Stock Market Futures Gain As World Economic Forum Kicks Off
U.S. stock futures are on the rise heading into the current trading week. This comes at a time when the broader stock market continues to trade in bear market territory. In particular, the S&P 500 is especially feeling the pressure, racking up seven consecutive weeks of losses. Historically, this marks its longest losing streak since 2001 and its second seven-week decline since 1980. Among the core contributors to this would be last week’s less-than-ideal set of earnings from the retail scene.
Speaking on the current state of things is Brian Jacobsen, a senior investment strategist at Allspring Global Investments. He posits, “Investors have been struggling with the three ‘Cs’ so far this year: central banks, conflict in Ukraine, and China’s recurring shutdowns,” Jacobsen continues, “This past week we had to add another ‘C,’ compressing profit margins from big retailers.” On top of that, he also highlights that “There was bound to be some payback from the pandemic-induced profit surge a lot of companies experienced, but that payback might be bigger than originally thought.”
In the week ahead, investors also have plenty of economic data to take note of. This would include the Fed’s latest meeting minutes on Wednesday and Thursday’s first-quarter GDP growth estimates. Not forgetting, the Bureau of Economic Analysis will be releasing its monthly personal consumption expenditures print on Thursday as well. After considering all this and today’s stock market news cycle, investors will likely have another busy week ahead. As of 4:39 a.m. ET, the Dow, S&P 500, and Nasdaq futures are trading higher by 0.41%, 0.42%, and 0.35% respectively.
Broadcom Reportedly Amidst Ongoing Talks To Acquire VMware
In the news today is a Bloomberg report about Broadcom (NASDAQ: AVGO) and VMware (NYSE: VMW). Getting straight to it, Bloomberg’s sources suggest that Broadcom is currently engaging in talks to buy the cloud computing software firm. Additionally, another report by the Wall Street Journal notes that the duo are considering a potential cash and stock deal. The report also implies that we could see an agreement come to light soon. On the whole, such news would serve to put VMW stock in the spotlight today. As with most mentions of takeovers, investors could be keen to jump on the company’s shares. At the current time of writing, VMware has a market capitalization of about over $40.3 billion while Broadcom is valued at about $221.7 billion.
For one thing, this would not be Broadcom’s biggest move in recent years. In fact, back in 2017, the semiconductor manufacturer made a bid of over $100 billion for Qualcomm (NASDAQ: QCOM). Despite pulling back its bid over government-related hurdles, it would go to show that Broadcom is willing to go the distance to grow its offerings. Regarding its acquisitions on the software front, Broadcom’s last notable purchase was Symantec’s enterprise security business in 2019 for almost $11 billion. In CEO Hock Tan’s words at that time, “M&A has played a central role in Broadcom’s growth strategy and this transaction represents the next logical step in our strategy.” Nonetheless, while talks could still fall through, it would not surprise me to see all eyes on VMW stock at today’s opening bell.
Zoom To Report Earnings After Closing Bell: What To Know
Among the major firms reporting earnings today would be Zoom (NASDAQ: ZM). This pandemic-era tech goliath has and continues to experience turbulent times as the world returns to normalcy. While most learn to live with the current endemic, concerns regarding Zoom’s long-term growth sustainability would come into question. As such, here is the current consensus on Wall Street for Zoom’s upcoming earnings report after today’s closing bell. For its first fiscal quarter, analysts anticipate an earnings per share of $0.87 on revenue of $1.07 billion from Zoom. Should this be the case, it would translate to a year-over-year decline of 34.1% for earnings per share and a year-over-year increase of 12.2% for revenue.
Overall, it seems that analysts are expecting another noticeable decline in terms of net income for Zoom. However, another key metric to look out for would be the company’s total number of customers contributing over $100,000 in 12-month trailing revenue. On this front, the consensus on Wall Street is 2996, a sizable year-over-year jump of 49.8%. Why would this measure be crucial might you ask? Well, in theory, a higher number could indicate that Zoom is effectively scaling its offerings towards its clients’ growing demands. Accordingly, this could also serve to attract larger clients as well. Amidst the rising prominence of hybrid work environments, Zoom could remain relevant in professional spaces. Because of all this, some would argue that ZM stock could be worth looking at today.
Oil Futures Gain As U.S. Supplies Hit 35-Year Low
Oil prices are on the rise as we enter another trading week. For the most part, this move is not all too surprising seeing as U.S. demand continues to soar. Alongside this dwindling energy supply, slight weakness in the U.S. dollar and COVID-19 lockdowns in Shanghai are also weighing in on prices. All in all, Brent crude futures rose by $0.72 to $113.27 a barrel. At the same time, U.S. West Texas Intermediate crude futures gained by $0.53 to $110.81 a barrel. This would mark further advances in prices for both contracts from last week’s gains.
Speaking on this is Stephen Innes, managing partner at SPI Asset Management. He says, “Oil prices are supported as gasoline markets remain tight amid solid demand heading into the peak U.S. driving season.” Innes also adds that “Refineries are typically in ramp-up mode to feed U.S. drivers’ unquenching thirst at the pump.” For those uninitiated, Innes is referring to the U.S. peak driving season that usually begins at the end of May (Memorial Day weekend) till Labor Day In September. Not to mention, mobility data from TomTom (OTCMKTS: TMOAF) and Alphabet’s (NASDAQ: GOOGL) Google already suggest that roads remain as busy as ever in the U.S. in recent weeks. With all this in mind, I could see oil stocks and oil firms also coming into focus now.
Other Earnings To Consider In The Stock Market Today
Aside from Zoom, there are several other firms reporting their latest financials today. In the pre-market, Xpeng (NYSE: XPEV), Niu (NASDAQ: NIU), Qiwi (NASDAQ: QIWI), and China Automotive Systems (NASDAQ: CAAS) are on tap. On the flip side, Advance Auto Parts (NYSE: AAP), and America’s Car-Mart (NASDAQ: CRMT) are representing the automotive space during the post-market hours. Also, Nordson (NASDAQ: NDSN) and Walkme (NASDAQ: WKME) are hosting their earnings calls after the closing bell as well. Safe to say there is no shortage of exciting stock market news to keep investors on their toes now.