U.S. stock index futures are lower on Wednesday on weak quarterly reports or forecasts from a number of big tech companies.
Shares of Alphabet Inc. (SPB: GOOG) and Microsoft Corp. (SPB: MSFT) shed 6.6% in pre-trading, while Texas Instruments (SPB: TXN) shed 4.7%.
Alphabet, Google’s holding company, saw its third-quarter 2022 revenue increase 6%, the slowest pace in two years, while its net income was down 27%. In addition, Google’s advertising revenue in the past quarter turned out to be worse than experts’ forecasts.
Microsoft recorded net profit and revenue better than analysts’ expectations in the first financial quarter ended September 30th. However, the company’s revenue forecast for the second financial quarter – $52.35-53.35 billion – turned out to be weaker than the market consensus forecast of $56.16 billion.
Texas Instruments gave a weak outlook for the current quarter, although its results in July-September exceeded analysts’ expectations.
“These companies’ reports are really important indicators of the advertising industry and a harbinger of the movement of goods and services in the economy,” said Fahad Kamal, chief investment officer of Kleinwort Hambros, quoted by Dow Jones.
Other tech companies due to release quarterly earnings this week include Meta (SPB: META) Platforms Inc. (recognized as an extremist organization in the Russian Federation and banned), Apple Inc. (SPB: AAPL), Intel Corp. (SPB: INTC) and Amazon.com Inc. (SPB: AMZN) Shares of these companies lost 4.3%, 1.1%, 1.2% and 3.6%, respectively, in early trading on Wednesday.
“We’re used to the tech sector performing strong quarter-on-quarter,” says FlowBank chief investment officer Esti Dweck. “There was hope that their financials would be another signal that the sector is still resilient.”
The value of Boeing Co. (SPB: BA) shed 0.8%. One of the world’s largest manufacturers of aviation, space and military equipment increased revenue in the third quarter by 4%, but the figure turned out to be almost $2 billion worse than the average market forecast. At the same time, Boeing’s free cash flow in July-September amounted to $2.9 billion, significantly exceeding the average analysts’ forecast of $1 billion.
The focus of traders on Wednesday – the data on sales of new buildings in the US in September, which will be released by the country’s Department of Commerce at 17:00 Moscow time.
Experts polled by Trading Economics, on average, expect sales to decline by 13.9% last month, to 585,000 homes.
The value of the December E-mini futures for the S&P 500 fell by 0.97% to 3832.75 points by 15:50 square meters on Wednesday. The quotation of the December E-mini futures on the Dow Jones index fell by this time by 0.36%, to 31,762 points. Futures on the Nasdaq 100 for December fell 1.97% to 11,483 points.
Quotes of futures for US stock indices are falling on Friday against the backdrop of continued growth in US Treasury yields, as well as unfavorable corporate news.
Rising interest rates, high inflation and a slowdown in global economic growth affect the financial results of companies. Earnings for the 88 S&P 500 companies that have released quarterly earnings so far are down an average of 2.6%, according to Refinitiv data.
At the same time, in the case of 75% of the reported companies, profits were higher than market forecasts, Market Watch notes.
Shares of Snap Inc. lose in price more than 28% during the preliminary trading on Friday. The company that owns the Snapchat app recorded the lowest revenue growth rate in its history in the third quarter of 2022. The indicator increased by less than 6% in annual terms, to $1.13 billion.
“Our revenue growth continued to slow in the third quarter, driven by a number of factors, including platform policy changes, macroeconomic challenges and increased competition,” Snap said in a statement.
Snap’s management noted that revenue was up about 9% at the start of the fourth quarter and declined to give guidance for the quarter as a whole.
Papers Twitter Inc. fell by 4.2% on the information of the Bloomberg agency that the administration of US President Joe Biden is discussing the possibility of checking some of Elon Musk’s businesses for compliance with the interests of state security.
We are talking about Musk’s SpaceX company, as well as Twitter, which is being bought by a billionaire, informed sources told the agency. According to them, the White House is concerned about Musk’s recent statements about a possible withdrawal of funding for the Starlink satellite communications system for Ukraine, as well as a series of tweets suggesting his ways to resolve the Russian-Ukrainian war.
American Express slipped 4.7% despite the fact that the company, which is one of the leaders in the US plastic card market, recorded net income and revenue in the past quarter above market expectations.
Schlumberger shares rose 1.1% in pre-trade. The American oilfield services company increased its net profit in the third quarter by 1.6 times, revenue – by 28%.
The December E-mini futures for the S&P 500 fell 0.78% to 3646.5 points by 3:55 pm on Friday. The quote of the December E-mini futures on the Dow Jones index fell by this time by 0.7%, to 30,140 points. Futures on the Nasdaq 100 for December fell 1.25% to 10952.25 points.
Quotes of futures for US stock indices are changing without a single dynamics on Thursday, traders are evaluating statistical data on the US labor market and a portion of corporate reports.
The number of Americans who applied for unemployment benefits for the first time fell by 12,000 last week to 214,000, according to a report from the US Department of Labor.
The previous week, the number of applications was 226 thousand, and not 228 thousand, as previously reported.
Analysts, on average, had expected the figure to rise to 230,000 from the previously announced level, according to Trading Economics. Bloomberg’s consensus forecast was for growth to 233,000.
Shares of Union Pacific Corp. cheaper by 3.5%. The American railroad operator posted adjusted earnings and revenue above analysts’ forecasts in the third quarter, but disappointed the market with a worsening outlook and a reduction in the buyback program this year.
Papers of ManpowerGroup Inc. lose 8.7%. The recruiting company posted a net profit increase in the third quarter, but its revenue fell more than market forecasts.
Share price of Philip Morris International rises 0.6%. The tobacco concern in the third quarter of 2022 reduced its net profit by 14%, but received revenue above the market forecast.
Shares of Blackstone Group Inc. add 1.4%. The world’s largest alternative investment manager posted a sharp drop in net income and revenue in the third quarter of 2022, but saw a surge in assets under management.
Paper American Airlines Group cheaper by 1.1%. The airline in the third quarter increased revenue by 13% compared to the same period pre-pandemic 2019, despite a reduction in transportation capacity by 9.6%.
AT&T Inc stock quotes. grow by 3.2%. The American telecommunications company increased its net profit in the third quarter of 2022 by 26%, while revenue decreased by 4%.
The value of the December E-mini futures on the Dow Jones index by 15:39 qoq increased by 0.3% and amounted to 30,552 points. Quotation of the December E-mini futures on the S&P 500 index increased by this time by 0.1%, to 3711 points. Futures on the Nasdaq 100 index for December lost 0.07% and amounted to 11,145 points.
Futures for US stock indices are actively rising on Monday, signaling that the US stock market may start the week on a positive note, winning back the fall on Friday.
Investors are analyzing the latest financial statements of the largest Wall Street banks.
Bank of America Corp. in the third quarter increased revenue by 7.5%, which was better than analysts’ expectations. BofA shares are up 2.8%.
Bank of New York Mellon (SPB: BK), the world’s largest custodian bank, sharply cut its net income in July-September, with an adjusted per-share figure that beat analysts’ expectations. Paper BNY Mellon rise in price by 4.7%.
On Friday, JPMorgan Chase & Co also released its third-quarter financials. (SPB: JPM), Citigroup Inc. (SPB: C), Wells Fargo & Co. (SPB: WFC) and Morgan Stanley (SPB: MS).
JPMorgan and Citigroup delivered higher-than-market revenue and adjusted earnings, while Wells Fargo increased revenue by 4% and Morgan Stanley cut it by 12%.
The market capitalization of oil producer Continental Resources (SPB:CLR) jumped 8.2% in pre-trading. Company founder Harold Hamm has announced that he will buy all outstanding shares of Continental Resources through his Omega Acquisition Inc.
Shares of Archaea Energy Inc., one of the largest producers of renewable natural gas in the United States, jumped 1.5 times after the announcement that it was being bought by the British BP Plc (SPB:BP).
The cost of the manufacturer of diagnostic medical equipment PerkinElmer Inc. (SPB: PKI) does not change during pre-bidding. The company said it expects higher-than-expected third-quarter adjusted earnings, with revenue close to the upper forecast range.
Meanwhile, the Empire Manufacturing Index, calculated by the New York Fed, fell to minus 9.1 in October from minus 1.5 a month earlier, indicating a further decline in business activity in New York State. The indicator turned out to be negative for the third month in a row. Analysts had expected it at minus 4 points, writes Trading Economics.
Quotations of December futures for the Standard & Poor’s 500 index rose by 1.37% to 3646 points by 15:50 square meters, for the Dow Jones index – by 1.05%, to 30021 points. The price of contracts for December on the Nasdaq 100 index by this time increased by 1.73% – up to 10929.5 points.
Quotes of futures for US stock indices began to decline sharply on Thursday after data from the US Department of Labor indicated only a slight slowdown in inflation in the United States.
Consumer prices (CPI index) in the US in the past month rose by 8.2% in annual terms, according to data from the country’s Department of Labor.
Thus, inflation in September slowed to a seven-month low compared to 8.3% in August, but was higher than the 8.1% expected by analysts polled by Bloomberg.
Meanwhile, the number of Americans who applied for unemployment benefits for the first time increased by 9 thousand last week and amounted to 228 thousand people, updating the maximum in a month and a half. Analysts on average had expected the figure to rise to 225K, according to Trading Economics.
In addition, investors are evaluating the quarterly reports of large companies, which mostly turned out to be better than Wall Street’s expectations.
Shares of Walgreens Boots Alliance are up 1.1%. The pharmacy chain recorded a decrease in revenue in the fourth financial quarter, but the figure exceeded analysts’ expectations.
Delta Air Lines is up 1.8%. One of the largest airlines in the United States in the third quarter received revenue that was better than the same period before the pandemic in 2019 and the market forecast.
Domino’s Pizza Inc stock quotes jumped 6.5%. The American chain of pizza restaurants in the third quarter of fiscal 2022 decreased net profit, but the revenue figure exceeded consensus forecasts.
The market value of BlackRock falls by 2.7%. The world’s largest company in terms of assets under management reduced its net profit in the third quarter by 16.4%, although the adjusted figure and revenue were better than experts’ expectations.
Capitalization of Applied Materials Inc. declined 4.3% after one of the world’s largest chip manufacturing equipment manufacturers downgraded its fiscal fourth quarter revenue guidance due to US trade restrictions blocking shipments of high-tech semiconductor components and manufacturing equipment to China.
The value of the December futures E-mini on the Dow Jones index by 15:35 CSK fell by 1.36% and amounted to 28864 points. The quotation of the December E-mini futures on the S&P 500 fell by this time by 1.82%, to 3523.25 points. Futures on the Nasdaq 100 for December fell 2.81% to 10,535.75 points.
Prior to the release of inflation data, all three futures were up more than 1%.
Quotes of futures for US stock indices do not show a single dynamics at the auction on Tuesday.
The US stock market has declined in the previous four sessions, and risk appetite remains low due to investors’ fears that the Federal Reserve’s (Fed’s) rapid tightening of monetary policy will dampen economic activity and corporate profits, Market Watch notes.
CEO of JPMorgan Chase & Co. Jamie Dimon said the day before that the S&P 500 index could fall by another 20% amid the ongoing tightening of monetary policy by the Fed. This year, the stock indicator has already lost 24%.
Dimon warned that the US economy could fall into recession in the next six to nine months.
Yields on two-year US Treasuries, which are sensitive to a hike in the base rate, rose above 4.3% on Tuesday, close to the maximum since 2007. The interest rate on ten-year US Treasury bonds rose during trading above the 4% mark.
“The 10-year US Treasuries are back above 4% and we expect the pressure on the US stock market to continue,” said Peter Garnry, head of equity strategy at Saxo Bank A/S. profits and cause disappointment in the prospects of the companies.”
S&P 500 companies’ third-quarter combined earnings are up 4.5% year-over-year, according to Refinitiv’s forecast. Profits of energy companies are expected to have grown by 6.3%, banks – have decreased by 1.6%.
Citigroup Inc., JPMorgan, Morgan Stanley and Wells Fargo & Co. will release quarterly results this week. Bank shares lost 0.2%, 0.4%, 0.3% and 0.5% respectively in early trading on Tuesday.
American Airlines Group Inc. rose by 4.3%. The airline improved its forecasts for revenue and revenue per marginal passenger turnover in the third quarter.
Shares of Delta Air Lines Inc. add 2.8% to the price. The airline said Tuesday it is investing $60 million in flying taxi developer Joby Aviation Inc. and intends to use air taxis to deliver passengers to airports in the future, bypassing traffic jams in New York and Los Angeles.
Joby shares rose 18%.
The value of the December E-mini futures for the S&P 500 fell by 0.1% to 3621.75 points by 15:50 Moscow time on Tuesday. Quotation of the December E-mini futures on the Dow Jones index increased by this time by 0.02%, to 29266 points. Futures on the Nasdaq 100 for December fell 0.14% to 10969.5 points.
