Stock Market Futures Slip On Reports Of Russian Forces Seizing Nuclear Power Plant In Ukraine
U.S. stock futures are moving lower as we approach the end of another hectic trading week. This marks the second week of the ongoing Russia-Ukraine war that has and continues to impact markets worldwide. From soaring inflation, dwindling global supplies, to mentions of nuclear plants, the situation is uncertain, to say the least. Even now, Russia is reportedly engaging in self-sanctioning. By doing so, it is essentially limiting its oil exports further while increasing the pressure on global energy supplies.
Speaking on this is the likes of JPMorgan (NYSE: JPM) and Morgan Stanley (NYSE: MS). On one hand, should these restrictions persist, JPMorgan sees oil prices rising to as much as $185 this year. This would mark a significant leap from the already elevated levels in general. On the other hand, analysts over at Morgan Stanley believe that a “geopolitical risk premium,” should be added to price forecasts now. This would bring its one-month Brent oil price estimate to a whopping $125 per barrel now. Amidst all of this, investors will also likely be looking towards more earnings alongside the latest data on the recovering job market. On that note, there remains plenty of exciting stock market news to consider today. As of 5:11 a.m. ET, the Dow, S&P 500, and Nasdaq futures are trading lower by 0.76%, 0.75%, and 0.72% respectively.
Broadcom (AVGO) Stock Gains After Earnings And Guidance Beat Estimates
In after-market hours yesterday, leading semiconductor firm Broadcom (NASDAQ: AVGO) reported its financial results for its fiscal 2022 first quarter. The company performed steadily this quarter with revenues and earnings per share that exceeded Wall Street estimates. For starters, the company brought in $7.71 billion in sales for the quarter, an increase of 16% year-over-year. Next, we have Broadcom’s quarterly profits. Notably, the company is looking at a net income of $2.47 billion, representing a solid year-over-year jump of 79%.
Elaborating on the company’s admirable performance is CEO Hock Tan. He explains, “Broadcom’s record first-quarter results were driven by strong enterprise demand, and continued investments in next-generation technology by hyperscale and service providers.” The semiconductor firm is also guiding for revenue to be approximately $7.9 billion. This would be above current estimates of $7.42 billion. Overall, given the chip supply shortage and increasing demand, AVGO stock could have more room to grow this year.
Gap On The Rise After Providing Upbeat Earnings Guidance and Smaller-Than-Expected Loss
Legacy apparel retailer Gap (NYSE: GPS) could be another name to look out for this earnings season. Diving right in, it reported fourth-revenue of $4.53 billion, an increase of 4% year-over-year. That marginally exceeded consensus estimates of $4.49 billion. Along with that, Gap reported a loss of $0.02, well below the $0.14 loss that analysts were expecting. The company cautions that headwinds related to shipping and inflation could persist through the first half of the year. However, after that, the company expects to turn a corner, as evidenced by its annual forecasts across the board.
According to GAP CEO Sonia Syngal, the company expects delivery times of inventory shipments to improve as it looks to diversify its port exposure. In detail, it expects inventories to grow in the mid-20% range by the end of the first quarter. Besides that, Gap also expects sales to grow by a single-digit percentage from the year before. Analysts are currently predicting a 1.6% growth. As for profits, Gap expects to earn between $1.85 and $2.05 per share on an adjusted basis. For comparison, analysts were projecting earnings per share of $1.86 for the full year. As a result of Gap’s generally positive outlook for the fiscal year, investors could be eyeing GPS stock today.
Panasonic To Build U.S.-Based Mega-Factory Supplying EV Batteries To Tesla; Tesla To Receive Green Light For $5.5 Billion Berlin Gigafactory
On the electric vehicle (EV) front, Tesla (NASDAQ: TSLA) and Panasonic (OTCPK: PCRFY) appear to be on the move. As of yesterday, Panasonic is planning to build a multi-billion-dollar factory in the U.S. According to the Japanese tech giant, the mega-factory will serve to supply Tesla with novel lithium-ion batteries. For now, Panasonic is looking to construct the facility in either Kansas or Oklahoma. This would be strategic, seeing as Tesla is prepping to build a new EV plant in Texas as well.
According to sources from Reuters, there is no set timeline yet for the construction of the plant. Nevertheless, Panasonic is already a long-time supplier of EV batteries for Tesla. The firm expects to begin production in its Japanese plant by the end of March 2024. Notably, the batteries also boast the capability of boosting Tesla’s overall vehicle range.
If that wasn’t enough, reports out of Germany suggest that Tesla could be making headway on its Berlin gigafactory. This news comes as the German state of Brandenburg is set to host a news conference later today. Should Tesla meet certain criteria, the $5.5 billion facility near Berlin could receive approval. Ideally, such an approval would mark a solid win for Tesla as it looks to expand its presence in Europe. With all this in mind, TSLA stock could be worth looking out for now.
Verizon Sees More Growth Opportunity; Teams Up With Meta
In other news, Verizon (NYSE: VZ) appears to be kicking into high gear across the board. Namely, the company revealed a slew of positive developments on the operational front during its investor day yesterday. Alongside this, Verizon CEO Hans Vestberg also provided some upbeat commentary on the company’s current goals and focuses. Regarding the latter, Vestburg, in an interview with CNBC’s Jim Cramer, notes that Verizon is seeing “more growth opportunity than we’ve ever had before.” Furthermore, the CEO also highlights that Verizon’s clear capital allocation strategy has two key priorities. They are, reducing the company’s capital intensity to under 12% in 2024 and growing its quarterly dividend. This would, arguably, serve to further solidify VZ stock as a defensive play amidst the current uncertainty in markets.
At the same time, the company is actively working to bolster its operations as well. As of yesterday, the company is officially working with Facebook parent company, Meta Platforms (NASDAQ: FB). Through this strategic partnership, the duo will focus on how Verizon’s 5G network and computing prowess fit into the metaverse. While this project is still in the early stages, it would be an exciting new area of tech for Verizon to venture into. Not to mention, Verizon is also expecting to cover 175 million people with its 5G Ultra Wideband network by the end of 2022. With Verizon keeping its focus on long-term growth and keeping up its momentum, VZ stock could be in focus.