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Refinance demand surged 18% week to week but was still 75% lower than the same week one year ago.
Mortgage applications to purchase a home rose 3% for the week and were 37% lower than the same week one year ago.
The average loan size on a purchase application increased to $428,500 — the largest average since May 2022.

A ‘For Sale’ sign is posted in front of a single family home on October 27, 2022 in Hollywood, Florida.
Joe Raedle | Getty Images

Mortgage rates continued to fall last week, and both current homeowners and potential homebuyers reacted swiftly.
Total mortgage application volume, including refinances and loans to purchase a home, jumped 7.4% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 6.18% from 6.19%, with points falling to 0.64 from 0.65 (including the origination fee) for loans with a 20% down payment. That rate was 3.83% the same week one year ago.
With rates at the lowest level since early September, refinance demand surged 18% week to week but was still 75% lower than the same week one year ago. The refinance share of mortgage activity increased to 33.9% of total applications from 31.2% the previous week.
Mortgage applications to purchase a home rose 3% for the week and were 37% lower than the same week one year ago.
“Purchase activity that was put on hold last year due to the quick run-up in rates is gradually coming back as rates ease and housing demand remains strong, driven by supportive demographics and the ongoing strength in the job market,” said Joel Kan, an MBA economist.
Kan added that the average loan size on a purchase application increased to $428,500 — the largest average since May 2022.

“This increase is a sign that the recent upward trend in purchase activity remains skewed toward larger loan sizes and less first-time homebuyer activity, as entry level housing remains undersupplied, and buyers struggle with affordability in many markets,” said Kan.
Mortgage rates bounced back dramatically to start this week, after an unexpectedly strong employment report Friday and commentary Tuesday from Federal Reserve Chair Jerome Powell that the central bank could continue to raise interest rates.
“The reality is we’re going to react to the data,” Powell said. “So if we continue to get, for example, strong labor market reports or higher inflation reports, it may well be the case that we have do more and raise rates more than is priced in.”
The average rate on the 30-year fixed jumped nearly a half a percentage point from last Thursday to Tuesday, according to a separate survey by Mortgage News Daily.

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CNBC’s Jim Cramer on Tuesday said Activision Blizzard is better positioned in the short term than rival Take-Two Interactive.
Both video game companies reported quarterly earnings this week.

CNBC’s Jim Cramer on Tuesday said Activision Blizzard is better positioned in the short term than rival Take-Two Interactive.
Both video game companies reported earnings this week.

Activision Blizzard

Shares of Activision Blizzard rose about 5.6% Tuesday after the company reported a revenue beat in its most recent quarter. Cramer said that while all eyes are on the Federal Trade Commission’s antitrust case against Microsoft’s attempt to acquire the video game publisher, he believes that Activision Blizzard doesn’t need the acquisition to keep performing well.

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“I think Activision Blizzard is on fire right here. I almost hope the Microsoft merger falls apart as soon as possible, so that you’ll get a better buying opportunity,” he said.

Take-Two

Shares of Take-Two Interactive rose about 7.9% Tuesday, making a comeback after falling Monday on a quarterly revenue miss. Cramer noted that the company’s warning of shifting consumer behavior due to tough macroeconomic conditions was worrisome.

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But he predicted that the company, which produces the Grand Theft Auto and Red Dead Redemption series, will eventually release another smash hit that will lead to a comeback. 

“You have to believe in a turnaround to own this one. It might be a little early after this big run,” he said.

Disclaimer: Cramer’s Charitable Trust owns shares of Microsoft.

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Monday – Friday, 6:00 – 7:00 PM ET

It’s that time again! “Mad Money” host Jim Cramer rings the lightning round bell, which means he’s giving his answers to callers’ stock questions at rapid speed.

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Parker-Hannifin Corp: “It’s just the kind of industrial I’ve been recommending. … I would buy it here.”

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Conocophillips: “That thing is like a fine Merlot, my friend. I would buy all you can right here.”

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Snowflake Inc: “I like Snowflake. I will go with [CEO Frank] Slootman. He is a money maker.”

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Zscaler Inc: “The stock is all the way down. It can bounce.”

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TG Therapeutics Inc: “This is [run by CEO] Mike Weiss. I always believed in him. … Mike, come on the show. I think that you’ve got a winner, and I need to hear it from you.”
Disclaimer: Cramer’s Charitable Trust owns shares of Danaher.

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CNBC’s Jim Cramer on Tuesday told investors to stay selective with stocks despite the market’s strong run.
Stocks rose on Tuesday after Fed Chair Jerome Powell said the disinflationary process is in its early stages during a speech at The Economic Club of Washington, D.C.

CNBC’s Jim Cramer on Tuesday told investors to stay selective with stocks despite the market’s strong run.
“I just want you to have a real earnings cushion with real buybacks or real dividends — ideally both — and I can’t feel comfortable recommending anything without them,” he said.

The market rose on Tuesday after Fed Chair Jerome Powell said the disinflationary process is in its early stages during a speech at The Economic Club of Washington, D.C. Stocks initially dipped after Powell said that interest rates will need to remain high. 
“It’s insane that so many people seem to believe the Fed will go from slamming the brakes on the economy to hitting the gas within a matter of months,” Cramer said.
But he acknowledged that despite his belief that the market is in bull mode, investors shouldn’t get ahead of themselves by investing in untouchable tech names. Instead, investors should be looking to pick up shares in “rational, old-line companies,” he said.
“What matters here is that you understand the difference between hype and hope versus cold hard reality. I like the industrials like DuPont or Linde because they’re all about reality,” he said.
Disclaimer: Cramer’s Charitable Trust owns shares of Linde.

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Chipotle Mexican Grill reported weaker-than-expected earnings and revenue for its fourth quarter.
CEO Brian Niccol maintained the company hasn’t seen backlash to higher prices for its burrito bowls and tacos, despite declining transactions.
The company plans to open between 255 and 285 new locations in 2023 and said last month it is looking to hire 15,000 workers by this spring.

A Chipotle restaurant and signage is seen on February 09, 2022 in Miami, Florida.
Joe Raedle | Getty Images

Chipotle Mexican Grill on Tuesday reported weaker-than-expected quarterly earnings and revenue as it said customers pulled back on their restaurant spending.
“As we got around the holidays, we just didn’t see that pop, that momentum, that we normally see … frankly, we started the quarter soft, and we ended the quarter soft,” Chief Financial Officer Jack Hartung said on the company’s conference call, comparing the decline in December to weaker retail sales at that time.

CEO Brian Niccol maintained the company hasn’t seen backlash to higher prices for its burrito bowls and tacos, despite declining transactions for the second consecutive quarter. Executives blamed weak traffic in the fourth quarter on an underperforming limited-time menu item, tough comparisons to the previous year’s brisket launch and weather.

Restaurant traffic trends have reversed heading into the new year and through January, though, according to Niccol. Traffic last month grew year over year, he said. However, this time last year the company was reeling from a wave of Covid infections that caused some locations to shorten hours or temporarily close due to sick employees.
Chipotle shares fell roughly 5% in extended trading.
Here’s what the company reported for the fourth quarter, compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

Earnings per share: $8.29 adjusted vs. $8.90 expected
Revenue: $2.18 billion vs. $2.23 billion expected

It’s the first time since Chipotle’s third-quarter report in 2017 that the company has fallen short of Wall Street’s estimates for both quarterly earnings and revenue, according to Refinitiv data.

The burrito chain reported fourth-quarter net income of $223.7 million, or $8.02 per share, up from $133.5 million, or $4.69 per share, a year earlier. Higher menu prices helped offset rising food costs as the company paid more for dairy, tortillas, beans, rice and salsa during the period ended Dec. 31. Executives also said the company spent more in sick pay and medical claims than expected.
Excluding certain legal expenses, corporate restructuring costs and other items, Chipotle earned $8.29 per share.
The company’s same-store sales rose just 5.6%, falling short of StreetAccount estimates of 6.9% and coming in weaker than Chipotle’s own forecast from late October. The launch of the Garlic Guajillo Steak menu item during the quarter pushed customers to spend more, but didn’t attract more of them to order it, executives said.
The company said it’s projecting same-store sales growth in the high single digits for the first quarter of 2023, based on January same-store sales growth in the low double digits. Wall Street was anticipating first-quarter same-store sales of 6.7%, according to StreetAccount estimates.
Net sales climbed 11.2% to $2.18 billion for the fourth quarter. Digital sales represented more than a third of its total revenue. Menu prices were up 13.5% year over year.
The company plans to open between 255 and 285 new locations this year, including relocating 10 to 15 restaurants to add a drive-thru lane.
Executives did not provide an outlook for 2023 same-store sales growth, noting the possibility of a recession, but said that same-store sales will likely moderate in the second and third quarter. Last month, Chipotle said it is looking to hire 15,000 workers by this spring ahead of its busiest time of the year.
Finance chief Hartung said the company doesn’t plan a further rise in prices this year.

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Delta is raising pay for ground workers and flight attendants by 5% effective April 1.
The wage hikes come as travel rebounds and the labor market remains tight.
A labor union representing the airline industry’s flight attendants and cabin crews launched a campaign to organize Delta staff in 2019.

Nurphoto | Nurphoto | Getty Images

Delta Air Lines is raising employee pay 5%, the second time its lifted staff pay in less than a year as a sharp rebound in travel boosts the carrier’s profits and the U.S. labor market remains tight.
Delta raised employee pay 4% in May, the first increases since before the pandemic.

“Considering the depths of losses we suffered during the pandemic, including a $1 billion first quarter loss just last year, this is truly a remarkable achievement,” CEO Ed Bastian wrote in a staff note on Tuesday. “I’m confident that in the months and years ahead, our high-performance culture will take us to new heights, and that payout pool will continue to grow.”

Delta said the new raises go into effect April 1 and apply to ground workers and flight attendants. The Association of Flight Attendants-CWA started a unionization campaign of Delta’s cabin crew members in late 2019.
The pay hikes do not apply to Delta’s pilots, who are voting on a new contract proposal that includes 34% raises over four years. If ratified, the pilots would get 18% raises on the date of signing.
Delta posted a $1.32 billion profit last year, recovering from a record loss of more than $12 billion in 2020, during the depths of the pandemic.
Atlanta-based Delta is also planning to pay its staff more than $550 million in shared profits later this month, Bastian said Tuesday.

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Bed Bath & Beyond has so far failed to find buyers, prompting it to propose a stock offering that could infuse more than $1 billion into the company.
The cash-strapped, debt-laden home goods retailer will receive $225 million from the offering up front and $800 million over time, the company said.
Analysts described the move as a last ditch effort to save the company, which could still be liquidated if the deal doesn’t work out.

A Bed Bath & Beyond store in the Brooklyn borough of New York, US, on Monday, Feb. 6, 2023.
Stephanie Keith | Bloomberg | Getty Images

Bed Bath & Beyond will live to see another day – at least for now. 
The beleaguered home goods retailer has finalized a Hail Mary stock offering that’s expected to infuse more than $1 billion in equity into the company in hopes it’ll stave off bankruptcy and liquidation, the company announced Tuesday. 

Bed Bath brought in $225 million in the offering and expects to see another $800 million in proceeds over time, it said. 
The company also secured another $100 million loan from Sixth Street Partners, one of its lenders. B. Riley Securities was the sole bookrunner for the offering, Bed Bath said. 
Bed Bath’s stock fell more than 48% on Tuesday. Its market value is about $353 million.
The cash infusion will be used to pay some of the retailer’s debts after it defaulted on a loan with JPMorgan last month and missed a $25 million interest payment on Feb. 1, the company said in securities filings. 
Whatever’s left over will be used to aid Bed Bath’s attempt at a turnaround, the company said. However, it warned that if the deal doesn’t work out, it will “likely” file for bankruptcy and see its assets liquidated.

To keep costs low, Bed Bath wants to significantly reduce its brick and mortar footprint to 480 total stores – 360 with the Bed Bath banner and another 120 Buy Buy Baby stores, the company said in a news release.
The company said in a filing Monday that it would close an additional 150 Bed Bath stores. It had already shuttered 200 of its namesake stores and 50 of its Harmon Face Values locations. It had 955 stores open at one point earlier last year.
Bed Bath CEO Sue Grove touted the stock offering as a “transformative transaction” that gave the company the breathing room it needed to continue with its turnaround.
“This will enable us to better serve our customers, and grow profitably, by directing merchandise where and how they want to shop with us. We are also prioritizing availability of leading national and emerging direct-to-consumer brands our customers know and love,” Grove said.
Still, some analysts and experts believe bankruptcy remains inevitable.
The retailer has been desperate to stave off bankruptcy and has been seeking investors willing to inject cash into the company or buy it, CNBC has reported. The efforts have evidently failed thus far, forcing Bed Bath to go to the public markets for funding.
Investors are likely to be wary of buying Bed Bath’s volatile stock but they could find some interest from the “less rational meme stock crowd,” which might be willing to “take the bait,” said Neil Saunders, managing director at GlobalData. 
“In our view, this is a last roll of the dice from a company that is desperate to raise cash to provide some financial headroom to pay down debts and keep operations going,” said Saunders, a veteran retail analyst and consultant. 
“There is no guarantee that the offering will yield the desired results,” he said. “Many investors are likely to be deterred by the incredibly weak balance sheet, the mountain of debt, and a business that remains fundamentally broken.” 
– CNBC’s Lillian Rizzo contributed to this report.

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Hertz’s fourth-quarter adjusted earnings per share beat Wall Street’s expectations as cost improvements took hold.
Technology improvements helped reduce costs, CEO Stephen Scherr said, as did an ongoing effort to hire new employees to replace contractors.
The rental car giant saw year-over-year gains in business from corporate travelers, international travelers and ride-hailing drivers.

Andrew Kelly | Reuters

Rental car giant Hertz reported fourth-quarter earnings that were better than Wall Street expected, on renewed demand for travel as the Covid-19 pandemic eased in many parts of the world.
The company also benefited from improved operating performance, CEO Stephen Scherr told CNBC, helping to boost earnings even as revenue came in roughly in line with Wall Street’s upbeat expectations.

Here are the key numbers from Hertz’s fourth-quarter earnings report, compared with Refinitiv consensus estimates:

Adjusted earnings per share: 50 cents vs. 46 cents expected
Revenue: $2.035 billion vs. $2.033 billion expected

For the full year, Hertz reported adjusted earnings per share of $3.74 on revenue of $8.7 billion. That profit also beat estimates, as analysts polled by Refinitiv had expected earnings of $3.67 on revenue of $8.7 billion, on average.
As of the end of 2022, Hertz had $2.5 billion of total liquidity available, including $943 million in cash.
In an interview with CNBC, Scherr said cost reductions were an important part of the company’s fourth-quarter story. Technology improvements helped lower costs, he said, as did ongoing efforts to hire new employees to replace the contractors who Hertz brought in as demand surged last year.
The key story is that Hertz is making these incremental operating improvements as demand for travel recovers, Scherr said. Business from corporate travelers was up 31% in 2022 versus 2021, he said, and demand from international travelers – what Hertz calls “inbound travel” – rose 88% year over year.

Those trends continued in January, Scherr said, with corporate travel business up 28% from the same month in 2022 and inbound travel up 56%. Another increasingly important business segment – ongoing rentals to ride-hailing drivers – saw demand nearly double over last January’s levels.
Hertz didn’t provide detailed guidance for 2023. But Scherr said investors can expect further cost improvements as the year unfolds and revenue gains as Hertz continues to revitalize its Dollar and Thrifty rental car brands.
Shares of Hertz closed up over 7% on Tuesday.

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