January retail sales, due out this morning, are expected to show a slight decline from the previous month but continued strength as consumers drive U.S. economic growth. Cisco Systems (CSCO) shares were down after the computer hardware company late Wednesday announced weak guidance and job cuts, while chip equipment maker Applied Materials Inc. (AMAT) and crypto exchange platform Coinbase (COIN) are due to report after the closing bell. Here’s what investors need to know today.
1. Retail Sales Expected to Show Continued Strength
January’s U.S. retail sales data from the Census Bureau are expected to show a 0.1% decline by from the prior month, following December’s 0.6% gain. Still, early figures show that spending remains buoyant and a key economic driver, even if last month’s winter cold weighed on mall-shopping and higher interest rates dampened car-buying. According to a CNBC/National Retail Foundation report released Monday, core retail sales, which excludes volatile automobile, gasoline and restaurant sales, were 3.2% higher than the year-ago in January, beating December’s 2.4% yearly surge. Other indicators due today that will give signs of the health of the U.S. economy are weekly jobless claims and the homebuilder confidence index.
2. Cisco Falls on Cautious Guidance, Job Cuts
Cisco Systems (CSCO) shares were down more than 4% in pre-market trading after the computer-networking giant late Wednesday issued softer-than-expected current quarter guidance and said it plans to cut 5% of its global workforce, or around 4,250 positions. Cisco CEO Chuck Robbins said slowing corporate spending and an uncertain broader economy had prompted the cautious approach to the company’s outlook. Cisco’s job cuts are the latest in a string of tech layoffs this month alone, with Snap (SNAP), DocuSign (DOCU) and Maplebear Inc. (CART) among the others reducing headcount.
3. Buffett’s Berkshire Hathaway Trims Apple Stake
Warren Buffett’s Berkshire Hathaway Inc. (BRK.A, BRK.B) reportedly sold about 1% of its Apple (AAPL) shares in the final three months of 2023, leaving it with a 5.9% stake in the iPhone maker. Apple’s share price gains have lagged its tech peers, who have surged on the back of the investor frenzy for artificial intelligence stocks, with the company also dealing with challenges like a China sales slump and regulatory focus on its App store policies. Apple shares were down 0.7% in pre-market trading.
4. Coinbase Shares Jump Ahead of Q4 Results
Coinbase Global (COIN) shares were nearly 7% higher ahead of reporting fourth-quarter earnings after the market close. The results are expected to show a jump in revenue and bullish guidance amid gains in bitcoin (BTCUSD), which has surged above $52,000 this week. The biggest cryptocurrency exchange in the U.S. is expected to show a revenue of $811.3 million, a 29% increase over the year-ago period, according to data from Visible Alpha. Analysts also expect that Coinbase swung to a profit of 89 cents per share in the fourth quarter, compared with a loss of 83 cents a year earlier.
5. Applied Materials Likely to Show Earnings Decline
Applied Materials Inc. (AMAT), which also reports after the closing bell, is expected to show declines for its top and bottom lines. The maker of semiconductor-manufacturing equipment is set to report earnings per share of $1.92 per share for its fiscal first quarter 2024, down from $2.03 according to estimates from Visible Alpha. Revenue is set to fall to $6.50 from $6.74 billion. The company’s hardware is used in chips made by Intel (INTC) and Taiwan Semiconductor Manufacturing Company (TSM).