Stock Futures Edged Lower Ahead Of Unemployment Data

During Thursday’s premarket session U.S. stock futures are taking a breather ahead of an update of the unemployment numbers. Investors are keeping an eye on the weekly jobless claims data, which will be available at 8.30 a.m. ET today. New weekly unemployment claims are expected to post a fourth straight weekly decline, bringing the level of weekly filings closer to pre-pandemic levels. 

Certainly, the possible improvement in the labor market is an encouraging sign for the economy. But, the possibility of the Fed tapering its stimulus this year is unnerving some investors. “With a growing number of officials now openly discussing the possibility of tapering beginning soon on the back of July’s strong employment report, it looks more likely than not that the wind-down will begin later this year, rather than early next year as we had previously thought,” Andrew Hunter, senior U.S. economist for Capital Economics.

The possibility of the Fed beginning to taper bond purchases this year coupled with the ongoing uncertainties brought by the Delta variant may be causing some investors to take a more cautious approach. Also, China’s uncertain regulatory environment continues to cast a show on its tech titans. As of 7:02 a.m. ET, the Dow, S&P 500, and Nasdaq futures are pointing to further selling in the stock market today, moving 0.82%, 0.73%, and 0.56% lower respectively.

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Nvidia Earnings Top Estimates On Strength Of Gaming & Data Center Business

Semiconductor manufacturer Nvidia (NASDAQ: NVDA) reported its second-quarter results late Wednesday that topped consensus estimates. Revenue came in 68% higher year-over-year to $6.51 billion. It was also up 15% from the previous quarter. The graphics-chip maker revenue growth was driven by record quarterly revenue in its gaming and data center business.

Despite constraints, we see gaming leading fiscal Q2 growth with continued momentum into the second half led by new gaming titles, back-to-school, and holiday,”… “Data center demand accelerates into the second half with hyperscale spending and it increasingly favors Al neural network workloads/services.”- Schafer wrote in an analyst note ahead of Nvidia’s earnings

What’s more impressive is that Nvidia also beat Wall Street’s predictions on its gross margin. The company reported a gross margin of 66.7% for the quarter. Despite the global chip shortage, executives predicted the company would hit its growth targets for the coming quarters, and into its next fiscal year. From the earnings report yesterday, Nvidia once again proved that its long-term secular growth story remains intact. Given the upbeat earnings and strong outlook for the fiscal year, is NVDA stock a top semiconductor stock to buy in the stock market now?

NVDA stock chart
Source: TD Ameritrade TOS

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Farfetch Earnings On Tap After The Closing Bell Today

Luxury e-marketplace Farfetch (NYSE: FTCH) is scheduled to announce its second-quarter earnings after the market closes today. For those who are not so into fashion, the London-based company specializes in selling high-end, expensive clothes on the internet. And in this aspect, Farfetch is emerging as the leading pioneer in this niche of e-commerce. Part of the reason it has been so successful is due to its asset-light model. The company doesn’t have its own inventory. So, the question is, why do thousands of companies choose to work with Farfetch?

For starters, the platform generates 10 million visits per month. What’s more, it ships items to 190 different countries. Essentially, partnering with Farfetch puts your products in front of a massive customer base. After all, many businesses had to shut down their physical stores during the pandemic. Thus, it made perfect sense for them to ramp up sales via Farfetch to stay afloat, and Farfetch delivered.

The pandemic has served as an impetus for the luxury segment to shift online. Many are bullish on FTCH stock after the company entered into a significant partnership with Alibaba (NYSE: BABA) this fall. From its impressive first-quarter result and recent partnership with Alibaba, it’s highly likely that the strong momentum could persist. I would be curious to see how the second quarter panned out for Farfetch. And if you are into fashion, would you agree that Farfetch is a great stock to play on the luxury clothing market?

FTCH stock
Source: TD Ameritrade TOS

Robinhood’s Revenue Doubles In First Earnings Report, But Warns Trading Is Slowing

Robinhood Markets (NASDAQ: HOOD) is known for pioneering commission-free trades of stocks and exchange-traded funds. Most investors today know of Robinhood. That came as it helped fuel a frenzy that drove up prices of GameStop (NYSE: GME) and AMC Entertainment (NYSE: AMC) earlier this year. Robinhood reported strong revenue growth in its first earnings report as a public company after the closing bell on Wednesday.

HOOD stock

From its earnings report, revenue came in 131.5% higher year over year to $565 million, bolstered by an uptick in crypto trading. Rather astonishingly, it is Dogecoin that brought in the most revenue, accounting for 26% of the company’s revenue in the quarter. While the numbers reported were impressive, HOOD stock dove in the after-hours trading Wednesday. This came after the company warned of a slowdown in activity that would hit revenues in the current quarter. 

For the three months ended September 30, 2021, we expect seasonal headwinds and lower trading activity across the industry to result in lower revenues and considerably fewer new funded accounts than in the prior quarter,” the company said in the earnings release.

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Other Earnings To Keep An Eye On Today

The stock market as a whole came under pressure on Wednesday on the back of Fed’s July meeting minutes. That has certainly put some pressure on stocks as the Fed may begin tapering its stimulus this year. To add, some of the notable companies which reported earnings after the closing bell on Wednesday fell short of expectations. For instance, shares of Cisco Systems (NASDAQ: CSCO) fell after its sale and profit guidance disappointed against Wall Street’s expectations. Meanwhile, Robinhood stock is also down after the company hints of a possible slowdown in third-quarter trading.

Some of the companies reporting earnings before today’s opening bell include Macy’s (NYSE: M), Kohl’s (NYSE: KSS), and Bilibili (NASDAQ: BILI). Alternatively, if you are looking to get in on earnings action after the closing bell, some of the notable names reporting including Applied Materials (NASDAQ: AMAT), Farfetch, and Ross Stores (NASDAQ: ROST) are hosting their second-quarter calls. Evidently, there is still plenty to consider as the earnings week winds down.

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