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Markets Higher Ahead of the Fed; Q1 Beats for AMD, ABNB & More
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Don’t look now, but the major market indices are putting together a winning streak. Sure, it’s only two days; we’ve been here recently and still found our way into the red by week’s end. But with the Fed decision on a 50 bps rate hike plus the start of draining the $9 trillion from the Fed’s balance sheet imminent, markets seemed to sell way off in order to make room for a spring-loaded post-Fed rally tomorrow. Based on the markets’ actions this week so far, some are betting on this already.
The Dow was +0.20%, the S&P 500 +0.48%, the Nasdaq +0.22% and the small-cap Russell 2000 +0.87% on the day. While encouraging, especially on the heels of Monday’s late spike into the close, there is still a long way to go to approach March levels. The Nasdaq alone is still -13% in the past month. Even a spring-loaded post-Fed rally is unlikely to take that big a chunk of cheese.
JOLTS results for March came out earlier today, with 11.5 million job openings still lingering — higher than the 11.2 million expected. Job Quits were also higher than expected: 4.5 million versus 4.4 million anticipated. While job growth has been robust over the past year-plus, we continue to see more labor force demand than capacity. Or perhaps wages will need to grow higher still on the lower end of the spectrum to make up the difference.
Factory Orders performed well in March: +2.2% — more than double expectations, and well beyond the upwardly revised +0.1% for February. Although its scope is relatively finite, all of these figures suggests a much stronger level of productivity in the first quarter of the year than previously supposed. It would be nice to think orders can grow from here, but this is a volatile figure month by month. Averaged out of the trailing 12 months, these orders are at +1.1%.
Advanced Micro Devices (AMD - Free Report) put up another impressive Q1 Tuesday afternoon, with earnings of $1.13 per share leaving the expected 91 cents in the dust, and more than doubling the year-ago quarter’s 52 cents per share. Revenues of $5.89 billion were also well out ahead of the $5.00 billion expected. Even better, AMD seriously ratcheted up revenue guidance for Q2 to $6.5 billion.
This is the first quarter for the chip-making giant to include synergies from its Xilinx acquisition, which was closed earlier in the quarter. In its conference call, AMD will likely field questions regarding gaming trends beginning to slow that we’ve seen elsewhere. But these numbers are hard to argue with: AMD continues to succeed even in a more challenging sector. Shares are up +4% in late trading, but still -39% year to date.
Starbucks (SBUX - Free Report) reported a mixed fiscal Q2 after the close, missing on earnings by a penny to 59 cents per share while outperforming on quarterly sales: $7.64 billion versus $7.61 billion expected. Same-store sales were +12% in the Americas, but a -23% drag in China (based on significant Covid restrictions continuing) brought International comps -8% in the quarter. Former-now-present CEO Howard Schultz is likely to be on the conference call, where Starbucks will provide some future guidance.
Airbnb (ABNB - Free Report) performed much better than expected on its bottom line in the quarter: -$0.03 cents per share versus expectations for -$0.28, and mercifully off those horror-show lows of -$1.75 per share a year ago. Revenues of $1.51 billion also stepped past the $1.45 billion in the Zacks consensus. Its Average Daily Rate came in at $168 per night, +37% over 2019, the last reasonably comparable year. Bookings outperformed to 102.1 million versus 100.9 million expected. Shares popped +6% on the news initially.
Lyft (LYFT - Free Report) swung to a positive 7 cents per share from an expected loss of -7 cents, with sales of $876 million in the quarter easily surpassing the $842.2 million expected. Although Active Riders missed expectations by a tad to 17.8 million, revenues per user rose to $49.18 from $47.07, a reflection of higher pricing hitting the ride-share market.
Yet Lyft lowered revenue guidance for the current quarter, and now guides adjusted EBITDA to come down drastically -- to $10-20 million from $84 million expected. Continued investment in driver supply (perhaps making up some of that JOLTS data we just saw) is keeping costs higher for the ride-share company. Uber (UBER - Free Report) reports tomorrow. Questions or comments about this article and/or its author? Click here>>
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Markets Higher Ahead of the Fed; Q1 Beats for AMD, ABNB & More
Don’t look now, but the major market indices are putting together a winning streak. Sure, it’s only two days; we’ve been here recently and still found our way into the red by week’s end. But with the Fed decision on a 50 bps rate hike plus the start of draining the $9 trillion from the Fed’s balance sheet imminent, markets seemed to sell way off in order to make room for a spring-loaded post-Fed rally tomorrow. Based on the markets’ actions this week so far, some are betting on this already.
The Dow was +0.20%, the S&P 500 +0.48%, the Nasdaq +0.22% and the small-cap Russell 2000 +0.87% on the day. While encouraging, especially on the heels of Monday’s late spike into the close, there is still a long way to go to approach March levels. The Nasdaq alone is still -13% in the past month. Even a spring-loaded post-Fed rally is unlikely to take that big a chunk of cheese.
JOLTS results for March came out earlier today, with 11.5 million job openings still lingering — higher than the 11.2 million expected. Job Quits were also higher than expected: 4.5 million versus 4.4 million anticipated. While job growth has been robust over the past year-plus, we continue to see more labor force demand than capacity. Or perhaps wages will need to grow higher still on the lower end of the spectrum to make up the difference.
Factory Orders performed well in March: +2.2% — more than double expectations, and well beyond the upwardly revised +0.1% for February. Although its scope is relatively finite, all of these figures suggests a much stronger level of productivity in the first quarter of the year than previously supposed. It would be nice to think orders can grow from here, but this is a volatile figure month by month. Averaged out of the trailing 12 months, these orders are at +1.1%.
Advanced Micro Devices (AMD - Free Report) put up another impressive Q1 Tuesday afternoon, with earnings of $1.13 per share leaving the expected 91 cents in the dust, and more than doubling the year-ago quarter’s 52 cents per share. Revenues of $5.89 billion were also well out ahead of the $5.00 billion expected. Even better, AMD seriously ratcheted up revenue guidance for Q2 to $6.5 billion.
This is the first quarter for the chip-making giant to include synergies from its Xilinx acquisition, which was closed earlier in the quarter. In its conference call, AMD will likely field questions regarding gaming trends beginning to slow that we’ve seen elsewhere. But these numbers are hard to argue with: AMD continues to succeed even in a more challenging sector. Shares are up +4% in late trading, but still -39% year to date.
Starbucks (SBUX - Free Report) reported a mixed fiscal Q2 after the close, missing on earnings by a penny to 59 cents per share while outperforming on quarterly sales: $7.64 billion versus $7.61 billion expected. Same-store sales were +12% in the Americas, but a -23% drag in China (based on significant Covid restrictions continuing) brought International comps -8% in the quarter. Former-now-present CEO Howard Schultz is likely to be on the conference call, where Starbucks will provide some future guidance.
Airbnb (ABNB - Free Report) performed much better than expected on its bottom line in the quarter: -$0.03 cents per share versus expectations for -$0.28, and mercifully off those horror-show lows of -$1.75 per share a year ago. Revenues of $1.51 billion also stepped past the $1.45 billion in the Zacks consensus. Its Average Daily Rate came in at $168 per night, +37% over 2019, the last reasonably comparable year. Bookings outperformed to 102.1 million versus 100.9 million expected. Shares popped +6% on the news initially.
Lyft (LYFT - Free Report) swung to a positive 7 cents per share from an expected loss of -7 cents, with sales of $876 million in the quarter easily surpassing the $842.2 million expected. Although Active Riders missed expectations by a tad to 17.8 million, revenues per user rose to $49.18 from $47.07, a reflection of higher pricing hitting the ride-share market.
Yet Lyft lowered revenue guidance for the current quarter, and now guides adjusted EBITDA to come down drastically -- to $10-20 million from $84 million expected. Continued investment in driver supply (perhaps making up some of that JOLTS data we just saw) is keeping costs higher for the ride-share company. Uber (UBER - Free Report) reports tomorrow.
Questions or comments about this article and/or its author? Click here>>