Stock Market Futures Slip Following The Federal Reserve’s Interest Rate Hike
U.S. stock futures are edging lower in early morning trading today. This follows the first pandemic-era interest rate hike from the Federal Reserve. Accordingly, by doing so, it would signal that the central bank is looking to wean the U.S. economy off its easy-money policies. Furthermore, the Fed also revealed its Summary of Economic Projections or dot plot for short. Simply put, Federal Reserve policymakers are anticipating up to six more rate hikes in 2022 on average.
Commenting on this is LPL Financial’s (NASDAQ: LPLA) chief market strategist Ryan Detrick. He begins by saying that “The Fed didn’t rock the boat much.” Detrick continues, “Yes, they lowered economic expectations in 2022 while also increasing inflation, but much of that was already priced into things. Overall, they still see strong growth, which helps support the recovery.” Aside from all this, the stock market remains as active as ever with acquisition talks and earnings news front and center. As of 6:02 a.m. ET, the Dow, S&P 500, and Nasdaq futures are trading lower by 0.35%, 0.44%, and 0.58% respectively.
Kohl’s Jumps As Reports Of Potential Takeover Surface
Kohl’s (NYSE: KSS) seems to be coming into focus in the stock market today. This is likely courtesy of recent reports regarding a possible acquisition of the firm. In essence, according to The Wall Street Journal (WSJ), Canadian department store chain Hudson’s Bay could be looking to make a bid for Kohl’s. Additionally, the same report also lists private equity firm Sycamore Partners as a potential suitor. As you can imagine, with news of a buyout circulating, investors are already flocking to KSS stock. Following yesterday’s gains of over 17%, the company’s shares are now up by 27% year-to-date.
Going further into details, WSJ notes that Sycamore and Kohl’s are currently in talks about a bidding price in the “high $60s” per share. Should this be the case, it would value a Kohl’s takeover at just over $9 billion. Speaking on this is a Kohl’s spokeswoman. She starts by saying, “As previously disclosed, the board’s engagement with potential bidders is robust and ongoing.” To point out, all this would make for a better offer compared to previous takeover bids on Kohls. Namely, just last month, investment firm Acacia Research attempted with an offer of $64 a share. However, Kohl’s noted that the offer somewhat undervalues its business. Nonetheless, with all this take of sale of the company, KSS stock could be worth watching now.
PagerDuty In Focus Following Earnings And Revenue Beats
At the same time, PagerDuty (NYSE: PD) is among the names turning heads on the earnings front today. Diving in, after yesterday’s closing bell, the cloud computing firm posted a total revenue of $78.5 million. This tops Wall Street’s estimates of $76 million and adds up to a year-over-year increase of 32.4%. Moreover, PagerDuty also reported a loss per share of $0.04, a narrower loss than the expected $0.06 loss. As a result of all this, PD stock is currently gaining by over 13% in pre-market trading today.
According to PagerDuty CEO Jennifer Tejada, PagerDuty has “ongoing market traction” for its new products and “strong go-to-market execution” to thank for all this. Tejada also adds that PagerDuty is capping for a fiscal year of accelerating growth. Overall, it aims to continue offering enterprises top-quality services via its digital operations platform. The likes of which involve effectively “predicting, facilitating, and automating the urgent, unstructured work essential to modern business success.”
Not to mention, PagerDuty is also working to acquire Catalytic, a no-code workflow automation platform. Ideally, PagerDuty sees this acquisition expanding its offerings towards catering to applications in human resources, finance, and supply chain workflows. All while synergizing well with PagerDuty’s existing process automation solutions. After considering all of this, the current hype around PD stock is not all that surprising.
Williams-Sonoma Moving Up After Announcing Strong Earnings, Dividend Bump, And Share Repurchase Program
Elsewhere, consumer retail firm Williams-Sonoma (NYSE: WSM) is also in the news today. For the most part, this is thanks to the company posting solid figures in its latest quarterly earnings report. In brief, Williams-Sonoma is looking at earnings of $5.42 per share on revenue of $2.5 billion. To put things into perspective, this is versus Wall Street estimates of $4.82 and $2.58 billion. In particular, revenue for the company’s West Elm brand is up by a solid 18% year-over-year.
Summarizing the company’s performance for the quarter is CEO Laura Alber. She notes, “We are thrilled to deliver a strong finish to fiscal 2021, driving record results, with Q4 comps of 10.8% and operating margin expansion of 310 basis points. These results reflect the resilience in our business model, as we successfully navigated unprecedented challenges within the supply chain, material and labor shortages, and capacity limitations from our incredible consumer demand.”
That’s not all, Williams-Sonoma is also raising its quarterly dividend by a sizable 10%. Accordingly, the company’s dividend payout now stands at $0.78 per share. Moreover, it also announced a new $1.5 billion share repurchase plan. It seems that the company is eager to maintain its current momentum while continuously driving long-term value for its shareholders. With Williams-Sonoma going from strength to strength now, WSM stock would be in focus.
Google Acquires Startup Raxium In Efforts To Ramp Up Investments In AR/VR Hardware
In other news, Alphabet’s (NASDAQ: GOOGL) subsidiary Google does not seem to be slowing down on the acquisitions front. Notably, Google is now acquiring Raxium, a developer of micro LEDs that are used in augmented reality (AR) devices. According to The Information, Google is allegedly looking to do so via a $1 billion deal. For one thing, this could indicate that the company is keen to pick up where it left off on the AR front.
Worth mentioning, the company is already actively working on a new AR headset. By Google’s estimates, its work on “Project Iris” will likely be finished by 2024. In the larger scheme of things, Google’s latest push into mixed reality hardware is understandable. After all, most of its peers like Meta Platforms (NASDAQ: FB), Apple (NASDAQ: AAPL), and Microsoft (NASDAQ: MSFT) are also making similar advances into the metaverse now. With this piece of news in mind, I could see investors eyeing GOOGL stock at today’s market open.