Coffee With Greta: April Job Growth Comes In Hot
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: -15 (-0.1%) SPX Futures: -3 (-0.1%) NASDAQ Futures: -13 (-0.1) Good morning friends! Futures are slightly lower after plunging on Thursday, with the Dow and the Nasdaq logging their worst days since 2020. Let’s get right to it! Mixed April Jobs Report April job growth came in hotter than expected but other metrics in the report were weak. The Labor Department reported the U.S. economy added 428,000 jobs last month, beating economists’ expectations for a gain of 400,000. The unemployment rate held steady at 3.6% vs expectations for that to fall to 3.5%. Average hourly earnings rose 0.3% monthly, below expectations for 0.4%. Wages rose 5.5% year over year, lagging far behind inflation. The labor force participation rate fell by 0.2% to 62.2%, tied for the lowest level of the year and still far below pre-pandemic levels. Supply Worries Boost Oil Prices Oil prices are still rising on fresh supply concerns. West Texas Intermediate crude futures are up 1.6% to $110 bbl while Brent crude futures are up 1.8% to $113 bbl. EU sources say the bloc is tweaking its sanctions plan against Russia to get three reluctant countries on board. The sanctions package would phase out all Russian oil imports by the end of this year. Crypto Tumbles The crypto market is extending Thursday’s losses this morning. Bitcoin dropped below $36,000 earlier in the day but is now down about 8% in the past 24 hours at $36,300. Ethereum is down 7.3% at $2,700, XRP is off 4.8% at $0.61, and Dogecoin is down 4.6% at $0.13. Some experts see Bitcoin moving lower in the days ahead, saying it lost a key level when it fell below $37,500. DraftKings Earnings DraftKings (DKNG) shares are up 5.6% ahead of the open after the company hiked its full-year guidance. The online sports betting company reported and adjusted Q1 loss of $0.74 per share on $417 million in revenue. That was better than analysts’ expectations for a loss of $1.09 per share on $412 million in revenue. DraftKings forecast full-year revenue between $1.93 billion and $2.03 billion, up from previous guidance for $1.85 billion to $2 billion. The CEO said, “DraftKings delivered significant growth across our key revenue and performance metrics. We are not seeing any impact from inflationary pressures on customer demand.” DoorDash Orders Hit Record High DoorDash (DASH) shares are up 3.6% in premarket trade after reporting record-high orders in the first quarter. The food delivery service reported a loss of $0.48 per share on revenue of $1.46 billion. That was steeper than analysts’ expectations for a $0.41 per share loss but better than estimates for $1.38 billion in revenue. Revenue rose 35% year-over-year as the total number of orders jumped 24% to 404 million. That’s the first time orders have topped 400 million. DoorDash forecast Q2 adjusted EBITDA of up to $100 million, up from $54 million in Q1. In a letter to investors, the company said it now holds 57% of the food delivery market in the U.S. DoorDash now plans to invest in other categories like grocery, alcohol, and retail deliveries. Sweetgreen Revenue Surges Sweetgreen (SG) shares are up 4.2% ahead of the open after reporting strong Q1 sales. The salad chain reported a loss of $0.45 per share on $102.6 million in revenue. That compared to analysts’ expectations for a $0.41 loss per share on $101.5 million in revenue. Sales jumped 67% year-over-year. Same-store sales rose 35% in Q1 as more customers visited the chain and Sweetgreen raised its prices. Prices were up 10% compared to Q1 2021. Sweetgreen reiterated its 2022 forecast for revenue between $515 million and $535 million and same-store sales growth between 20% to 26%. The company plans to open 35 new locations this year. Virgin Galactic Tumbles After Postponing Commercial Flight Virgin Galactic (SPCE) shares are falling 5.9% in premarket trade after postponing its first commercial space flight. The company reported a loss of $0.36 per share in Q1. Although that was down from the $0.55 per share loss a year ago, it was higher than analysts’ expectations for a $0.32 loss. But Virgin Galactic’s $319,000 in revenue topped estimates for $100,000. The company pushed its first commercial space flight to Q1 2023 citing “escalating supply chain and labor constraints”. Virgin Galactic previously announced plans to have its first 1,000 customers on board flights to space later this year. Block Shakes Off Q1 Earnings Miss Block (SQ) shares are up 5.3% ahead of the open despite missing Q1 expectations. The Square parent company reported adjusted earnings of $0.18 per share on $3.96 billion in revenue. That missed analysts’ expectations for adjusted EPS of $0.20 per share on $4.14 billion in revenue Block generated overall gross profit of $1.29 billion. That was up from $964 million a year ago but shy of analysts’ estimates for $1.3 billion. The market pays closer attention to that number than revenue as the revenue line is swayed by high-cost initiatives like Bitcoin trading. Block brought in $1.73 billion in Bitcoin revenue in Q1 but Bitcoin-related costs totaled $1.69 billion. Gross profit from its Cash App mobile wallet jumped 26% year over year while Square’s gross profit surged 41%. Block’s CFO said they have seen the “platform is resilient” through times of uncertainty like the pandemic and the current inflationary environment. Lucid Beats Q1 Expectations Lucid (LCID) shares are up 0.4% in premarket trade after reporting a narrow than expected Q1 loss. The electric automaker reported a loss of $0.05 per share on $58 million in revenue. That was better than analysts’ expectations for a loss of $0.31 per share on $56 million in revenue. Lucid delivered 360 vehicles in Q1 and said it has more than 30,000 reservations for its flagship Air sedan. The company announced it is raising prices as costs continue to soar. Lucid
Continue Reading -->Coffee With Greta: Fed Shrugs Off Recession Fears
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: -157 (-0.5%) SPX Futures: -25 (-0.6%) NASDAQ Futures: -97 (-0.7%) Good morning friends! Futures are lower, giving up Wednesday’s relief rally prompted by the Fed decision. Let’s get right to it! Largest Rate Hike in 22 Years The Federal Reserve approved its largest rate hike in more than two decades Wednesday. The Federal Open Market Committee voted, as expected, to raise the federal funds rate by 0.5% to a range of 0.75% to 1.00%. That’s the largest increase since 2000. The FOMC also voted to begin the balance sheet reduction in June. Starting June 1, $30 billion in Treasury securities and $17.5 billion in mortgage-backed securities will be rolled off per month. That pace will increase to $60 billion in Treasury securities and $35 billion in mortgage-back securities after three months. In his news conference after the meeting concluded, Fed Chair Jerome Powell said “Inflation is much too high and we understand the hardship it is causing. We’re moving expeditiously to bring it back down”. Powell said more 0.5% rate hikes are on the table for the future but shut down the market’s expectation for larger hikes. He said “75-basis points is not something the committee is actively considering”. Powell said the Fed believes “the American economy is very strong and well-positioned to handle tighter monetary policy” and they will be able to achieve a “soft or softish” landing. Weekly Jobless Claims Rise More Than Expected Weekly jobless claims rose more than expected as the labor market remains tight. The Labor Department reported 200,000 Americans filed initial claims for unemployment benefits last week. That was an increase of 19,000 from the previous week and higher than economists’ expectations for 182,000. Continuing jobless claims fell by 24,000 to 1.384 million in the week ending April 23. Labor Productivity Plunges, Costs Surge U.S. worker productivity tumbled 7.5% in the first quarter, marking the fastest decline since 1947. Productivity is a measure of worker output against number of hours worked. While productivity dropped sharply, labor costs soared 11.6% last quarter. That brings the increase over the past 4 quarters to 7.2%, the largest gain since Q3 1982. Economists were expecting productivity to fall 5.2% and unit labor costs to rise 10.5% Oil Prices Climb on Supply Worries Oil prices are rising on new supply concerns after the EU laid out its plan to phase-out Russian imports. West Texas Intermediate crude futures are up 1.2% to over $109 bbl while Brent crude futures are up 1.4% to nearly $112 bbl. OPEC+ also met today, sticking to its planned modest increase in production even amid uncertainty over supply in the market. The group will increase production by just 432,000 barrels per day in June. Meantime, the U.S. Energy Information Administration reported fuel inventories rose by 1.2 million barrels last week. That increase came as the U.S. released more from its strategic reserve. Shell Reports Highest Quarterly Profit Since 2008 Shell (SHEL) shares are up 0.9% ahead of the open after reporting its highest quarterly profit since 2008 in Q1. The oil giant reported an adjusted profit of $9.1 billion or $1.20 per share. That beat analysts’ expectations for $1.11 per share. The surging profits came as commodity prices soared in the quarter. Shell said it took $3.9 billion in post-tax charges related to pulling its business out of Russia. The company increased its dividend by about 4% to $0.25 per share and said $4 billion of its $8.5 billion share buyback program is complete. The remaining $4.5 billion in buybacks are scheduled to be complete before Shell announces Q2 earnings. Anheuser-Busch Inbev Slips Despite Q1 Earnings Beat Anheuser-Busch InBev (BUD) shares are down 0.6% in premarket trade despite beating Q1 expectations. The world’s largest brewer said EBITDA rose 7.4% year-over-year to $4.49 billion or $0.67 per share. Revenue was up 11.1% to $13.2 billion. That topped analysts’ expectations for EBITDA to rise just 4.6% and revenue to increase by 7.6%. AB InBev forecast 2022 EBITDA growth between 4% and 8% Shopify Tumbles on Earnings Miss Shopify (SHOP) shares are plunging 13.2% ahead of the open after missing Q1 expectations. The e-commerce company reported adjusted earnings of $0.20 per share on $1.2 billion in revenue. That missed analysts’ expectations for adjusted EPS of $0.64 on $1.24 billion in revenue. Shopify also announced plans to spend $2.1 billion to acquire fulfillment technology provider Deliverr. That deal will be 80% cash 20% Class A subordinate voting shares of Shopify. Shopify’s CEO said, “Our goal is to not only level the playing field for independent businesses, but tilt it in their favor – turning their size and agility into a superpower”. Sunrun Rallies on Strong Solar Demand Sunrun (RUN) shares are rallying 9.4% in premarket trade after reporting stronger than expected Q1 sales. The solar company reported a loss of $0.42 per share on $495.8 million in revenue. That was steeper than analysts’ expectations for a $0.17 per share loss but better than estimates for $401.3 million in revenue. Sunrun’s customer orders jumped 39% year-over-year as demand rose due to surging utility costs across the U.S. The company added 29,463 new customers in Q1, up 20% compared to a year ago and bringing the total to roughly 690,000. Sunrun also said it implemented “meaningful” price increases during the quarter to offset higher costs. The company hiked its guidance, expecting installed solar capacity growth of 25% or more in 2022. That’s up from previous guidance for 20% growth this year. eBay Tumbles on Lower Guidance eBay (EBAY) shares are dropping 7.4% ahead of the open after beating Q1 expectations but cutting its full-year outlook. The online retail company reported adjusted earnings of $1.05 per share on $2.48 billion in revenue. That was in-line with eBay’s previous guidance and beat analysts’ expectations for adjusted EPS of $1.03 on $2.46 billion in
Continue Reading -->Coffee With Greta: Private Job Growth Tumbles
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: +86 (+0.3%) SPX Futures: +12 (+0.3%) NASDAQ Futures: +27 (+0.2%) Good morning friends! Futures are higher as traders are laser-focused on the Fed meeting following the release of fresh jobs data this morning. Let’s get right to it! Private Job Growth Slows Sharply Job growth in the U.S. private sector slowed in April as the labor market remains historically tight. Payroll firm ADP reported private employers added 247,000 workers last month. That missed economists’ expectations for 390,000 and was a sharp decline from 479,000 in March. The slowdown was mostly due to a drop off in hiring at small businesses. Companies with less than 50 employees lost 120,000 workers in April while those with 500 or more employees added 321,000. The leisure and hospitality sector continued to lead the gains, adding 77,000 jobs last month. This comes ahead of the official April jobs report from the Labor Department on Friday. That report is expected to show the U.S. economy added 400,000 workers last month with the unemployment rate slipping to 3.5%. ADP’s chief economist said, “In April, the labor market recovery showed signs of slowing as the economy approaches full employment. While hiring demand remains strong, labor supply shortages caused job gains to soften for both goods producers and services providers.” Fed Decision Day The Federal Open Market Committee releases its rate hike decision at 2:00 p.m. ET. The Fed is expected to vote in favor of a 0.5% rate hike today and begin the process of drawing down its balance sheet. The March minutes showed most officials support that runoff happening at a pace of $95 billion per month. But several Fed officials have since expressed support to be more aggressive and start selling off assets on the balance sheet. 57% of respondents to CNBC’s May Fed Survey said they believe the bank’s aggressive tightening action will lead to a recession. Moderna Reports Blowout Q1 Moderna (MRNA) shares are rallying 6.4% ahead of the open after crushing Q1 expectations. The pharmaceutical giant reported adjusted earnings of $8.58 per share on $6.07 billion in revenue. That smashes analysts’ expectations for adjusted EPS of $5.21 on $4.62 billion in revenue. Moderna sold $5.9 billion worth of its Covid vaccine in Q1, more than triple from $1.7 billion a year ago. The company maintained its full-year guidance for $21 billion in Covid vaccine sales. CVS Rises on Q1 Earnings Beat CVS (CVS) shares are up 1.6% in premarket trade after beating Q1 expectations. The pharmacy chain reported adjusted earnings of $2.22 per share on $76.83 billion in revenue. That was better than analysts’ expectations for adjusted EPS of $2.15 on $75.39 billion in revenue. CVS saw declining demand for Covid related products during the quarter. The company administered more than 6 million Covid tests and 8 million vaccines in Q1. That’s down from 8 million tests and more than 20 million vaccines in Q4. Same-store sales rose 10.7% year-over-year, pharmacy same-store sales were up 10.1% and front store same-store sales rose 13.2%. CVS hiked its full-year guidance, forecasting earnings will range between $8.20 and $8.40 per share. Advanced Micro Devices Earnings Advanced Micro Devices (AMD) shares are jumping 6.7% ahead of the open after a Q1 earnings beat and strong outlook. The chipmaker reported adjusted earnings of $1.13 per share on $5.89 billion in revenue. That beat analysts’ expectations for adjusted EPS of $0.91 on revenue of $5.01 billion. It was the first time revenue has topped $5 billion as sales surged 71% compared to a year ago. Sales from the company’s computing and graphics segment jumped 33% year-over-year to $2.8 billion while data-center sales skyrocketed 88% to $2.5 billion. AMD forecast Q2 revenue between $6.3 billion and $6.7 billion and hiked its full-year forecast to $26.3 billion. That’s higher than analysts’ estimates for Q2 revenue of $5.14 billion and full-year revenue of $21.48 billion. Starbucks Reports Strong U.S. Sales Starbucks (SBUX) shares are 6.8% higher in premarket trade after reporting fiscal Q2 results after-hours on Tuesday. The coffee chain reported adjusted earnings of $0.59 per share on $7.64 billion. That was in line with analysts’ EPS expectations but beat estimates for $7.6 billion in revenue. The company suspended its full-year outlook as Covid lockdowns in China dent international sales. Starbucks’ same-store sales in the U.S. jumped 12% year-over-year, which helped offset a 23% drop in China. The company is making big investments in its workers to fend off a union push. Starbucks plans to spend $1 billion on higher wages, improved training, and store innovation in fiscal 2022. Employees who have been with the company between 2 to 5 years will get a 5% raise or be paid 5% above the market’s start rate, whichever is higher. Those with more than 5 years of tenure will get a 7% raise or be paid 10% above the market’s start rate. Those enhanced benefits will not be offered to workers at the stores that have voted to unionize. Starbucks is also adding more drive-through locations to boost its sales. Airbnb Revenue Surges as Travel Rebounds Airbnb (ABNB) shares are up 5.1% ahead of the open after reporting strong Q1 sales. The short-term rental company reported a loss of $0.03 per share on $1.51 billion in revenue. That was better than analysts’ expectations for a loss of $0.29 on $1.45 billion in revenue. Airbnb reported 102.1 million nights and experiences booked in the first quarter, topping pre-pandemic levels and crossing the 100 million mark for the first time ever. Revenue was up 70% compared to Q1 2021. Airbnb expects that strong growth to continue, forecasting Q2 revenue between $2.03 billion and $2.13 billion. That beat analysts’ estimates for $1.96 billion. Uber Drops on Q1 Loss Uber (UBER) shares are falling 3.4% in premarket trade after reporting an unexpected Q1 loss. The ride-share company reported
Continue Reading -->Coffee With Greta: Will the Fed Cause a Recession?
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: +28 (+0.1%) SPX Futures: +5 (+0.1%) NASDAQ Futures: +30 (+0.2%) Good morning friends! Futures are flat after markets rebounded on the first trading day of May. Let’s get right to it! Recession Fears Loom as Fed Meeting Begins The Federal Reserve kicks off its two-day policy meeting today with the bank expected to enact a 0.5% rate hike on Wednesday. The bank now has to act aggressively to get inflation under control, after getting behind the curve on prices. One former Fed official thinks a recession is “almost inevitable”. Former Fed vice chair Roger Ferguson told CNBC Monday, “It’s a witch’s brew, and the probability of a recession I think is unfortunately very, very high because their tool is crude and all they can control is aggregate demand.” Treasury yields are rising ahead of the meeting. The 10-year Treasury yield is up 8 basis points to 2.97%, that yield briefly hit 3% for the first time since late 2018 on Monday. Pfizer Slashes Outlook Pfizer (PFE) shares are down 1.1% ahead of the open after cutting its full-year outlook. The pharmaceutical giant reported adjusted earnings of $1.62 per share on $25.66 billion in revenue. That topped analysts’ expectations for adjusted EPS of $1.47 on $23.86 billion in revenue. $13.2 billion of that revenue came from Covid vaccine sales. Pfizer sold $1.5 billion worth of its oral Covid treatment Paxlovid after it was authorized in December. The company reaffirmed its guidance for $32 billion in Covid vaccine sales and $22 billion in Paxlovid sales this year. But Pfizer cut its full-year earnings guidance to between $6.25 and $6.45 per share, down from the previous $6.35 to $6.55 per share. Overall, the company is expecting $98 billion to $102 billion in sales this year. BP Crushes Q1 Expectations BP (BP) shares are 5.1% higher in premarket trade after crushing Q1 expectations. The oil giant’s Q1 underlying replacement cost profit came in at $6.2 billion. That was the highest level in more than a decade and sharply beat expectations for $4.5 billion. But BP had a headline loss of $20.4 billion last quarter caused by pre-tax charges of $24 billion and $1.5 billion related to ditching its stake in Russian oil company Rosneft. BP announced $2.5 billion more in share buybacks for the year. Oil Continues to Slip Oil prices are falling further this morning after tumbling Monday on Chinese demand concerns. West Texas Intermediate crude futures are down 0.6% to under $105 bbl while Brent crude futures are down 0.6% to under $107 bbl. Beijing is reporting dozens of new Covid cases per day but has so far avoided a lockdown by mass-testing residents. But restaurants in the city have been closed for dining in and some apartment blocks have been sealed shut. The possible EU ban of Russian oil is preventing prices from falling further. The European Commission is expected to finalize work on its next sanctions package against Russia today. The American Petroleum Institute issues its inventory report today followed by the Energy Information Administration Wednesday. JOLTS Preview The Labor Department releases its Job Openings and Labor Turnover Survey (JOLTS) for March at 10:00 a.m. ET. That report is expected to show the number of job openings in the U.S. dipped to 11.2 million in March from 11.3 million in February. There has been a major shortage of available workers in the U.S. labor market in recent months. There were just 6 million unemployed workers in March. March Factory Orders The Census Bureau reports factory orders for March at 10:00 a.m. ET. Economists expect that report to show orders rose 1.0% compared to February. Orders declined unexpectedly in February following nine straight months of increases. In Case You Missed It The U.S. manufacturing sector expanded at the slowest pace in 18 months in April. The Institute for Supply Management’s Manufacturing PMI fell 1.7% to 55.4% last month. That sharply missed expectations for the index to rise to 57.8%. Respondents to the survey highlighted rising costs, labor shortages, and supply chain disruptions as their biggest struggles in April. U.S. construction spending rose less than expected in March. The Commerce Department reported construction spending rose 0.1% vs 0.5% in February. That missed economists’ expectations for a 0.8% increase. Spending on residential construction projects rose 1% while nonresidential construction spending fell 0.8%.
Continue Reading -->Thursday’s Bullish Bar
Sami’s been bearish since the market broke down on a buy setup, so he was surprised to see a bullish day on Thursday last week. What sign would change his sentiment to be bearish again, and how is that affecting his trades for this week? In this video, Sami explains: – The hallmarks of a bullish and bearish market – Why it’s too late to go short – How he would trade a sloppy stock like CTRA – What is so beautiful about DC – Why HRT looks like a long term play
Continue Reading -->Options In Play – Earnings On The Radar Week Of 5/6/22
The mega cap Tech names have reported, but there are still plenty of big names left on the calendar. This coming week will be another busy one, with the FOMC rate decision also coming on Wednesday.
Continue Reading -->Scott Redler’s Dog Bytes: ETF Action
SPX futures are flattish but off the highs after the worst April since 2008. Some sectors made new 2022 lows and a few key names are at multi-year lows. We’ve been Tactical since April 5. This open isn’t very interesting with the Oscillator at -42. We’ll see if there’s a real bounce ahead of the Fed. Resistance is the 4162-4270 area. The longer we stay below that, the higher the probability we see the 3850-4000 region.ARKK has made lower highs and lower lows for almost a year and a half. My moving average rules should have helped you stay out of the way. When something is below the 8/21 day, you can’t hold onto it. Last week’s low was $45.89. Use that for active action today. XBI is weak but sometimes gives trades. It broke $80 to make a new low of $72.59 last week. Use that pivot for active action. XLE lost special status last when it broke the $79 area on April 21. Last Monday, it made a low of $71 and had a decent bounce. I’d stay tactical here. This sector needs time to re-build. Banks haven’t been a place to hide all year. XLF is broken like most sectors. Use last week’s low of $34.45 for tactical action.Positions Disclosure as of 5/2/2022 at 8:52 a.m. ET
Continue Reading -->Coffee With Greta: All Eyes on the Fed
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: +17 (+0.1%) SPX Futures: -7 (-0.2%) NASDAQ Futures: -37 (-0.3%) Good morning friends! Futures are mostly lower as traders gear up for the start of May trade with a big week of economic data on the plate. Let’s get right to it! Eyes on the Fed Traders are focused on Wednesday with the Fed decision scheduled for 2:00 p.m. ET. CME Group’s FedWatch Tool shows traders see a 99.8% chance the bank will enact its first 0.5% rate hike. The Fed meeting kicks off Tuesday and comes after the Core PCE Price Index, which is the bank’s favorite inflation gauge, jumped 5.2% year-over-year in March. The market expects the Fed to get more aggressive on inflation moving forward, with 91.3% predicting a 0.75% rate hike in June. Big Week of Economic Data On top of the Fed meeting, traders will get a flood of key economic data this week. It begins with both the S&P Global and ISM Manufacturing PMI surveys for April at 10:00 a.m. ET today. The Commerce Department also releases its March construction spending report at 10:00 a.m. Tuesday morning, the Labor Department releases its March Job Openings and Labor Turnover Survey (JOLTS) and the Commerce Department reports March factory orders. Wednesday morning payroll firm ADP releases its April private jobs report and the Commerce Department releases the March trade deficit. The S&P Global and ISM Services PMI surveys will also be released Wednesday. On Thursday the Labor Department reports weekly jobless claims as well as Q1 productivity and unit labor costs. And finally, the official April jobs report will be released Friday. The week also includes more Q1 earnings reports with 150 S&P 500 companies scheduled to report. Oil Prices Slip on China Growth Concerns Oil prices are down today amid new concerns about weak economic growth in China. West Texas Intermediate crude futures are down 3.9% to $100.50 bbl while Brent crude futures are down 3.6% to $103.30 bbl. The drop comes after China released new data over the weekend taht showed its factory activity contracted in April. That was the second straight monthly contraction and was the lowest level of activity since February 2020. The EU is still considering a ban of Russian oil imports by the end of the year. The European Commission held talks with EU member states about that proposal over the weekend. Berkshire Hathaway Holds Annual Shareholders Meeting Berkshire Hathaway (BRK.A) held its first in-person annual shareholder’s meeting since 2019 on Saturday. Berkshire Chairman Warren Buffett bemoaned the stock market as a “gambling parlor” during his speech at the meeting. Buffett said, “Wall Street makes money, one way or another, catching the crumbs that fall off the table of capitalism.” Vice-chairman Charlie Munger said, “We have people who know nothing about stocks being advised by stockbrokers who know even less”. Munger said the market is “almost a mania of speculation”. The two also railed against cryptocurrencies, specifically Bitcoin, with Buffett saying it “doesn’t produce anything”. “Assets, to have value, have to deliver something to somebody,” said Buffett. “And there’s only one currency that’s accepted. You can come up with all kinds of things. We can put up Berkshire coins, put up Berkshire money but in the end, this is money,” as he held up a $20 bill. Munger discouraged Americans from investing their retirement money into Bitcoin. “When you have your own retirement account, and your friendly adviser suggests you put all the money into bitcoin, just say no,” he said. Berkshire Increases Stake in Activision Blizzard Activision Blizzard (ATVI) shares are up 1.8% ahead of the open after Warren Buffett announced Berkshire increased its stake in the company. Berkshire now owns about 9.5% of Activision shares as part of a merger arbitrage play. The investment is a bet that Microsoft’s (MSFT) planned acquisition of Activision will go through. Microsoft plans to buy the video game company for $95 per share. Berkshire has been buying more shares as the stock trades below that price. “If the deal goes through, we make some money,” said Buffett. In Case You Missed It The Nasdaq logged its worst month since October 2008 in April and hit a fresh 2022 low at the close on Friday. The tech-heavy index tumbled 13.26% last month. The Dow finished April 4.9% lower while the S&P 500 tumbled 8.8%. The S&P is down 13.3% YTD, marking the worst start to a year since 1939. The Nasdaq is deep in bear market territory, down more than 22% from its most recent record.
Continue Reading -->Coffee With Greta: Is Apple Rotten?
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: -135 (-0.4%) SPX Futures: -39 (-0.9%) NASDAQ Futures: -165 (-1.2%) Good morning friends! Futures are lower following a string of earnings disappointments and the release of hot inflation data. Let’s get right to it! Apple Beats Expectations, Dips On Supply Chain Warnings Apple (AAPL) shares are slipping 1.6% ahead of the open after topping fiscal Q2 expectations but warning about supply chain issues. The tech giant reported earnings of $1.52 per share on $97.28 billion in revenue. That was better than analysts’ expectations for EPS of $1.43 on $93.89 billion in revenue. iPhone revenue rose 5.5% annually to $50.57 billion. Apple did not provide Q2 guidance. The board of directors authorized $90 billion in share buybacks and the company raised its cash dividend by 5% to $0.23 per share. CEO Tim Cook said on the earnings call Apple is “not immune” to supply chain challenges. Executives expect those issues will dent sales by $4 billion to $8 billion. Amazon Tumbles On Surprise Loss, Weak Outlook Amazon (AMZN) shares are plunging 10.1% in premarket trade after reporting a surprise Q1 loss and forecasting a weaker-than-expected Q2. The online retail giant reported a loss of $7.56 per share. That included a $7.6 billion loss from Amazon’s investment in electric truck maker Rivian (RIVN) as the stock plunged more than 50% in Q1. Revenue rose 7% year-over-year to $116.4 billion. That was in-line with analysts’ expectations but marked the slowest growth in 20 years. Amazon Web Services brought in $18.44 billion in revenue vs $18.27 billion expected. Ad revenue rose 25% to $7.88 billion but that was lower than analysts’ estimates for $8.17 billion. Amazon forecast Q2 revenue between $116 billion to $121 billion. Wall Street was expecting guidance for $125.5 billion in revenue. Intel Slips On Disappointing Guidance Intel (INTC) shares are down 4.4% ahead of the open on disappointing guidance despite beating Q1 expectations. The chipmaker reported adjusted earnings of $0.87 per share on $18.35 billion in revenue. That topped analysts’ expectations for adjusted EPS of $0.81 on $18.31 billion in revenue. Sales at Intel’s client computing division, which includes PC chips, fell 13% to $9.29 billion vs $9.42 billion expected. Revenue in the company’s data-center category rose 22% to $6 billion vs expectations for $6.78 billion. The company forecast adjusted Q2 EPS of $0.70 and $18 billion in revenue. That missed analysts’ estimates for adjusted EPS of $0.83 on $18.38 billion in revenue. Roku Pops On User Increase Roku (ROKU) shares are up 4% in premarket trade after beating Q1 revenue expectations. The digital media company reported a loss of $0.19 per share on $734 million in revenue. That loss was in-line with analysts’ expectations but revenue beat expectations for $718 million. Roku added 1.1 million active accounts last quarter, bringing the total to 61.3 million. That was just shy of analysts’ expectations for 61.8 million. The CEO said, “We have delivered solid performance in a challenging operating environment and expect that we will continue to navigate through macro headwinds, including inflationary pressures, geopolitical conflict, and supply chaindisruptions”. Roku forecast Q2 revenue will come in at $805 million vs expectations for $816 million. Robinhood Dragged Down by Weak Q1 Results Robinhood (HOOD) shares are tumbling 11.3% ahead of the open after reporting a steeper than expected first-quarter loss. The stock trading platform reported a loss of $0.45 per share on $299 million in revenue. That was worse than analysts’ expectations for a loss of $0.36 per share on $355.8 million in revenue. Robinhood’s monthly active users fell for the second straight quarter. The company had 15.9 million MAUs in Q1 vs 17.3 million in Q4. Average revenue per user tumbled to $53 vs $137 a year ago. This comes after CEO Vlad Tenev announced Robinhood is firing 9% of its full-time employees earlier this week. The stock is trading far below its IPO price of $38 per share. Exxon Mobil Profits Hit By Russia Charge Exxon Mobil (XOM) shares are down 1.2% in premarket trade after missing Q1 expectations. The oil company reported adjusted earnings of $2.07 per share on $90.5 billion in revenue. That missed analysts’ expectations for adjusted EPS of $2.23 as the quarter included a $3.4 billion charge related to its Sakhalin-1 operation in Russia. But revenue beat expectations for $82.8 billion. Chevron Profit Quadruples Chevron (CVX) shares are down 1.2% ahead of the open despite reporting huge Q1 profits. The oil giant reported adjusted earnings of $3.36 per share $54.37 billion in revenue. The $6.3 billion in profit was more than quadruple $1.37 billion in Q1 2021 and revenue jumped from $32.03 billion. Wall Street had forecast adjusted EPS of $3.27 on $47.94 billion in revenue. Musk Sells $4 Billion in Tesla Stock After Twitter Deal A new SEC filing shows Tesla (TSLA) CEO Elon Musk sold nearly $4 billion worth of the electric automaker’s stock this week. The bulk of those sales were made on Tuesday, the day after Twitter (TWTR) accepted Musk’s $44 billion takeover offer. Tesla shares tumbled 12% on Tuesday. In a tweet Thursday, Musk said “No further TSLA sales planned after today”. Tesla shares are 2.2% higher in premarket trade. PCE Inflation Hits 40-Year High The Bureau of Labor Statistics’ Personal Consumption Expenditures index shows prices continued to soar in March. The headline PCE Price Index surged 0.9% monthly and jumped 6.6% annually. That was the fastest annual price gain since January 1982 and up from 6.4% in February. But core inflation pressures cooled in March. The Core PCE Price Index, which is the Fed’s preferred inflation measure and excludes food and energy prices, rose 0.3% monthly and 5.2% annually. That was in-line with expectations on a monthly basis and a cooldown from 5.3% annual inflation in February. Economists are hoping the slowing core reading means inflation may have peaked in
Continue Reading -->Coffee With Greta: Twitter, Meta Pop on Earnings
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: +234 (+0.7%) SPX Futures: +54 (+1.3%) NASDAQ Futures: +239 (+1.8%) Good morning friends! Futures are higher on another big day of earnings. Let’s get right to it! Twitter Tops Q1 User Expectations Twitter (TWTR) shares are up 1.1% in premarket trade after reporting better-than-expected user growth in Q1. The social media giant reported net income of $513 million in the quarter, or $0.61 per share. That figure was not comparable to analysts’ expectations as it includes a gain from Twitter’s sale of MoPub. Twitter’s $1.2 billion in revenue was shy of analysts’ estimates for $1.23 billion. But the company had 229 million monetizable daily active users (mDAUs) last quarter, better than 226.9 million expected by analysts. U.S. mDAUs jumped 6.4% year-over-year while international mDAUs surged 18.1%. The positive report came as a surprise to many analysts who had been speculating Twitter accepted Musk’s buyout deal earlier this week in anticipation of bad earnings. The company declined to provide guidance citing that deal. Meta Surges On Q1 Earnings Beat Meta Platforms (FB) shares are rallying 14.2% ahead of the open after beating Q1 expectations. The Facebook parent company reported adjusted earnings of $2.72 per share on $27.91 billion in revenue. That topped analysts’ expectations for adjusted EPS of $2.56 but was shy of estimates for $28.2 billion in revenue. Revenue rose 7% year-over-year, marking the first time in company history that metric has been in single digits. Daily active users rose more than expected, after declining for the first time in Q4. Facebook had 1.96 billion DAUs in Q1, up 3 million from Q4 and better than 1.95 billion expected. Monthly active users came in shy at 2.94 billion vs 2.97 billion expected. The company continued to ramp up spending on the metaverse with its Reality Labs segment losing $2.96 billion in Q1, up more than 61% year-over-year. Meta forecast Q2 revenue between $28 billion and $30 billion in Q2, falling short of Wall Street’s expectations for $30.6 billion. The company lowered its total expenses guidance for 2022 to between $87 billion and $92 billion. Ford Tops Q1 Expectations Ford (F) shares are up 1.5% in premarket trade after reporting a strong first quarter. The automaker reported adjusted earnings of $0.38 per share on $32.1 billion in revenue. That was better than analysts’ expectations for adjusted EPS of $0.37 on $31.13 billion in revenue. The adjusted results excluded the $5.4 billion loss caused by Ford’s 12% stake in electric truck maker Rivian (RIVN). Ford reiterated its guidance for full-year pretax adjusted earnings between $11.5 billion and $12.5 billion. Analysts had been expecting a downgrade due to inflation and continued supply chain issues. The CFO said he expects Ford’s wholesale volumes to increase by 10% to 15% this year compared to 2021. PayPal Cuts Outlook PayPal (PYPL) shares are 2.6% higher ahead of the open despite the company cutting its earnings outlook. PayPal reported adjusted Q1 earnings of $0.88 per share on $6.5 billion in revenue. That was in-line with analysts’ expectations. The fintech giant had 429 million active accounts last quarter, up from 426 million in Q4 and better than analysts’ estimates for 428.4 million. PayPal forecast adjusted Q2 earnings of $0.86 per share and $6.8 billion in revenue. That missed Wall Street’s outlook for adjusted EPS of $1.21 and revenue of $7.1 billion. The company also cut its full-year outlook, forecasting revenue growth between 11% and 13% this year and adjusted EPS between $3.81 and $3.93. Pinterest Rallies On Earnings Beat, User Growth Pinterest (PINS) shares are rising 7.7% in premarket trade after reporting strong Q1 user numbers. The social media company reported adjusted earnings of $0.10 per share on $575 million in revenue. That beat analysts’ expectations for adjusted EPS of $0.04 on $573 million in revenue. Revenue rose 18% year-over-year. Pinterest had 433 million monthly active users last quarter, up from 431 million in Q4. That was shy of analysts’ expectations for 437.0 million but was the first increase in a year. Pinterest forecast its Q2 revenue will rise 11% year-over-year to $680 million. That missed Wall Street’s expectations for $693 million. Qualcomm Crushes Fiscal Q2 Expectations Qualcomm (QCOM) shares are up 6.2% ahead of the open after crushing fiscal Q2 expectations. The chipmaker reported adjusted earnings of $3.21 per share on $11.16 billion in revenue. That was sharply higher than analysts’ expectations for adjusted EPS of $2.91 on $10.6 billion in revenue. Profits surged 69% year-over-year while revenue jumped 41%. Qualcomm reported $9.55 billion in chip sales last quarter, up 52% year-over-year and better than $8.86 billion analysts were expecting. Its technology licensing sales fell 2% annually to $1.58 billion but still topped estimates for $1.55 billion. Qualcomm forecast fiscal Q3 earnings between $2.75 and $2.95 per share on $01.9 billion in revenue. That was stronger than expected guidance for $9.98 billion in sales. Southwest Airlines Jumps On Revenue Beat Southwest Airlines (LUV) shares are 3.4% higher in premarket trade after beating Q1 revenue expectations. The airline reported an adjusted loss of $0.32 per share vs analysts’ expectations for a $0.30 loss. Southwest’s $4.69 billion in revenue was higher than estimates for $4.67 billion. March was the first month that operating revenue was higher than 2019 levels since the pandemic began. Southwest expects to be profitable for the full-year and forecast Q2 revenue growth of 8% to 12% compared to 2019. Teladoc Craters After Sharp Q1 Loss Teladoc (TDOC) shares are plummeting 44.1% in premarket trade after slashing its outlook. The telemedicine company reported a loss of $41.58 per share, which included a $6.6 billion impairment charge related to goodwill. Teladoc’s revenue of $565.4 million missed analysts’ expectations for $569 million. The company forecast Q2 adjusted ebitda of $39 million to $49 million on $580 million to $600 million in revenue. That missed analysts’ estimates for adjusted ebitda of
Continue Reading -->