February 2, 2023

Stock futures rise as Wall Street tries to recover from consecutive losing sessions

Stock futures rise as Wall Street tries to recover from consecutive losing sessions

OPEC + prepares to increase oil production by a small amount

OPEC and its allies agreed on Wednesday to increase oil production by a small amount by 100,000 barrels per day in response to President Joe Biden’s visit to Saudi Arabia last month. During the visit, Biden aimed to persuade the group’s leader to pump more oil to help the US economy and global supplies. A small increase is seen as a rejection.

– Carmen Renick

Starbucks shares soared after earnings release

shares Starbucks It gained nearly 2% in pre-market trading after the coffee chain reported quarterly earnings Tuesday after the bell. The company beat expectations on earnings and revenue, buoyed by US demand for cold drinks even amid rising inflation.

“We’ve already had a record number of customers and average weekly sales” over the last quarter, said Rachel Ruggeri, Starbucks’ chief financial officer, on CNBC’s “Squawk Box.”

– Carmen Renick

Moderna rises after beating profit expectations

shares Moderna Up nearly 4% in premarket trading after covid-19 vaccine maker Published quarterly results That beat Wall Street expectations for both profits and revenue. In addition, the company announced a $3 billion share buyback, and maintained its full-year forecast.

– Carmen Renick

RBC’s Calvasina says potential earnings reviews pose a risk in the second half

This earnings season, results have generally come in above Wall Street expectations, indicating that companies are doing better in current economic conditions than analysts had hoped, RBC head of US equity strategy Laurie Calvasina wrote in a note Wednesday.

“The good news for the US stock market is that evidence of resilience in corporate earnings continues to emerge,” Calvasina said. “The bad news for the US stock market is that the possibility of further downside earnings revision remains risky as we go deeper into the second half of the year.”

So far, earnings and revenue estimates are down for the second half of 2022 and for the whole of 2023.

However, the strength of corporate earnings this quarter may indicate that any upcoming economic downturn will be short and shallow, according to Calvasina. This is fine for stocks now, but could make them vulnerable to more volatility.

“This has been supportive of stock prices over the past few weeks, but going forward, it also tells us that the rally in stocks is fragile given the potential for further downward revisions to earnings as 2023 approaches,” she said.

– Carmen Renick

CVS Gains On Earnings Beat

shares CVS Health It rose more than 3% in pre-market trading after the company announced Quarterly earnings better than expected before the opening bell. The company also raised its earnings forecast for the year, saying health services are helping drive sales.

– Carmen Renick

Pelosi is leaving Taiwan

House Speaker Nancy Pelosi left Taiwan on Wednesday after a visit that raised tensions with China and shook financial markets slightly.

Pelosi Taiwan President Tsai Ing-wen met on Wednesday. China, which considers the disputed island part of its territory, has increased military exercises in the Taiwan Strait amid its visit. The S&P 500 is down about 1% this week as traders worry about the implications of Pelosi’s trip on relations with China. But the market was poised for some comfortable rally on Wednesday after its departure.

– John Meloy

AMD shares decline due to poor revenue guidance

AMD shares traded 5% lower in the primary market after the chip maker released third-quarter revenue Guidance was lower than analysts’ expectations.

AMD said it expects revenue of $6.7 billion for the third quarter, below Refinitiv’s forecast of $6.82 billion.

The disappointing guidance overshadowed better-than-expected earnings and revenue for the second quarter.

Fred Ambert

European markets were mixed as cautious sentiment persisted; Avast up 42%

European stocks It was mixed on Wednesday, with the cautious regional trend continuing this week.

pan europe Stokes 600 It slipped 0.2% in early trade, with autos down 1.5% while technology shares rose 1.2%.

It’s a profitable day in Europe, with Commerzbank, SocGen, BMW, Banco BPM, Siemens Healthineers, Veolia and Wolters Kluwer among the companies reporting before the bell.

Shares of Czech cybersecurity company Avast surged 42% after the UK’s competition regulator temporarily authorized its $8.6 billion sale to its US counterpart. Norton Live Look.

Focus on the data, not what Fed speakers say, says Art Hogan

Despite the “Fed Speakers Review,” that’s not what investors should focus on, according to Art Hogan, chief market strategist at B. Riley Financial.

“I think investors should pay more attention to what the data tells us than every single speaker at the Fed, whether they are voters or not, should be saying what our expectations should be,” Hogan told CNBC. Asia.”

However, he said that Fed officials were able to shift expectations of where Fed policy is heading.

Louis Federal Reserve President James Bullard said Tuesday that the central bank will need to keep raising interest rates, The federal funds rate will likely rise to 3.75%-4% by the end of 2022. Mary Daly, president of the Federal Reserve Bank of San Francisco, said that “our work is not done yet” on fighting inflation, While Chicago Fed President Charles Evans said another rate hike is possible, although he hopes to avoid it.

After last week’s meeting, some expected the Fed to continue rising to 3.25%-3.5% before pivoting in 2023, Hogan said.

“I think this week’s parade of Fed speakers has done a very good job of undoing that, and lowering those expectations,” he said.

– Abigail Ng

Jefferies says these stocks are poised to return if inflation peaks

There may be a slowdown on the horizon, and further earnings declines are expected in the future. If inflation peaks, as some analysts expect, Jefferies says, this combination of factors will favor one class of stock.

Jefferies has produced a screen of such stocks that investors can buy, based on a list of metrics that include high profitability, reasonable valuations and good cash flow. Professional subscribers can read the story here.

– Weezin Tan

PayPal soars on earnings and stock buyback announcement

PayPal shares rose more than 11% after hours. Payments company Beat analyst earnings and revenue estimates for the second quarter and issued optimistic guidance for the full year. PayPal also announced a $15 billion share buyback program.

Share buybacks provide a way for companies to increase their earnings per share and enhance the value of their shares, Especially while the market in all areas suffers from sharp drops in prices this year. The company started a $10 billion program four years ago.

Elliott Management said it has a $2 billion stake in the payments giant. PayPal announced that it has entered into an agreement to share information on value creation with the activist investor.

– Tanaya Michel

Despite Fed Talk About Fighting Inflation, ‘Easing Cycle’ Is Emerging, Says Jim Poulsen of Leuthold

Leuthold Group chief investment analyst Jim Poulsen said that despite the Fed’s “continuous rants toward fighting inflation” through monetary tightening, there are several factors that suggest the market may be entering an “emerging easing cycle”.

He said in a note to investors late Tuesday that bond yields have made a significant cut in interest rates, the dollar is finally rolling in and unwanted spreads have eased.

“The media, policy officials and investors are primarily focused on the fight against inflation and how aggressively the Fed will need to keep raising rates,” Paulsen said. “However, with real economic growth already falling to a crawl and evidence mounting that inflation is abating, the case for further Fed tightening at its September meeting is rapidly collapsing.”

“Investors should put appropriate weight on the pioneering nature of economic policies,” he added. “Tightening today means lower real and nominal growth tomorrow.”

– Tanaya Michel

MatchGroup shares falter after hours

Dating app operator shares Match group It fell by up to 23% after the company reported revenue of $795 million for Second Quarter, compared to FactSet’s estimate of $803.9 million. Match also issued weak guidance on income and adjusted operating income for the current quarter.

– Tanaya Michel