June Housing Data, IBM Earnings, and More!

Tuesday Morning Rebel Brief

Good morning Rebels! After yesterday’s whipsaw price action (due in part to news that Apple (AAPL) is now slowing its hiring), the market is looking yet again to start off on a positive note. The SPY, QQQ, and IWM ETFs are trading higher by nearly a percent in the premarket, with the Dow Jones trailing not far behind. This, as the market prepares for Netflix’s earnings release tonight, where it expects to lose 2 million subscribers. Still, if recent price action is a strong indicator, the stock market can discount anything if the mood is right. 

June Housing Data is In

Housing Starts: -2% vs +1.4% expected

Building Permits: -0.6% vs 2.7% expected 

Single Family Housing Permits: -8%, -11% year-over-year

This is the lowest reading since February of 2021. Why? A lot of people are dropping out of deals due to rising interest rates and tight supply issues, ultimately dimming the outlook. The biggest homebuilding companies have taken note.

Monday’s Builder Survey showed a 12 point drop in positive sentiment — the largest in the history of the survey, forcing many of the biggest home builders to cut prices.

However, it’s important to remember that this is part of the Fed’s goal. If demand is too hot, inflation will continue to rise. If demand sours just the right amount to force prices lower across the board without being suppressed so far that the economy falls into a recession, that would be the definition of the Fed achieving it’s goals of a “soft landing”. A soft landing is an event that is becoming more and more probable according to Anastasia Amoroso’s iCapital.

IBM Earnings Result: Top and Bottom Line Beat

IBM Earnings Per Share: Beat, $2.31 adjusted vs $2.27 expected

IBM Revenue: Beat, $15.54B vs $15.18B expected

IBM’s revenue is higher 9% year-over-year (an important note given current economic headwinds). However, IBM lowered its guidance for 2022 free cash flow from $10B-$10.5B to $10B, citing the strong dollar. IBM is trading lower by more than 6% in the premarket, with the share price falling to $129.90 at the time of writing.

Halliburton Earnings Result: Top and Bottom Line Beat

HAL Earnings Per Share: Beat, $0.49 vs $0.45 expected

HAL Revenue: Beat, $5.07B vs $4.71B expected

Shares of Halliburton are on the move this morning on the back of a massive 41% rise in profit year-over-year due to an equally large increase in demand for oil drilling. The stock is higher by 2% in the premarket, near its average earnings move of 2.2% — dragging much of the energy sector higher along with it.

Hasbro Earnings Result: Earnings Per Share Beat, Revenue Miss

HAS Earnings Per Share: Beat, $1.15 adjusted vs $0.94 expected

HAS Revenue: Miss, $1.34B vs $1.37B expected

Despite a slight revenue miss, shares in Hasbro are trading higher this morning on the back of strong demand and increasing prices in staple products like its Magic: The Gathering brand. Adjusted operating margins are also up from 16% to 18%, due in part to low production costs and rising prices in the toy sector.

Shares of HAS are trading higher by 1.01% in the premarket. 

More Brief Market News:

China’s portfolio of US debt has fallen below $1 trillion for the first time since May 2010.

Russian state-owned gas provider Gazprom said Monday that it will not comply with European Gas contracts. Essentially, Russia is threatening to reduce gas exports to Europe.

Netflix will report earnings tonight, and has said it expects to lose 2 million subscribers this quarter.

Later in the week, Tesla, United Airlines, American Airlines, Snap, Twitter and Verizon will release their quarterly earnings.

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For more quick takes on this morning’s market-moving news, check out 60 Seconds With Jon Najarian!