Stock Futures Edge Lower Ahead Of Weekly Jobless Claims Data
U.S. stock futures are edging lower early Thursday as investors remain cautious over the general stock market sentiment. A lot of the attention today will be on the latest weekly jobless claims data, expected at 8.30 a.m. ET today. Economists polled by Dow Jones expect 335,000 Americans filed for unemployment last week, compared to the previous week’s 340,000. Investors’ optimism has also waned following a Federal Reserve report showing the U.S. economy slowed this summer.
“We’re slightly more cautious … It does feel that people are getting a bit freaked out by valuations. The Delta variant transmission is a threat for global growth. If you get tapering too soon, that risks derailing the recovery.”- Charles Hepworth, Investment director at GAM Investments.
Retailers such as Lululemon (NASDAQ: LULU) and Restoration Hardware (NYSE: RH) are surging in the pre-market trading this morning on the back of better-than-expected earnings. Meanwhile, Boston Beer (NYSE: SAM) took a breather after cutting its forecast due to slowing growth in its hard seltzer brand.” As of 6:50 a.m. ET, the Dow, S&P 500, and Nasdaq futures are down by 0.28%, 0.28%, and 0.20% respectively.
Lululemon Stock Poised For Record Follow Big Earnings Beat & Strong Outlook
Another company that reported a strong earnings report this week is Lululemon Athletica. The apparel maker reported its fiscal second-quarter results that topped Wall Street’s expectations on Wednesday. As such, the company’s stock is surging in pre-market trading today. For starters, its business had a growing momentum even before the pandemic.
Despite the gradual reopening of the economy, many are still seeking out stretchy pants and comfortable clothing. If anything, the shift toward so-called athleisure is benefiting retailers such as Lululemon. From its second quarter report, revenue came in 61% higher to $1.45 billion. That was ahead of expectations for $1.34 billion. That was despite some supply chain disruptions due to lockdowns affecting factories in Vietnam.
Impressive numbers aside, investors are also cheering on the better-than-expected outlook for the third quarter and fiscal 2021. In fact, based on its current projections, Lululemon is on track to surpass its 2023 revenue target by the end of this year, two years ahead of schedule. With a lot of new innovation in the pipeline, investors could expect a long growth runway for the company.
GameStop (GME) Stock Slide On Mixed Earnings Results
GameStop (NYSE: GME), the flagship name amongst meme stocks, was falling in the post market trading Wednesday. This came after the company reported a wider-than-expected net loss for the July quarter. From its quarterly report, the video game retailer saw an adjusted net loss of $0.76 a share and net sales of $1.18 billion. Typically, the fiscal second quarter is slowest for GameStop’s sales. But the company actually reported growth across its hardware, software and collectibles categories.
“While the gaming industry has not been as severely impacted by the COVID-19 pandemic as certain other consumer businesses, store closures during the stay-at-home orders in certain countries continue to adversely impact our results of operations during the six months ended July 31, 2021 … In light of our strengthened balance sheet, we project that we will have adequate liquidity for the next 12 months and the foreseeable future to maintain normal operations.“- GameStop said in a Securities & Exchange filing
It’s no secret that GameStop has been trying to shift its business more toward e-commerce. In an effort to beef up its online sales channels, the company announced it had entered into a lease of a new 530,000 square-foot fulfillment center in Reno, Nevada. It is working to expand its customer care service by leasing a center in Pembroke Pines, Florida. Sure, GME stock may be under pressure after missing estimates. But hey, let’s not forget that GME stock is predominantly driven by social media hype, rather than fundamentals. With the dip in GME stock after the earnings report, would it entice a bigger support from the Reddit crowd?
Sea (SE) Stock Dips After $6.28 Billion Offering Announcement
Sea Ltd. (NYSE: SE) is one of the best growth stocks in the stock market today. It is often compared to Alibaba(NYSE: BABA) or Amazon (NASDAQ: AMZN). but receives much less attention, even though it has easily outperformed them this year. The ecommerce and online gaming company backed by Tencent (OTCMKTS: TCEHY) is offering 11 million shares, a stake worth approximately $3.8 billion at Wednesday’s close. In addition, Sea intends to issue around $2.5 billion of equity-linked debt. Following this announcement, SE stock is trading lower in the post-market trading Wednesday.
This marks the largest equity offering of the year, a deal that will allow the company to push for expansion in other markets. Earlier this week, Sea’s Shopee announced that it is preparing to debut in Europe with a Poland launch. Now, with the fresh funding, the company aims to expand its e-commerce presence in Latin America. It also aims to build up its food delivery presence in Southeast Asia. For those unfamiliar, the company also owns hit gaming titles like Free Fire.
Additionally, Shopee tapped the India market in late August. It is another huge market with a fast-growing gross domestic product, and where Free Fire is a success. As an integrated platform consisting of digital entertainment, e-commerce and digital financial services, Sea provides critical services for the robust and increasingly vibrant Southeast Asia market. For those who are seeking to expand their portfolio beyond U.S. borders, you might want to take a closer look at SE stock as it takes a breather following the equity offering announcement.
Earnings To Note Today
Topping off all that, we also have several notable names reporting earnings today. Even as we approach the tail-end of this earnings season investor hype around potentially good quarters persists. On one hand, the likes of Academy Sports & Outdoors (NASDAQ: ASO), Lovesac (NASDAQ: LOVE), and Bioceres Crop Solutions (NASDAQ: BIOX) are posting results pre-market.
On the other hand, we have notable fintech and tech names like Affirm (NASDAQ: AFRM), Zscaler (NASDAQ: ZS), and Verint Systems (NASDAQ: VRNT) in the post-market earnings call group. Whether it’s reviewing jobs data or going through earnings reports, there’s enough to keep you busy in the stock market today.