{"id":61551,"date":"2022-05-27T08:58:26","date_gmt":"2022-05-27T12:58:26","guid":{"rendered":"https:\/\/www.t3live.com\/blog\/?p=61551"},"modified":"2022-05-27T09:23:13","modified_gmt":"2022-05-27T13:23:13","slug":"coffee-with-greta-inflation-cools-stocks-jump","status":"publish","type":"post","link":"https:\/\/blog.t3live.com\/2022\/05\/27\/coffee-with-greta-inflation-cools-stocks-jump\/","title":{"rendered":"Coffee With Greta: Inflation Cools and Stocks Get Hot"},"content":{"rendered":"

Editor's Note:<\/strong> Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here<\/span><\/a><\/strong>.<\/p>\n

********<\/p>\n

DJIA Futures: <\/b>+88 (+0.3%)<\/span><\/p>\n

SPX Futures: <\/b>+24 (+0.6%)<\/span><\/p>\n

NASDAQ Futures: <\/b>+120 (+1%)<\/span><\/p>\n

Good morning friends!<\/span><\/p>\n

Futures are rising as new data shows inflation pressures are slowing.<\/span><\/p>\n

Let\u2019s get right to it!<\/span><\/p>\n

PCE Inflation Cools<\/strong><\/h2>\n

The Bureau of Labor Statistics personal consumption expenditures index shows inflation pressures slowing in the U.S. economy.\u00a0<\/span><\/p>\n

The headline PCE price index rose 0.2% monthly and 6.3% year-over-year.<\/span><\/p>\n

That was a slowdown from 0.9% monthly and 6.6% annually in March.<\/span><\/p>\n

The core PCE price index, which excludes food and energy, rose 0.3% monthly and 4.9% annually.\u00a0<\/span><\/p>\n

That was also a slowdown from March and in line with economists\u2019 expectations.<\/span><\/p>\n

The core PCE index is the Fed\u2019s preferred measure of inflation.<\/span><\/p>\n

The data supports the Fed\u2019s theory that inflation may have already peaked and is now trending downward.<\/span><\/p>\n

The PCE index also showed an increase in incomes and consumer spending last month.<\/span><\/p>\n

Personal incomes rose 0.4% monthly, slightly lower than expectations for 0.5%.<\/span><\/p>\n

Consumer spending was up 0.9%.<\/span><\/p>\n

Adjusted for inflation, disposable incomes were flat and consumer spending rose 0.7%.<\/span><\/p>\n

Gap Plunges After Slashing Guidance<\/strong><\/h2>\n

Gap <\/b>(GPS) shares are plunging 18.8% ahead of the open after slashing its full-year guidance.\u00a0<\/span><\/p>\n

The clothing retailer reported a fiscal Q1 loss of $0.44 per share on $3.48 billion in revenue.<\/span><\/p>\n

Revenue was down 13% year-over-year but slightly ahead of analysts\u2019 expectations.\u00a0<\/span><\/p>\n

Same-store sales dropped 14% year-over-year vs expectations for a 12.2% decline.<\/span><\/p>\n

Online sales were down 17% compared to a year ago and in-store sales fell 10%.<\/span><\/p>\n

Gap sales dropped 11%, Old Navy sales tumbled 22%, Athleta sales fell 7%, and Banana Republic sales rose 27%.<\/span><\/p>\n

The company forecast fiscal 2022 adjusted earnings between $0.30 and $0.60 per share, that\u2019s down from previous guidance for4 $1.84 to $2.05.\u00a0<\/span><\/p>\n

Analysts were looking for EPS guidance of $1.34.<\/span><\/p>\n

Gap\u2019s CFO said the revised outlook accounts for \u201cexecutional challenges\u201d at Old Navy, uncertain macroeconomic conditions, and inflationary pressures.<\/span><\/p>\n

Big Lots Tumbles On Surprise Q1 Loss<\/strong><\/h2>\n

Big Lots <\/b>(BIG) shares are falling 17.3% in premarket trade after reporting a surprise loss in the first quarter.<\/span><\/p>\n

The retailer reported a loss of $0.39 per share on $1.37 billion in revenue.\u00a0<\/span><\/p>\n

That was sharply lower than analysts\u2019 expectations for a profit of $0.91 per share on $1.46 billion in revenue.\u00a0<\/span><\/p>\n

Big Lots said same-store sales slowed in April, prompting it to markdown prices.\u00a0<\/span><\/p>\n

The CEO blamed that slowdown on inflationary pressures.<\/span><\/p>\n

The company\u2019s gross margin rate shrunk to 36.7% last quarter from 40.2% a year ago.\u00a0<\/span><\/p>\n

Big Lots expects comparable sales to fall year-over-year in Q2 and its gross margin rate to be in the low-30s as costs rise.<\/span><\/p>\n

Costco Sales Growth Falls Short<\/strong><\/h2>\n

Costco <\/b>(COST) shares are down 1.6% ahead of the open after beating fiscal Q3 revenue expectations but missing growth estimates.<\/span><\/p>\n

The big-box retailer reported earnings of $3.04 per share on $52.6 billion in revenue.\u00a0<\/span><\/p>\n

That was in-line with analysts\u2019 EPS expectations and better than revenue estimates for $51.56 billion.\u00a0<\/span><\/p>\n

But same-store sales growth fell short.<\/span><\/p>\n

Costco said sales at stores open for at least a year jumped 10.8% year-over-year vs expectations for 11.8% growth.\u00a0<\/span><\/p>\n

Ulta Rallies On Earnings Beat, Strong Guidance<\/strong><\/span><\/h2>\n

Ulta <\/b>(ULTA) shares are up 8.1% in premarket trade after beating Q1 expectations and raising its full-year outlook.\u00a0<\/span><\/p>\n

The beauty retailer reported earnings of $6.30 per share on $2.34 billion in revenue.\u00a0<\/span><\/p>\n

That was better than analysts\u2019 expectations for EPS of $4.46 on $2.12 billion in revenue.\u00a0<\/span><\/p>\n

Comparable sales jumped 18% year-over-year, with double-digit increases across all major categories.\u00a0<\/span><\/p>\n

Ulta also said it has opened 10 new stores this year.\u00a0<\/span><\/p>\n

The company forecast full-year revenue between $9.35 billion and $9.55 billion with comparable sales growth between 6% and 8%.\u00a0<\/span><\/p>\n

That was up from the previous forecast for comparable sales growth between 3% and 4% with revenue between $9.05 billion and $9.15 billion.<\/span><\/p>\n

Ulta also expects full-year earnings between $19.20 to $20.10 per share vs the previous outlook for $18.20 to $18.70.<\/span><\/p>\n

The company still plans to open 50 new stores total in 2022.<\/span><\/p>\n

Dell Jumps On Earnings Beat<\/strong><\/h2>\n

Dell Technologies <\/b>(DELL) shares are up 11.5% ahead of the open after crushing fiscal Q1 earnings expectations.\u00a0<\/span><\/p>\n

The laptop maker reported non-GAAP earnings of $1.84 per share on $26.1 billion in revenue.\u00a0<\/span><\/p>\n

That beat the company\u2019s own forecast for EPS of $1.25 to $1.50.<\/span><\/p>\n

Analysts were expecting $25 billion in revenue.<\/span><\/p>\n

Sales in Dell\u2019s Infrastructure Solutions Group (ISG) jumped 16% year-over-year to $9.3 billion.\u00a0<\/span><\/p>\n

That was better than Wall Street\u2019s expectations for 5% growth to $8.3 billion.<\/span><\/p>\n

The Client Solutions Group, which is Dell\u2019s PC business, brought in $15.6 billion in revenue.\u00a0<\/span><\/p>\n

That was up 17% compared to a year ago and higher than consensus estimates for $15.5 billion.\u00a0<\/span><\/p>\n

Twitter Shareholders Sue Twitter and Musk<\/strong><\/h2>\n

Twitter <\/b>(TWTR) shareholders are suing the social media company and Elon Musk over their chaotic handling of Musk\u2019s acquisition deal.\u00a0<\/span><\/p>\n

The proposed class-action suit accuses Musk of violating California\u2019s corporate laws and engaging in market manipulation by creating doubt he would go through with the deal.\u00a0<\/span><\/p>\n

It says, \u201cMusk proceeded to make statements, send tweets, and engage in conduct designed to create doubt about the deal and drive Twitter\u2019s stock down substantially in order to create leverage that Musk hoped to use to either back out of the purchase or to re-negotiate the buyout price by as much as 25% which, if accomplished, would result in an $11 billion reduction in the Buyout consideration.\u201d<\/span><\/p>\n

The suit also claims he financially benefitted by delaying the disclosure of his stake.\u00a0<\/span><\/p>\n

Shareholders allege Musk bought the stock while he knew insider information from private conversations with board members and executives, including former CEO Jack Dorsey.<\/span><\/p>\n

TWTR shares have seen volatile swings since the <\/span>Tesla <\/b>(TSLA) boss originally disclosed his investment in early April.\u00a0<\/span><\/p>\n

The stock popped to a high of $54.57 per share on April 5, the day after Musk revealed his stake.<\/span><\/p>\n

But shares have since tumbled about 12% since he offered to buy the company at $54.20 per share.<\/span><\/p>\n

Oil Slips<\/strong><\/h2>\n

Oil prices are slipping even as supply concerns remain.\u00a0<\/span><\/p>\n

West Texas Intermediate crude futures are down 0.4% to about $113 bbl with Brent crude futures flat at $117 bbl.<\/span><\/p>\n

The EU is still working to get Hungary on board with its proposed ban of Russian oil imports.\u00a0<\/span><\/p>\n

The European Council president said he\u2019s confident a deal can be reached before the next meeting on May 30.<\/span><\/p>\n

Both WTI and Brent are on track for weekly gains.<\/span><\/p>\n

Gas Prices Halt Record-Breaking Streak<\/strong><\/h2>\n

U.S. gas prices slipped today after setting a fresh record for 17 straight days.<\/span><\/p>\n

AAA<\/span><\/a> shows the national average for regular dipped back to $4.599\/gal overnight.\u00a0<\/span><\/p>\n

The price for regular is still nearly 50 cents higher than a month ago and up more than $1.50 from this same time last year.<\/span><\/p>\n

Diesel prices are continuing to cool, slipping to $5.530\/gal today.\u00a0<\/span><\/p>\n

Consumer Sentiment Expected To Be Unchanged<\/strong><\/span><\/h2>\n

The University of Michigan releases its final consumer sentiment index for May at 10:00 a.m. ET.<\/span><\/p>\n

That survey is expected to be unchanged from the flash reading of 59.1 earlier this month.<\/span><\/p>\n

That marked the lowest reading since 2011, down from 65.2 in April.\u00a0<\/span><\/p>\n

The sentiment index also includes consumer inflation expectations for the next 1-year and 5-years.<\/span><\/p>\n

In Case You Missed It<\/strong><\/h2>\n
    \n
  • The National Association of Realtors reported pending home sales tumbled 3.9% in April. That was higher than economists\u2019 expectations for a 2% decline and the sixth straight monthly drop. A drop in pending sales is a leading indicator for existing home sales in the future. The NAR says the housing market boom may be coming to an end as mortgage rates jump.<\/span><\/li>\n
  • The number of home listings jumped sharply last week. Realtor.com says it saw a 9% increase in the supply of homes for sale last week compared to a year ago. <\/span>Redfin <\/b>(RDFN) also reported new listing rose nearly twice as fast over the 4 weeks ending May 15 compared to the same time last year. Experts say the jump comes as homeowners worry they may miss out on the hot housing market.<\/span><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"

    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: +88 (+0.3%) SPX Futures: +24 (+0.6%) NASDAQ Futures: +120 (+1%) Good morning friends! Futures are rising as new data shows inflation pressures are slowing. Let\u2019s get right to it! PCE Inflation Cools The Bureau of Labor Statistics personal consumption expenditures index shows inflation pressures slowing in the U.S. economy.\u00a0 The headline PCE price index rose 0.2% monthly and 6.3% year-over-year. That was a slowdown from 0.9% monthly and 6.6% annually in March. The core PCE price index, which excludes food and energy, rose 0.3% monthly and 4.9% annually.\u00a0 That was also a slowdown from March and in line with economists\u2019 expectations. The core PCE index is the Fed\u2019s preferred measure of inflation. The data supports the Fed\u2019s theory that inflation may have already peaked and is now trending downward. The PCE index also showed an increase in incomes and consumer spending last month. Personal incomes rose 0.4% monthly, slightly lower than expectations for 0.5%. Consumer spending was up 0.9%. Adjusted for inflation, disposable incomes were flat and consumer spending rose 0.7%. Gap Plunges After Slashing Guidance Gap (GPS) shares are plunging 18.8% ahead of the open after slashing its full-year guidance.\u00a0 The clothing retailer reported a fiscal Q1 loss of $0.44 per share on $3.48 billion in revenue. Revenue was down 13% year-over-year but slightly ahead of analysts\u2019 expectations.\u00a0 Same-store sales dropped 14% year-over-year vs expectations for a 12.2% decline. Online sales were down 17% compared to a year ago and in-store sales fell 10%. Gap sales dropped 11%, Old Navy sales tumbled 22%, Athleta sales fell 7%, and Banana Republic sales rose 27%. The company forecast fiscal 2022 adjusted earnings between $0.30 and $0.60 per share, that\u2019s down from previous guidance for4 $1.84 to $2.05.\u00a0 Analysts were looking for EPS guidance of $1.34. Gap\u2019s CFO said the revised outlook accounts for \u201cexecutional challenges\u201d at Old Navy, uncertain macroeconomic conditions, and inflationary pressures. Big Lots Tumbles On Surprise Q1 Loss Big Lots (BIG) shares are falling 17.3% in premarket trade after reporting a surprise loss in the first quarter. The retailer reported a loss of $0.39 per share on $1.37 billion in revenue.\u00a0 That was sharply lower than analysts\u2019 expectations for a profit of $0.91 per share on $1.46 billion in revenue.\u00a0 Big Lots said same-store sales slowed in April, prompting it to markdown prices.\u00a0 The CEO blamed that slowdown on inflationary pressures. The company\u2019s gross margin rate shrunk to 36.7% last quarter from 40.2% a year ago.\u00a0 Big Lots expects comparable sales to fall year-over-year in Q2 and its gross margin rate to be in the low-30s as costs rise. Costco Sales Growth Falls Short Costco (COST) shares are down 1.6% ahead of the open after beating fiscal Q3 revenue expectations but missing growth estimates. The big-box retailer reported earnings of $3.04 per share on $52.6 billion in revenue.\u00a0 That was in-line with analysts\u2019 EPS expectations and better than revenue estimates for $51.56 billion.\u00a0 But same-store sales growth fell short. Costco said sales at stores open for at least a year jumped 10.8% year-over-year vs expectations for 11.8% growth.\u00a0 Ulta Rallies On Earnings Beat, Strong Guidance Ulta (ULTA) shares are up 8.1% in premarket trade after beating Q1 expectations and raising its full-year outlook.\u00a0 The beauty retailer reported earnings of $6.30 per share on $2.34 billion in revenue.\u00a0 That was better than analysts\u2019 expectations for EPS of $4.46 on $2.12 billion in revenue.\u00a0 Comparable sales jumped 18% year-over-year, with double-digit increases across all major categories.\u00a0 Ulta also said it has opened 10 new stores this year.\u00a0 The company forecast full-year revenue between $9.35 billion and $9.55 billion with comparable sales growth between 6% and 8%.\u00a0 That was up from the previous forecast for comparable sales growth between 3% and 4% with revenue between $9.05 billion and $9.15 billion. Ulta also expects full-year earnings between $19.20 to $20.10 per share vs the previous outlook for $18.20 to $18.70. The company still plans to open 50 new stores total in 2022. Dell Jumps On Earnings Beat Dell Technologies (DELL) shares are up 11.5% ahead of the open after crushing fiscal Q1 earnings expectations.\u00a0 The laptop maker reported non-GAAP earnings of $1.84 per share on $26.1 billion in revenue.\u00a0 That beat the company\u2019s own forecast for EPS of $1.25 to $1.50. Analysts were expecting $25 billion in revenue. Sales in Dell\u2019s Infrastructure Solutions Group (ISG) jumped 16% year-over-year to $9.3 billion.\u00a0 That was better than Wall Street\u2019s expectations for 5% growth to $8.3 billion. The Client Solutions Group, which is Dell\u2019s PC business, brought in $15.6 billion in revenue.\u00a0 That was up 17% compared to a year ago and higher than consensus estimates for $15.5 billion.\u00a0 Twitter Shareholders Sue Twitter and Musk Twitter (TWTR) shareholders are suing the social media company and Elon Musk over their chaotic handling of Musk\u2019s acquisition deal.\u00a0 The proposed class-action suit accuses Musk of violating California\u2019s corporate laws and engaging in market manipulation by creating doubt he would go through with the deal.\u00a0 It says, \u201cMusk proceeded to make statements, send tweets, and engage in conduct designed to create doubt about the deal and drive Twitter\u2019s stock down substantially in order to create leverage that Musk hoped to use to either back out of the purchase or to re-negotiate the buyout price by as much as 25% which, if accomplished, would result in an $11 billion reduction in the Buyout consideration.\u201d The suit also claims he financially benefitted by delaying the disclosure of his stake.\u00a0 Shareholders allege Musk bought the stock while he knew insider information from private conversations with board members and executives, including former CEO Jack Dorsey. TWTR shares have seen volatile swings since the Tesla (TSLA) boss originally disclosed his investment in early April.\u00a0 The stock popped to a high of $54.57 per share on April 5, the day after Musk revealed his stake.<\/p>\n","protected":false},"author":41,"featured_media":61553,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[739],"tags":[],"class_list":["post-61551","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-coffee-with-greta"],"_links":{"self":[{"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/posts\/61551","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/users\/41"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/comments?post=61551"}],"version-history":[{"count":5,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/posts\/61551\/revisions"}],"predecessor-version":[{"id":61557,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/posts\/61551\/revisions\/61557"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/media\/61553"}],"wp:attachment":[{"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/media?parent=61551"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/categories?post=61551"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/tags?post=61551"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}