Stock Market Futures Inch Higher After Market Rally Gains Steam
U.S. stock futures are leaning towards the green in early morning trading today. This comes as the broader stock market looks to shake off losses from a bumpy first half of 2022. With the beginning of a new week also comes several key economic reports on deck. Namely, later on Thursday, the Bureau of Economic Analysis will be releasing its personal consumption expenditures (PCE) data. After considering that the PCE is the Federal Reserve’s consumer price measure of choice, this could be a potential market mover.
Providing an overview of the current state of things is LPL Financial’s (NASDAQ: LPLA) chief market strategist, Ryan Detrick. He argues, “As bad as [this year] has been for investors, the good news is previous years that were down at least 15% at the midway point to the year saw the final six months higher every single time, with an average return of nearly 24%.” While taking in all of this, here is how the major U.S. stock index futures are doing now. As of 6:17 a.m. ET, the Dow, S&P 500, and Nasdaq futures are trading higher by 0.27%, 0.40%, and 0.57% respectively.
Nike Earnings Preview: What To Know
Among the major focuses for investors now could be Nike (NYSE: NKE). For the most part, this would be thanks to the company’s upcoming earnings update after the closing bell today. Naturally, with this retail industry goliath on deck, NKE stock would be in focus now. As it stands, the consensus on Wall Street for Nike’s fourth-quarter earnings per share is $0.82. Furthermore, Wall Street analysts are also forecasting a total revenue of $12.1 billion for the quarter. To compare, in its previous quarterly report, the company topped consensus figures across the board. Notably, its earnings per share for the third quarter were $0.87, ahead of the consensus of $0.72.
However, for the current quarter, it is important to note that Nike’s inventories would be a factor to consider. For the third quarter, the company’s inventory was up by 15% year-over-year. According to Nike, a key reason for this would be ongoing supply chains leading to growing lead times. Not to mention, all this is before the current growing mentions of a possible recession. Because of all this, investment banks are already expecting turbulence ahead for Nike. Take Morgan Stanley (NYSE: MS) analyst Alex Straton for example. In his recent review of Nike, Straton writes that “EPS might get worse before it gets better.” This, he argues, is due to the persisting concerns over Covid lockdowns in China hampering consumer activity.
At the same time, Mitch Kummetz, a senior analyst at Seaport Research Partners, also weighed in on Nike. He begins by stating, “We don’t believe an above-normal premium valuation is currently justified for three main reasons.” Kummetz then identifies, shifting consumer demands, demand for Nike’s key franchises, and the company’s wholesale distribution strategy. Safe to say, all this would have investors eyeing NKE stock in the stock market today.
Goldman Sachs Reportedly Planning To Raise $2 Billion For Potential Move On Celsius Network
In other news, Goldman Sachs (NYSE: GS) could be looking to expand its crypto portfolio significantly. Overall, this news comes from a recent report by Coindesk. According to the report, Goldman Sachs is looking to raise $2 billion to purchase assets from Celsius Network, a crypto lender. In detail, Coindesk writes that the asset acquisition could allow Goldman to buy Celsius’ assets at a notable discount should the firm file for bankruptcy. Additionally, it also adds that Goldman is evaluating interest from Web3 crypto funds.
All in all, the report follows news of Celsius Network bringing on restructuring consultants from Alvarez & Marshal. This, according to the Wall Street Journal, could be in preparation for a potential bankruptcy filing. As crypto markets continue to feel the heat amidst wide-based sell-offs, this could be a win-win situation for both firms. On one hand, Goldman would essentially be backing Celsius at a crucial time for the crypto lender. On the other hand, the bank can further expand its operations in the crypto space long-term. With all this in mind, GS stock could be worth checking out in the stock market this week.
Jumia In Focus Following Mentions Of Possible Amazon Takeover From Citron
Shares of Jumia (NYSE: JMIA) appear to be gaining attention following a report by notorious short-seller Citron Research. In particular, this is likely thanks to a suggestion by Citron CEO Andrew Left regarding Jumia. According to Left, this African e-commerce firm could be in the sights of Amazon (NASDAQ: AMZN). As with most mentions of a potential takeover, JMIA stock jumped by over 6% during intraday trading last Friday.
Overall, it is important to note that Left’s comments remain mostly speculation. In fact, the famed short-seller firm did shift its views on Jumia in recent years. This would be from shorting the firm in 2019 to buying shares in late 2021. For one thing, Jumia did recently state that it is focusing on future profitability. Accordingly, this follows commentary from management during the company’s recent 10-year anniversary celebration earlier this month.
Among the key highlights for Jumia’s current operations would be growing consumer demands, JumiaPay, and the company’s logistics arm. Regarding the first, Jumia notes, “we are offering solutions and access to consumers of products, which are very relevant with our position in the everyday categories, and we have very good prices.” For JumiaPay, the company did recently obtain licensing in Nigeria and Egypt for off-platform use of JumiaPay. Not forgetting, Jumia also has an ongoing collaboration with UPS (NYSE: UPS) in Africa as well. Following this news, investors may be taking another look at JMIA stock in the stock market now.
ExxonMobil CEO Darren Woods On Electric Vehicle Trends
Meanwhile, Exxon Mobil (NYSE: XOM) CEO Darren Woods recently spoke on the reception of electric vehicles (EV) among consumer markets. According to Woods, the company now predicts that all new passenger car sales will be electric by 2040. For reference, this figure was at 9% in 2021, according to market research company Canalys. Year-over-year that represents a whopping 109% increase from 2020. Should these types of gains persist, Exxon anticipates that the age of EVs would likely come sooner than most think.
More importantly, with Exxon being among the largest refiners and marketers of petroleum products worldwide, how would it fit into all this? Well, according to Woods, Exxon’s chemicals division will likely become a prominent growth factor for the company. To highlight, the company does produce plastics that can be put to use in the manufacturing of EVs.
Also, according to Exxon’s calculations, oil demand in 2040 will likely hold at 2013 to 2014 levels. Even with this imminent shift in the automotive industry, Woods and company do not seem to be fazed. In his words, “that change will not make or break this business or this industry quite frankly.” As such, long-term investors could be considering XOM stock at the opening bell for today.