Stock Market Futures Return Gains From Previous Day’s Rally.

U.S. stock futures are in the red in early morning trading on Friday this week. This could be markets continuing to stabilize from all the major factors at play in the stock market now. From the war in Ukraine to the Fed’s first interest rate hike, investors have plenty to consider now. So much so, that some could be wondering how to make sense of all this.

Providing some insight into the current state of things is Paul Meeks, the portfolio manager of Independent Wealth Solutions Management. Meeks begins by saying, “We did get the hawkish statements out of the Fed [Wednesday], and even though they’re going to be stiff headwinds for tech stocks and other aggressive growth companies, the data is now known. And when it’s known, it’s absorbed in the market.

Even with all that said, he is not without concerns. The analyst also adds, “The thing that I still worry about, and it keeps me away from go all-in in tech, is what’s going on in Eastern Europe, because if we still have geopolitical risks, we still have risks to these stocks.” Regardless, investors will likely be keeping their ears to the ground for now. As of 7:02 a.m. ET, the Dow, S&P 500, and Nasdaq futures are trading lower by 0.65%, 0.73%, and 0.75% respectively.

Roblox Stock Sees Best Trading Since January

Roblox (NYSE: RBLX) seems to be benefiting from the overall relief rally in tech stocks recently. Just yesterday, RBLX stock ended the trading day up by over 11%, its best day since January 31. To go into the details, the company’s daily average trading volume remains at elevated levels. This is apparent with over 30 million of Roblox stock changing hands per day. At the same time, analysts seem to be reeling their expectations slightly when it comes to Roblox. Namely, analysts over at Needham have a Buy rating on RBLX stock but are also cutting the firm’s price target to $60 from $83. Despite the decrease, this suggests a possible upside of 29% over its closing price of $46.35 from yesterday.

Moreover, despite its recent weakness in the stock market, Roblox remains hard at work on the operational front. According to a recent job posting, the company is looking to hire a “Senior Software Engineer” for the PlayStation console. This would be referring to Sony’s (NYSE: SONY) popular gaming console, the PlayStation. Ideally, this could indicate that Roblox is looking to bring its flagship game to a wider audience. This would involve the creation of an app for the PlayStation Store. With all this in mind, investors may want to keep an eye on RBLX stock.

RBLX stock
Source: TradingView

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GameStop Posts Quarterly Loss As Supply Chain Pressures Linger; Set To Launch NFT Marketplace

In other news, GameStop (NYSE: GME) posted its latest quarterly figures after yesterday’s closing bell. Overall, the titular meme stock firm posted less-than-ideal numbers. It is looking at a total revenue of $2.25 billion for the quarter, translating to a 6% year-over-year increase. According to GameStop, its hardware and accessories sales account for 52.7% of this. Furthermore, the company is also seeing solid growth in its PowerUp subscriptions. GameStop notes that its PowerUP Rewards Pro members are up by 32% year-over-year. Also worth mentioning is that GameStop is planning to launch a marketplace for non-fungible tokens (NFTs) in July. This would echo similar moves from companies across industries towards the lucrative NFT market.

While all this is great, GME stock appears to be in a slump now as investors consider GameStop’s latest net income or the lack thereof. To explain, the company posted a noticeable net loss of $147.5 million, or $1.94 per share. This is in comparison to earnings of $1.19 per share from the same quarter last year. Explaining the reason for this is CEO Matt Furlong. In essence, Furlong cites headwinds from both supply chain and pandemic pressures for the current loss. In his words, GameStop “made the conscious decision to lean in and absorb higher costs in order to meet customer demand.” With this alongside the company’s change in strategy, GameStop is not providing guidance for now. 

GME stock
Source: TradingView

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FedEx Misses On Earnings Estimates As Labor Shortages Weigh On Operations

Likewise, FedEx (NYSE: FDX) also appears to be feeling the squeeze from overall rising costs and labor shortages. Similar to GME stock, FDX stock is also trading lower following its latest fiscal quarter release. In it, FedEx posted an earnings per share of $4.59 on revenue of $23.6 billion for the quarter. To put things into perspective, this is versus consensus estimates of $4.64 and $23.4 billion respectively. Despite the beat on the revenue front, investors seem to be reacting to its earnings miss. Could there be more to consider beyond that?

Naturally, for the company, the answer to that would be a yes. After all, FedEx is among the leading names in the global logistics industry. Notably, the company’s operating income is up by 38% year-over-year, totaling $1.46 billion. On top of that, FedEx now boasts an operating margin rate of 6.2%, an improvement from the 4.9% the same quarter last year. According to FedEx, generally higher revenue per shipment and a net fuel benefit across its transportation segments are to thank for all this.

Not to mention, the company is also guiding for an annual earnings per share of between $20.50 to $21.50. This is commendable after considering that Wall Street is expecting earnings of $20.58 on this front. Given all of this, some investors could be keen to invest in FDX stock despite its current downturn. 

FDX stock
Source: TradingView

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Merck’s Keytruda Lung Cancer Drug Candidate Reportedly Improves Disease-Free Survival Rates

On the biotech front, Merck (NYSE: MRK) could be in focus today. Diving in, this would be thanks to its latest developmental pipeline update. In particular, the company’s cancer immunotherapy treatment, pembrolizumab (also known as KEYTRUDA), is showing positive results. In the first Phase 3 study for its use in early lung cancer patients, KEYTRUDA reportedly reduced the risk of recurrence or death by 24%. This would be in patients who had already undergone surgery. For the uninitiated, KEYTRUDA is essentially a monoclonal antibody treatment. How it works, in this case, is that it activates the body’s immune system to fight against non-small cell lung cancer.

All in all, the current findings come after patients received a 200-milligram shot once every three weeks throughout a year. Helping to provide some meaning to all this is Merck’s head of global clinical development, Dr. Roy Baynes. “KEYTRUDA has become foundational in the treatment of metastatic non-small cell lung cancer, and we are pleased to present these data showing the potential of KEYTRUDA to help more patients with lung cancer in earlier stages of disease.” Accordingly, Merck is now planning to submit this data to the FDA for approval. Should things go as planned, Merck’s KEYTRUDA would serve as treatment for yet another type of cancer. As such, it would not surprise me to see investors eyeing MRK stock in the stock market today.

MRK stock
Source: TradingView

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