. gasoline demand Wednesday. That demand fell to 8.59 barrels per day last week from 8.81 million barrels the week before. That was down sharply from 9.42 million barrels per day a year ago. The EIA report showed U.S. crude inventories rose by 4.5 million barrels last week. That sharply beat analysts’ expectations for a 1.7 million barrel increase. Gasoline stockpiles rose by 200,000 barrels vs expectations for a 1.5 million barrel drop. In Case You Missed It Ford (F) shares jumped 3.5% on Wednesday after the automaker reported strong July sales. The company sold 163,942 new vehicles last month, up 36.6% year-over-year and 7.7% from June. F-series pickup truck sales rose 21.1% annually and 10% monthly to 63,341. Electric vehicle sales surged 169% year-over-year to 7,700. Ford said it share of the EV market in the U.S. jumped to 10.9% in July.
Continue Reading -->Coffee With Greta: $HOODwinked! Robinhood Cuts More Jobs
DJIA Futures: +176 (+0.5%) SPX Futures: +25 (+0.6%) NASDAQ Futures: +84 (+0.7%) Good morning friends! Futures are higher as Wall Street looks to bounce back from back-to-back losing sessions. Let’s get right to it! Robinhood Announces More Lay Offs Robinhood (HOOD) shares are up 1% ahead of the open despite the company announcing new layoffs and mixed Q2 results. CEO Vlad Tenev announced the job cuts in a blog post on Tuesday. He said Robinhood is reducing its headcount by 23%. Those cuts will mostly impact operations, marketing, and program management positions. This is the second round of layoffs this year after the company cut 9% of its workforce in April. Tenev said since then, Robinhood has seen “additional deterioration of the macro environment, with inflation at 40-year highs accompanied by a broad crypto market crash. This has further reduced customer trading activity and assets under custody.” Impacted employees were notified immediately and will be able to stay on until October 1. Robinhood also reported mixed Q2 earnings on Tuesday. The company lost $0.34 per share on $318 million in revenue vs analysts’ expectations for a loss of $0.37 per share on $321 million in revenue. PayPal Rallies On Solid Q2 Results PayPal (PYPL) shares are rallying 13.5% in premarket trade after beating Q2 expectations. The digital payments platform reported adjusted earnings of $0.93 per share on $6.81 billion in revenue. That topped analysts’ expectations for adjusted EPS of $0.86 on $6.79 billion in revenue. PayPal had 429 million active accounts at the end of Q2, up 6% year-over-year but lower than analysts’ estimates for 432.8 million. Activist investment group Elliott Management, which owns a $2 billion stake in PayPal, said the company “has an unmatched and industry-leading footprint across its payments businesses and a right to win over the near- and long term.” PayPal also announced a new $15 billion share buyback program and said it has a “commitment to work with Elliott Investment Management L.P. on a comprehensive evaluation of capital return alternatives.” The company hiked its full-year forecast, expecting adjusted EPS between $3.87 and $3.97. That was better than analysts’ expectations for $3.82. AMD Slips On Weak Forecast Advanced Micro Devices (AMD) shares are down 4.3% ahead of the open despite beating Q2 expectations. The chipmaker reported adjusted earnings of $1.05 per share on $6.55 billion in revenue. That beat analysts’ expectations for adjusted EPS of $1.03 on $6.53 billion in revenue. Overall revenue rose 70% year-over-year. But AMD’s Q3 forecast came in short of estimates. The company expects $6.7 billion in revenue this quarter vs analysts’ expectations for $6.83 billion. Starbucks Rises On Q2 Earnings Beat Starbucks (SBUX) shares are up 1.7% in premarket trade after topping Q2 expectations. The coffee chain reported adjusted earnings of $0.84 per share on $8.15 billion in revenue. That was better than analysts’ estimates for adjusted EPS of $0.75 on $8.11 billion in revenue. Starbucks said inflation and higher wages weighed on its margins in Q2. Same-store sales in the U.S. rose 9% as higher prices pushed order totals higher. But sales outside the U.S. were down 18% as sales in China tumbled 44% due to renewed Covid lockdowns. The company declined to provide a full-year forecast citing uncertainty about those restrictions in China. Airbnb Slumps Despite Strong Q2 Airbnb (ABNB) shares are falling 6.8% ahead of the open despite reporting record profits in Q2. The vacation rental site reported earnings of $0.56 per share on $2.10 billion in revenue. That beat analysts’ expectations for EPS of $0.43 and was in line with revenue estimates. Revenue jumped 58% compared to Q2 2021, but that was down from the 70% annual growth in the first quarter. Airbnb said customers booked 103.7 million nights and experiences last quarter, a record high and up 24% compared to 2019. But that was shy of analysts’ expectations for 106.2 million nights and experiences booked. Airbnb also announced a $2 billion share buyback program. The CEO said, “Our Q2 results demonstrate that Airbnb has achieved growth and profitability at scale.” The company forecast record Q3 revenue between $2.78 billion and $2.88 billion, topping analysts’ estimates for $2.77 billion. CVS Beats Q2 Expectations, Hikes Guidance CVS (CVS) shares are up 4.1% in premarket trade after beating Q2 expectations and hiking its full-year forecast. The drugstore chain reported adjusted earnings of $2.40 per share on $80.64 billion in revenue. That topped analysts’ estimates for adjusted EPS of $2.17 on $76.37 billion in revenue. The CEO said, “Despite a challenging economic environment, our differentiated business model helped drive strong results this quarter, with significant revenue growth across all of our business segments.” Same-store sales rose 8% year-over-year. CVS administered more than 4 million Covid tests and 6 million vaccines in Q2, down from 6 million and 8 million in Q1. The company now expects full-year adjusted EPS between $8.40 and $8.60 vs its previous estimate between $8.20 and $8.40. Moderna Rises On Earnings Beat Moderna (MRNA) shares are up 4.5% ahead of the open after beating Q2 expectations on the top and bottom line. The biotech company reported adjusted earnings of $5.24 per share on $4.7 billion in revenue. That was better than expectations for adjusted EPS of $4.55 on $4.1 billion in revenue. $4.5 billion of that total revenue was Covid vaccine sales. Moderna said it took a nearly $500 million hit from expiring vaccinations. The company maintained its full-year forecast for $21 billion in Covid vaccine sales. Moderna also announced a $3 billion share buyback program. Nikola Wins Shareholder Approval To Issue More Stock Nikola (NKLA) shares are up 3.8% in premarket trade after shareholders voted in favor of the company’s plan to issue more stock. The CEO announced the measure had passed in a webcast on Tuesday. He did not reveal the margin of the vote but it required approval from owners of at least 50% of the company’s outstanding shares. Ex-CEO and founder Trevor Milton, who holds a 20% stake in the company, previously
Continue Reading -->Coffee With Greta: Stocks Drop As Tensions Ramp Up With China
DJIA Futures: -181 (-0.6%) SPX Futures: -29 (-0.7%) NASDAQ Futures: -123 (-1%) Good morning friends! Futures are slipping as tensions rise between the U.S. and China. Let’s get right to it! China Tensions Boil Ahead of Pelosi’s Taiwan Trip Tensions are rising between the U.S. and China as House Speaker Nancy Pelosi is expected to visit Taiwan. Reuters reported Pelosi will travel to Taiwan today and stay overnight. Chinese officials reportedly threatened to take action if she went through with the trip. The Chinese foreign ministry spokesman said, “We would like to tell the United States once again that China is standing by, the Chinese People’s Liberation Army will never sit idly by, and China will take resolute responses and strong countermeasures to defend its sovereignty and territorial integrity.” Pelosi would be the first House Speaker to visit Taiwan since Newt Gingrich in 1977. Pinterest Pops On Strong User Numbers Pinterest (PINS) shares are surging 18.8% ahead of the open after reporting better than expected Q2 user numbers. The social media site reported adjusted earnings of $0.11 per share on $666 million in revenue. That missed analysts’ expectations for adjusted EPS of $0.18 on $667 million in revenue. Pinterest’s global monthly active users fell 5% year over year to 433 million. That beat analysts’ estimates for a decline to 431 million. The company attributed the financial miss to the weakening advertising market. Pinterest’s outlook was also weak. The company said it expects Q3 revenue growth in the mid-single digits” annually vs analysts’ expectations for 12.7% growth. The company said, “The macroeconomic environment has created meaningful uncertainty for our advertiser partners.” Separately, activist investment group Elliott Management confirmed it is Pinterest’s largest shareholder and expressed confidence in the business. The group said, “As the market-leading platform at the intersection of social media, search and commerce, Pinterest occupies a unique position in the advertising and shopping ecosystems, and CEO Bill Ready is the right leader to oversee Pinterest’s next phase of growth.” Uber Jumps On Revenue Beat Uber (UBER) shares are rallying 13.8% in premarket trade after reporting mixed Q2 results. The ride-share giant reported a loss of $1.33 per share on $8.07 billion in revenue. That was worse than analysts’ expectations for a loss of $0.27 per share but topped estimates for $7.4 billion in revenue. The quarter included a $1.7 billion headwind due to equity investments. Uber had $382 million in free cash flow during the quarter, becoming cash flow positive for the first time ever. The CFO said, “We became a free cash flow generator in Q2, as we continued to scale our asset-light platform, and we will continue to build on that momentum.” Uber forecast Q3 adjusted EBITDA between $440 million and $470 million, crushing analysts’ estimates for $383.2 million. JetBlue Slips As Costs Surge JetBlue (JBLU) shares are falling 4.1% ahead of the open after missing Q2 expectations as costs surged. The airline reported an adjusted loss of $0.47 per share on $2.44 billion in revenue. That was worse than analysts’ estimates for an adjusted loss of $0.11 on $2.45 billion in revenue. That miss came as cost per available seat mile surged nearly 35% compared to 2019. JetBlue forecast it will return to profitability in the third quarter but capacity will still be 3% lower than Q3 2019. The CEO said, “We reported a record-breaking revenue result for the second quarter, and we’re on pace to top it again here in the third quarter and drive our first quarterly profit since the start of the pandemic.” The company forecast cost per available seat mile, excluding fuel, will rise 15% to 17% in the current quarter. Avis Budget Crushes Q2 Expectations Avis Budget (CAR) shares are up 4.6% in premarket trade after sharply beating Q2 expectations. The rental car company reported adjusted earnings of $15.94 per share on $3.24 billion in revenue. That smashed analysts’ expectations for adjusted EPS of $11.48 on $3.17 billion in revenue. Profits surged more than 170% year over year, while revenue jumped 36.7% annually. Avis executives said it was a record-breaking quarter for revenue. The CEO said those results were driven by “enhanced revenue generation, diligent fleet management, and stringent cost control.” Oil Prices Flat Oil prices are flat today as the back and forth between demand concerns and supply worries continues. West Texas Intermediate crude futures are up 0.7% to $94.50 bbl while Brent crude futures are up 0.5% to $100.50 bbl. Concern over lower demand mounted on Monday after new data showed a manufacturing downturn across the U.S., Europe, and Asia. But Wednesday’s OPEC+ meeting is still in focus as the group is set to decide on September output levels. The American Petroleum Institute releases its data on U.S. crude and gasoline inventories later today. Gas Prices Are Still Falling U.S. gas prices fell for the 47th day in a row today. AAA shows the national average for regular gas fell to $4.189/gal. The national average for diesel is down to $5.257/gal. Coming Up: JOLTS The Labor Department releases its June Job Openings and Labor Turnover Survey (JOLTS) at 10:00 a.m. ET. That survey is expected to show there were 11 million job openings in June. Although that would be a decline from 11.3 million in May, it would still show a major labor gap in the U.S. economy. There were 5.9 million unemployed workers in June. In Case You Missed It The Commerce Department reported Monday that construction spending tumbled 1.1% in June, sharply missing expectations for a 0.4% gain. Spending on private residential construction projects fell 1.6% while residential public construction spending rose 0.5%. Private nonresidential spending and public nonresidential spending both fell 0.5%.
Continue Reading -->Market Bias Turns Bullish
Sami explains how the market bias has turned bullish and what he is looking for to be all out bullish himself: His long strategy after the market bottom The 123 setup in CCI Why GSAT is primed for a breakout Why he likes real estate stocks like ABR short The 123 bearish continuation play in CINF and CYH
Continue Reading -->Coffee With Greta: Stocks Slip After Best Month In 2 Years
DJIA Futures: -86 (-0.3%) SPX Futures: -17 (-0.4%) NASDAQ Futures: -38 (-0.3%) Good morning friends! Futures are falling as traders begin a new month of trade. Let’s get right to it! Fed Is Laser Focused on Inflation Amid Recession Debate Minneapolis Fed President Neel Kashkari says inflation poses a larger risk to the economy than a potential recession. He told CNBC over the weekend, “I’m focused on the inflation data. I’m focused on the wage data. And so far, inflation continues to surprise us to the upside. Wages continue to grow.” Kashkari seemed to downplay fears that the U.S. economy is already in a recession, touting the strength of the labor market. He said, “Typically, recessions demonstrate high job losses, high unemployment, those are terrible for American families. And we’re not seeing anything like that.” But he said even though Americans are still employed, they’re receiving a function “wage cut” because inflation is still outpacing wage gains. Kashkari said, “We are a long way away from achieving an economy that is back at 2% inflation. And that’s where we need to get to.” The Fed meets again in September. Treasury Yields Rise As Traders Weigh Recession Prospects Treasury yields are rising on the first day of August as debate continues over whether the U.S. is in a recession. The key 2-year/10-year curve remains inverted. The 2-year yield is up 2 basis points to 2.90% while the 10-year yield is up 3 basis points to 2.68%. July was the strongest month since 2020 for stocks as mostly positive corporate earnings provided some relief. The big piece of data for the market this week will be Friday’s jobs report. Economists expect that to show the U.S. added 250,000 jobs in July. Romeo Power Surges On Nikola Acquisition Romeo Power (RMO) shares are surging 20% ahead of the open after Nikola (NKLA) announced a $144 million deal to acquire the battery pack supplier. Nikola will buy Romeo in an all-stock transaction at $0.74 per share, a 34% premium to Friday’s closing price. Nikola will provide $35 million in interim funding to Romeo to continue its operations until the deal closes. The electric truck maker has been Romeo’s largest customer and Nikola’s CEO said, “Given our strong relationship with Romeo and ongoing collaboration, we are confident in our ability to successfully integrate and deliver the many expected strategic and financial benefits of this acquisition.” Oil Prices Drop After Weak Chinese Factory Data Oil prices are falling today as demand concerns jump following the release of weak factory data from China and Japan. West Texas Intermediate crude futures are down 2.3% to $96 bbl while Brent crude futures are down 1.7% to $102 bbl. China’s manufacturing PMI fell to 50.4 in July from 51.4 in June as fresh Covid lockdowns dampened activity. Manufacturing activity in Japan also expanded at the slowest pace in 10 months. The market is also looking ahead to this week’s OPEC+ meeting. The group meets Wednesday to decide on output levels for September. Most analysts expect the group to keep output levels steady. Gas Prices Are Still Falling U.S. gas prices fell for the 46th day in a row today. AAA shows the national average for regular gas fell to $4.212/gal. That price is down more than $0.80 from the record-high in June but still $1.039 higher than a year ago. The national average for diesel is down to $5.279/gal. Diesel has fallen $0.537 from its record-high but is still $1.995 higher than the same time last year.
Continue Reading -->Coffee With Greta: Fed’s Fave Inflation Gauge Jumps
DJIA Futures: +14 (+0.04%) SPX Futures: +17 (+0.4%) NASDAQ Futures: +85 (+0.7%) Good morning friends! Futures are mostly higher as the market digests fresh inflation data and strong big tech earnings. Let’s get right to it! PCE Inflation Pushes Higher Inflation pressures in the U.S. economy pushed higher in June. The Bureau of Economic Analysis’ Personal Consumption Expenditures (PCE) price index jumped 1% monthly and surged 6.8% year over year. That was higher than expectations for a 0.9% monthly gain and an increase from the 6.3% annual pace in May. That’s the highest headline reading since January 1982. The core PCE price index – which is the Fed’s preferred inflation gauge – rose 0.6% monthly and 4.8% annually. That was higher than economists’ expectations for 0.5% monthly and up from 4.7% annually in May. The data shows high inflation pressures persisting even as the Fed has begun aggressive rate hikes. Apple Tops Fiscal Q3 Expectations Apple (AAPL) shares are up 2.8% ahead of the open after beating fiscal Q3 expectations on the top and bottom line. The iPhone maker reported earnings of $1.20 per share on $83 billion in revenue. That was better than analysts’ expectations for EPS of $1.16 on $82.81 billion in revenue. iPhone revenue rose 3% annually to $40.67 billion vs $38.33 billion estimated. Apple declined to provide fiscal Q4 guidance but CEO Tim Cook told CNBC, “we expect revenue to accelerate in the September quarter despite seeing some pockets of softness.” Amazon Surges On Strong Q2 Sales Amazon (AMZN) shares are surging 10.5% in premarket trade after better-than-expected Q2 results. The online retail giant reported a loss of $0.20 per share on $121.23 billion in revenue, up 7% year-over-year. That was better than analysts’ expectations for $119.3 billion in sales. The profit loss included a $3.9 billion non-operating expense related to Amazon’s stake in Rivian (RIVN). CEO Andy Jassy said, “Despite continued inflationary pressures in fuel, energy, and transportation costs, we’re making progress on the more controllable costs we referenced last quarter, particularly improving the productivity of our fulfillment network.” Amazon Web Services revenue rose 33% to $19.7 billion, in line with expectations. Online sales fell 4% to $50.9 billion while physical store sales rose 12% to $4.7 billion. Amazon projected Q3 sales between $125 billion and $130 billion vs analysts’ estimates for $126.7 billion. Roku Craters After Weak Q2 Roku (ROKU) shares are plummeting 22.8% ahead of the open after weak Q2 results. The streaming giant reported a loss of $0.82 per share on $764 million in revenue. That was worse than analysts’ expectations for a loss of $0.69 per share on $805 million in revenue. Roku blamed that weak performance on inflation and supply chain issues. The company warned of a continued slowdown in the advertising market due to “an economic environment defined by recessionary fears.” Roku said, “We believe this pullback mirrors the start of the pandemic in 2020, when marketers prepared for macro uncertainties by quickly reducing ad spend across all platforms.” The company withdrew its full-year growth estimate citing market volatility. Intel Sinks After Q2 Earnings Miss, Weak Guidance Intel (INTC) shares are sinking 11% in premarket trade after missing Q2 expectations on the top and bottom line. The chipmaker reported adjusted earnings of $0.29 per share on $15.32 billion in revenue. That missed analysts’ expectations for adjusted EPS of $0.70 on $17.92 billion in revenue. Revenue tumbled 22% year over year. CEO Pat Gelsinger said, “The sudden and rapid decline in economic activity was the largest driver, but the shortfall also reflects our own execution issues.” For the third quarter, Intel forecast adjusted earnings of $0.35 per share on $15 billion to $16 billion in revenue. The company also lowered its full-year forecast. Intel expects full-year adjusted earnings of $2.30 per share and revenue between $65 billion and $68 billion. That was down from prior guidance and lower than analysts’ estimates for $3.42 EPS on $73.34 billion in revenue. Procter & Gamble Slides On Profit Miss, Weak Outlook Procter & Gamble (PG) shares are are falling 3.5% ahead of the open after missing fiscal Q4 profit expectations and releasing weak fiscal 2023 guidance. The consumer goods giant reported adjusted earnings of $1.21 per share on $19.52 billion in revenue. That was shy of analysts’ expectations for EPS of $1.22 but higher than estimates for $19.4 billion in revenue. The CEO said, “As we look forward to fiscal 2023, we expect another year of significant headwinds.” The company expects fiscal 2023 earnings to be flat to up about 4%, which would be around $5.93 per share at the midpoint. Analysts were expecting fiscal 2023 EPS of $6.02. Big Oil Companies Report Record Profits Exxon Mobil (XOM) shares are up 2.2% while Chevron (CVX) shares are up 2.8% after both companies reported record profits in Q2. Exxon reported adjusted earnings of $4.14 per share vs $3.74 per share expected. But revenue fell short at $115.68 billion vs analysts’ estimates for $132.7 billion. Chevron beat expectations on the top and bottom line with adjusted EPS of $5.82 on $68.76 billion in revenue. That was better than analysts’ estimates for EPS of $5.10 on $59.29 billion in revenue. The record-high profits came as oil prices remained high in the quarter and U.S. gas prices hit record highs in June. Oil Prices Climb On Supply Worries Oil prices are climbing higher as focus turns to next week’s OPEC+ meeting and low expectations the group will boost production. West Texas Intermediate crude futures are up about 2% to over $98 bbl while Brent crude futures are up 1.9% to over $109 bbl. But both contracts are still on track for a second straight monthly loss. Gas Prices Continue Pullback U.S. gas prices fell for the 44th day in a row today. AAA shows the national average for regular gas fell nearly 2 cents overnight to $4.255/gal. The national average for diesel also fell more than 2 cents overnight to $5.319/gal. In Case You Missed It
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