Stock Market Futures Are Flat As Stocks Cool From Tuesday’s Rally
U.S. stock futures are moving sideways going into Wednesday’s trading session this week. Overall, this seems to be part of the ongoing volatility investors continue to see in the stock market now. Following yesterday’s rebound rally, this is not too surprising. After all, even as earnings continue to roll in, there is no clear indication of how companies will perform this quarter. On one hand, you have the likes of oil giant Halliburton (NYSE: HAL) posting solid gains yesterday. In detail, the company’s net income for the quarter is up by a whopping 54.7% year-over-year.
On the other hand, however, banks such as JPMorgan (NYSE: JPM) reported less-than-ideal figures just last week. The leading investment banking firm reported losses of $524 million from market dislocations stemming from Russia sanctions. On top of that, JPMorgan also saw its quarterly profit slump by 42% year-over-year. Looking ahead, the bank is currently anticipating “significant geopolitical and economic challenges ahead,” due to surging inflation. While not all companies are made equal, nor do they operate in the same space, volatility remains rampant.
Speaking on all of this is Interactive Broker’s (NASDAQ: IBKR) chief strategist Steve Sosnick. He notes that yesterday’s gains are arguably volatility in the “right direction,” Sosnick continues by saying, “But we’re going to have to get used to bigger moves in both directions. And not only single-day moves, but sort of multi-day runs.” Because of all this, investors could likely be keeping a close eye on markets in the weeks to come. As of 6:04 a.m. ET, the Dow futures are rising by 0.01%. Meanwhile, the S&P 500 and Nasdaq futures are trading lower by 0.07% and 0.21% respectively.
Netflix And No Chill: Dwindling Subscriber Count Sends NFLX Stock Diving
For starters, Netflix (NASDAQ: NFLX) is front and center in today’s stock market news cycle. By and large, this would be the case following Netflix’s latest quarterly financial update. In it, the streaming industry titan posted earnings of $3.53 per share on revenue of $7.87 billion. For reference, this would be in comparison to Wall Street’s expectations of $2.89 and $7.93 billion respectively. At face value, these results appear to be solid overall. Despite all this, investors are likely focusing on Netflix’s latest update on its total subscriber count.
Diving right in, Netflix lost 200,000 subscribers during the first fiscal quarter. This would mark the company’s first decline in paying users since October 2011. Moreover, the company also expects this number to increase ten-fold to 2 million lost global paying subscribers in the current quarter. Providing more insight into the current state of the business is Netflix. The company writes, “Streaming is winning over linear, as we predicted, and Netflix titles are very popular globally. However, our relatively high household penetration — when including the large number of households sharing accounts — combined with competition, is creating revenue growth headwinds.” On this front, the company is planning to crack down on password-sharing households with additional fees.
Additionally, Netflix is also considering more accessible subscription plans as well. This would be in the form of more affordable ad-supported plans. According to CEO Reed Hastings, the company supports “consumer choice, and allowing consumers who would like to have a lower price and are advertising-tolerant.” Nevertheless, NFLX stock will likely be in the limelight today.
Tesla Earnings Preview: Things To Consider
Tesla (NASDAQ: TSLA) will likely be the focus of investors eyeing the top stock market earnings for today. For the most part, this leading electric vehicle (EV) firm already boasts a major presence both in and out of the stock market. However, it is important to note that the company is moving forward from a rather solid year in terms of performance. Going into the current fiscal year, Tesla, like many other businesses, continues to face growing supply chain pressures and inflation.
Regardless, here is what Wall Street is expecting for the company’s upcoming earnings call. In detail, current forecasts point towards earnings of $2.31 per share on revenue of $17.9 billion. Should this be the case, it would translate to year-over-year gains of about 148% and 72% respectively. Namely, these estimates are likely a result of Tesla’s rapid manufacturing capacity expansion initiatives. Among the most recent examples of this would be the opening of its Giga Berlin factory last month. For a sense of scale, Tesla projects that the factory will eventually boast an annual production rate of 500,000 vehicles.
Worth mentioning, there is also the ongoing back-and-forth between Tesla CEO Elon Musk and Twitter (NYSE: TWTR) to consider as well. Following his $43.4 billion takeover offer for the social media firm, investors could be wondering how Musk will finance the purchase. Safe to say, there will certainly be no shortage of coverage on Tesla’s earnings today. As such, TSLA stock could be worth keeping an eye on.
Bank Of America CEO Brian Moynihan On Consumer Spending Now
In other news, Bank of America (NYSE: BAC) CEO Brian Moynihan recently provided a notable update on consumer spending. Speaking in an interview with CNBC’s Jim Cramer, Moynihan notes that Americans continue to spend big. This is surprising seeing as sky-high inflation continues to rear its head across most facets of daily life. According to BofA, the average spending of U.S. consumers throughout March 2022 is up by 13% year-over-year. In turn, Moynihan notes that the first few weeks of April saw this number again by another 5%.
With this in mind, the current worries over diminishing consumer balance sheets may ease up slightly. Moynihan also advises, “Don’t fight the U.S. consumer. They are a very strong force and you can see them very healthy. Their loan balances are down, they have plenty of borrowing capacity and they have plenty of spending capacity.” For one thing, this would be backed up by BofA’s earnings beats from yesterday, fueled by solid credit quality from its borrowers.
IBM In Focus After Beating Top And Bottom Line Estimates In Quarterly Update
Another company to take note off now would be International Business Machines (NYSE: IBM) or IBM, for short. In essence, IBM is looking at overall healthy figures in its latest financial release. The company’s earnings per share for the quarter are at $1.40, topping consensus projections of $1.38. At the same time, it is boasting a total revenue of $14.2 billion, exceeding analyst estimates of $13.85 billion. Notably, this also marks IBM’s first full quarter without its Kyndryl infrastructure services arm.
Among the core growth factors for the quarter would be IBM’s consulting revenue. The likes of which are up by 13% year-over-year, totaling $4.83 billion and beating Wall Street expectations of $4.6 billion. Looking forward, the company is raising its guidance for the current fiscal year. As it stands, IBM is anticipating revenue growth in the high-end of its mid-single-digit estimate. As such, IBM stock could be turning heads in the stock market today.