U.S. Stock Futures Edge Up
U.S. stock futures rose in overnight trading on Sunday, extending all-time highs. This came as Janet Yellen pushed for rapid U.S. stimulus bills. Meanwhile, novel coronavirus infection rates are seeing declining trends. All three U.S. major indexes finished the week in the green, with each posting its best week since November 2020.
“Risk sentiment brightened as anticipation over the U.S. stimulus package is growing,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co. “Although the scale of the U.S. package is likely to be reduced, the amount will be still substantial to bolster the U.S. economy.”
U.S. stock futures are moving higher along with Asian and European markets today. While we will have a busy week ahead, the battle between Wall Street and Reddit investors. Investors are also beginning to wonder if the stock market could rebound this week after last week’s heavy losses. The Dow, S&P 500, and Nasdaq 100 futures were all in the positive territory, moving 0.40% and 0.32% and 0.33% respectively at 7:54 a.m. ET.
“We are still very much in a bull market at the early stages of an economic recovery that’s gaining momentum,” Michael Wilson, chief U.S. equity strategist at Morgan Stanley, said in a note to clients Sunday. “We continue to recommend stocks with the most upside to an improving economic backdrop as the vaccines are distributed and normal activities resume.”
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Brent Crude Crossed $60 A Barrel
Brent oil prices rose by over 1% on Monday to their highest in just over a year as it crossed $60 a barrel. WTI crude also rose by a similar amount, reaching $57.53 a barrel at 7:55 a.m. ET. This came amid hopes of a quicker economic revival. Besides, supply curbs by producer group OPEC and its allies also pushed oil to its highest level it hasn’t seen in a while. On top of that, vaccines have been rolled out faster than what the market has expected and China’s oil demand continues to surge. But of course, relying alone on China isn’t sustainable in the long run. For the oil market to truly recover, the demand from elsewhere has to pick up.
“Crude oil rose to its highest level in a year on signs of strong demand in China. The number of vessels sailing toward China hit a six-month high of 127 on Friday, equivalent to approximately 250 million barrels,” ANZ analysts said in a Feb. 8 note. “This comes as stockpiles in China continue to fall.“
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Is Twitter About To Report Another $1 Billion Quarter?
Twitter (NYSE: TWTR) could be reporting another blowout quarter on Tuesday afternoon. Like many digital advertising companies, the platform has enjoyed strong growth in digital ad spending through the pandemic. Apart from its financial data, investors are likely to focus on numbers of its user and engagement metrics. For Twitter shares to take off, the company would need to show strong gains in its monetizable users.
Analysts are expecting $0.29 a share profit on sales of $1.18 billion from its upcoming quarterly report. Considering that the company reported a strong quarter, many are speculating that it will be another blowout quarter for Twitter, especially for the period when the U.S. concluded its presidential election and traffic on Twitter surged. Analysts appear to be expecting Twitter to grow its revenue by 18% in the fourth quarter. We will see if user engagement remains strong amid the political developments.
“Regardless of one’s opinion of the President or Twitter’s recent policy actions, we view Trump as a unique animating force for activity and engagement on the platform that will not be easily replaced,” Wells Fargo analyst Brian Fitzgerald wrote after the ban was announced.
Can Disney+ Sustain The Magic Kingdom?
Disney’s (NYSE: DIS) Thursday report kicks off a new fiscal year for the entertainment giant. Understandably, the company took some big hits as a result of the global pandemic in 2020. The entertainment powerhouse will likely showcase its ongoing growth in its streaming platform. In addition, there may be possible improvements in demand across its theme parks, film studios and cruise lines.
Disney’s progress with its Disney+ subscriber growth will certainly be an item of interest. The company has been signing up subscribers at a respectable speed by any measure. But some analysts would be keen to know the proportion of growth from its Hotstar service in India. That’s because the Hotstar service contributes a lower average revenue per user.
Disney+ has been a saviour for the entertainment giant. This is when other areas of the business were heavily battered by the coronavirus pandemic. The streaming platform boasted 86.2 million subscribers as of December 2. While impressive considering it has just been in operation for over a year, the numbers still pale in comparison to those of Netflix (NASDAQ: NFLX). Netflix reported nearly 204 million viewers as of the end of 2020.
Yet Another Week Of Earnings In Store
Last week was a busy week for Wall Street, and this week may be no different. The vast majority of companies that have reported their earnings so far have handily beaten expectations. Among the companies reporting earnings this week, two of the most closely watched companies are ride-hailing rivals Lyft (NASDAQ: LYFT) and Uber (NYSE: UBER).
“We see a confluence of positive factors giving Uber and Lyft tailwinds into 2021 with more investors coming back to the story with many of the dark clouds clearing (Prop 22, demand improving), and a greater focus on ‘reopening’ plays,” Wedbush analyst Dan Ives wrote in a note, referring to the California proposition that allowed both companies to continue classifying their drivers as contract rather than full-time workers.
There are also other notable names from other sectors. They include Coca-Cola (NYSE: KO), Toyota Motors (NYSE: TM), Cisco Inc. (NASDAQ: CSCO), General Motors (NYSE: GM) and Cloudflare (NYSE: NET). So, whether it is the stimulus bill progress, oil futures, or high-profile corporate earnings, there is enough to keep you busy this week.