Key Takeaways
- Starbucks Faces Challenges, Withdrawing Guidance After Three Straight Quarterly Declines
- Texas Instruments Rises, Despite Weaker Guidance, Due To Strong Chip Demand
- McDonald’s Drops Amid E. Coli Outbreak Linked To Tainted Onions
Stocks were little changed on Tuesday as we wait for some of the more well-known names to begin reporting earnings. The S&P 500 lost 0.5% while the Nasdaq Composite gained 0.2%. Small cap stocks fell 0.3% and the Dow Jones Industrial Average was nearly unchanged. As we await the heart of earnings season, some news overnight might get the ball rolling.
Starbucks withdrew its full year sales guidance after announcing same-store sales for the quarter ended September 29th fell 6%. That marked three consecutive quarters of declines. New CEO Brian Niccol said the company needs to make fundamental changes to its business. In premarket trading, shares of Starbucks are down 5%.
Shares of Texas Instruments are up 3% after beating on third quarter earnings. Guidance for the fourth quarter was below estimates; however, the company said they are seeing strength in demand for their analog chip. In somewhat related news, Arm Holdings is canceling a licensing deal that allowed Qualcomm to use Arm architecture for making chips. Shares of Qualcomm are down over 3.5% in premarket while shares of Arm are down nearly the same.
A couple companies which reported earnings this morning are Boeing and Coca-Cola. Boeing earnings were in line with what had been preannounced last week and that stock is little changed in premarket. However, later today, members of Boeing’s machinist union will vote on a new contract offer that includes a 35% wage hike over four years. I’ll be watching this because the vote comes at a time where it’s hard to imagine things getting much worse for the company. Finally, shares of Coca-Cola are lower by 1% in premarket after the company beat on earning and affirmed guidance.
Some other stocks making news this morning include McDonald’s. Shares are trading lower by 7% in premarket following an E. Coli breakout. Onions in the company’s Quarter Pounder at some locations were tainted, causing a number of people to become sick. Spirit Airlines and Frontier Airlines are again discussing a potential merger. Spirit is facing possible bankruptcy after a prior merger with JetBlue failed to materialize. Shares of Spirit are trading higher in the premarket. Lastly, Amazon is out with news this morning that they will be offering Prime members a $0.10 discount on gasoline purchased at BP stations. The company will also offer reduced fees for Electric Vehicle (EV) charging stations at BP.
For today, I’m going to be watching how traders prepare for Tesla earnings which are scheduled to come out after the close. The key figure I’ll be interested in hearing is their margins. After unveiling its robotaxi earlier this month and having signaled a bit of a shift toward lower priced vehicles, especially in China, the company’s margins are likely to be the key metric this quarter. I’m also watching the situation in Russia where 3,000 North Korean troops have been sent for training, according to The Wall Street Journal. I’m mainly interested in any reaction we see to this in overall market volatility. As always, I would stick with your investing plans and long-term objectives.
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