Stock Market Futures Dip Following Rough Week For Stocks
Stock market futures are declining yet again before this week’s opening bell. In fact, both the S&P 500 and Nasdaq had one of, if not their worst weeks since March 2020. Following this volatile week, investors are likely looking ahead to Federal Reserve commentary and Big Tech earnings. Regarding the latter, Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT) will be reporting their latest quarterly financials later this week. In terms of the latest word from the Federal Open Market Committee (FOMC) meeting, analysts have their fair share of commentary as well.
Weighing in on that is Deutsche Bank (NYSE: DB) chief U.S. economist Matthew Luzzetti. He says, “The January FOMC meeting should continue the Fed’s hawkish policy pivot by signaling that it will soon be appropriate to begin removing accommodation.” Luzzetti continues, “On the policy rate, the meeting statement and Chair Powell’s press conference should confirm that liftoff is likely in March. Though Powell may hint that the median expectation for three rate hikes this year (December SEP) has edged higher, it will be difficult to signal more tightening relative to current market pricing of a little over four hikes.”
At the same time, there is also no shortage of exciting stock market news for investors to digest today. As of 7:22 a.m. ET, the Dow, S&P 500, and Nasdaq futures are trading lower by 1.66%, 2.32%, and 3.44% respectively.
Wynn Resorts Eyes Sale Of WynnBet Online Gaming Division
Wynn Resorts (NASDAQ: WYNN) appears to be looking to streamline its current operations. This is apparent as the company is planning to sell its online sports betting business, WynnBet. In detail, the news comes from Wynn over the weekend. Notably, this is after the firm ended its deal with Austerlitz Acquisition Corp I (NYSE: AUS) to bring WynnBet public via a SPAC deal. The likes of which would have added up to a whopping $3.2 billion transaction. According to outgoing CEO Matt Maddox, Wynn’s interactive business is not “sustainable”.
Furthermore, Maddox adds that Wynn’s competitors are already allocating too much funds towards attracting new customers. In his own words, “The economics are just not something that we’re going to participate in in the short term.”
As it stands, Wynn is looking to sell off its WynnBet online gaming app at about $500 million. In a time when more people are vaccinated, this could be understandable. Through this divestment, Wynn could be positioning itself to better leverage the post-pandemic boom in travel. Regardless, I could see WYNN stock turning heads in the stock market today.
Peloton’s Fall From Grace Has It Cruising Into Acquisition Territory According To Analysts
Another name to consider in the current reopening trade would be Peloton Interactive (NASDAQ: PTON). Now, some would argue that this home-exercise goliath is not having the best of times in the stock market now. To begin with, the company’s shares exploded onto the scene during the pandemic. After all, with most people isolated at home, Peloton’s home exercise bikes would be a hot commodity. However, since its pandemic-era high, PTON stock is currently sitting on losses of over 80%. By extension, this would bring the company’s market cap below the $9 billion mark. All this would be after a series of concerns ranging from questions about profitability, product safety, and production halts.
Although, Peloton’s most recent release of preliminary earnings data did see the company’s shares make a small recovery. Overall, PTON stock continues to receive attention from investors during these turbulent times for the company. So much so that some analysts are saying that an acquisition could be in the books for the company. Namely, Roundhill Investment’s Brian Lichtor is already naming potential buyers. Among the top firms in his list are Apple, Nike (NYSE: NKE), and Amazon (NASDAQ: AMZN).
Additionally, Lichtor also provides his take on how Apple could benefit from such a buy. “At an enterprise value of under $10 billion, Peloton could make for an attractive acquisition target given their strong brand loyalty and valuable intellectual property. In my opinion, it would make a ton of sense for a company like Apple to acquire Peloton, integrating Peloton into the Health app.” Sure, all this might be speculation for now. But, for investors considering jumping on PTON stock now, this could be a point to note.
IBM Earnings: What To Look Out For
In terms of earnings, we have computer hardware giant IBM (NYSE: IBM). After today’s closing bell, IBM will be reporting its fourth-quarter earnings. According to Wall Street estimates, the company could post an earnings per share of $3.39. Should this be the case, it would mark a solid year-over-year jump of over 63%. On the flip side, consensus projections suggest that IBM’s quarterly revenue would see a decrease of about 21% year-over-year. Even so, it would add up to a total of about $16.09 billion.
According to Morgan Stanley (NYSE: MS) equity analyst Katy Huberty, there are three key data points to focus on. According to Huberty, these are “standalone model mechanics and whether Software revenue can re-accelerate while Consulting demand sustains.” Moreover, the investment banking firm also notes that IBM’s current setup is “more attractive” in the second half of 2022. On top of all that, Huberty currently has an Equal-Weight rating on IBM stock with a price target of $147. This would suggest a potential upside of about 13% over its price of $129.35 as of last week’s closing bell. With all that in mind, it would not surprise me to see investors eyeing IBM stock now.
Notable Earnings In The Stock Market Today
Not forgetting, there is also a widespread of companies reporting earnings in the stock market today as well. For those looking to catch pre-market earnings, we have Halliburton (NYSE: HAL), Philips (NYSE: PHG), Bank of Hawaii (NYSE: BOH), Bank of Marin Bancorp (NASDAQ: BMRC) on tap.
Alternatively, there are also notable names in reporting earnings after the closing bell. This includes Boot Barn (NYSE: BOOT), Steel Dynamics (NASDAQ: STLD), Logitech (NASDAQ: LOGI), Crane Company (NYSE: CR), Brown & Brown (NYSE: BRO), and PetMeds (NASDAQ: PETS). Between earnings, companies refining their services, and Fed action, the stock market remains as busy as ever.
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