Stock Market Futures Looking For Direction As Earnings Roll In

Stock market futures are mostly flat on Wednesday morning. This is despite investors anticipating stronger-than-expected earnings results with increasing optimism over the trajectory on the back of supply chain constraints. Also, this eases concerns that persistent COVID-19 cases could derail corporate America’s profit recovery. Of the S&P 500 companies that have reported thus far, 82% have topped expectations, according to FactSet.

However, Jeff Buchbinder, equity strategist for LPL Financial, said investors shouldn’t expect the beats that companies posted as they emerged from the depths of the pandemic. He added, “We expect solid earnings gains during the upcoming third-quarter earnings season, but upside surprises will be smaller. Unfortunately, we won’t need as many superlatives.

Meanwhile, Bitcoin (BTC) topped $64,000 after ProShares Bitcoin Strategy ETF (NYSEARCA: BITO) rose by nearly 5% on its first day of trading debut. As of 7:49 a.m. ET, the Dow and S&P 500 are declining by 0.07% and 0.07% respectively, while Nasdaq futures are falling by 0.05%.

Netflix (NFLX) Rides Squid Game Success In Earnings

Netflix (NASDAQ: NFLX) reported third-quarter results that showed a pick-up in subscriber growth after a disappointing first half of the year. This shows that the streaming giant can continue to attract new subscribers despite the increasing competition from other streaming providers. Evidently, throughout the pandemic, the company released smash hits such as Bridgerton and Squid Game. The likes of which are still putting Netflix on consumers’ screens across the globe.

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For the quarter, the company’s subscriber growth of 4.4 million was a solid beat over the expected 3.84 million. Revenue was $7.48 billion, meeting expectations. Meanwhile, earnings per share (EPS) came in at $3.19 per share, beating estimates of $2.56. In addition to beating expectations for third-quarter subscriber growth, Netflix also projected better-than-expected new user numbers for the final quarter of the year. Netflix said it anticipated 8.5 million new paid users will join the platform in the fourth quarter. That’s higher than the 8.32 million analysts expected. 

We’re in uncharted territory,” Netflix co-CEO Reed Hastings said on the company’s post-earnings video interview. “We have so much content coming in Q4 like we’ve never had, so we’ll have to feel our way through and it rolls into a great next year also.

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Alibaba Expands Cloud Business Abroad With New Data Centers In Asia

Alibaba (NYSE: BABA) plans to open its first data centers in Thailand and South Korea to assist local enterprises in their digital innovation journey. This would allow Alibaba to expand their footprint overseas, competing against U.S. rivals such as Amazon (NASDAQ: AMZN) and Microsoft (NASDAQ: MSFT). The expansion of Alibaba’s cloud services will allow local businesses to deploy mission critical workloads while enjoying more reliable and secure cloud services with lower latency. 

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As one of the world’s top three cloud service providers, we are committed to bringing our world-class, hyper-scale cloud infrastructure to South Korea and Thailand, so that we can support local businesses to be at the forefront of digital transformation,“- Selina Yuan, General Manager of International Business, Alibaba Cloud Intelligence.

On Tuesday, Alibaba also announced a new chip called Yitian 710. The chip aims to power artificial intelligence applications on Alibaba’s Cloud. Similar to Amazon, cloud computing is seen as a key profit driver for Alibaba over the long term. Admittedly, the cloud computing segment only accounts for 8% of the company’s total revenue right now. But that could also mean that there’s more room for growth as the company continues to upgrade its cloud offering. Besides, Alibaba stock is also on the rise following reports that its founder Jack Ma traveled abroad for the first time in a year. With that in mind, could BABA stock continue its recent recovery?

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Tesla Earnings On Tap After The Stock Market Closes Today

Tesla (NASDAQ: TSLA) is slated to report third-quarter 2021 results after the market closes today. Despite the global semiconductor shortages, investors are expecting a blowout quarter. Analysts are bullish about the quarter too. Delivering this optimism on TSLA stock is Daniel Ives from Wedbush Securities. He anticipates an impressive third-quarter beat in the stock market today. He attributed Tesla’s potential success to its monthly sales already exceeding expectations, and China’s rebound in EV deliveries.

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To recap, Tesla announced earlier this month that it delivered 241,300 electric vehicles in the third quarter. That’s up from 201,250 in the previous quarter. Also, in the same quarter, Tesla’s China sales totaled 133,218, representing a 44% surge from the previous quarter. The largest EV maker has beaten earnings three times in the last four quarters.

Investors will be watching to see if Tesla can maintain its strong financial performance amid ongoing supply chain challenges. Analysts expect Tesla’s earnings and revenue to continue growing at a healthy pace in the third quarter, albeit more slowly than recent quarters. Adjusted EPS is expected to increase 114.5% year-over-year as revenue expands 58.1%. For the full-year 2020, analysts expect adjusted EPS to rise 154.7% as revenue expands 63.6%. Thus, many investors will be keeping a close eye on TSLA stock today.

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Notable Earnings To Watch In The Stock Market Today

As the third-quarter earnings season continues to ramp up, there is no shortage of earnings to take note of today. Should you be keen on jumping on pre-market earnings, there are plenty to choose from. For instance, we have health care companies reporting such as Abbott Laboratories (NYSE: ABT), Biogen (NASDAQ: BIIB), and Anthem (NYSE: ANTM). Not to mention, tech names like Verizon Communications (NYSE: VZ) would also be in focus.

On the flip side, for those looking to track earnings after the closing bell, there are several on tap as well. These include the likes of Tesla, Lam Research (NASDAQ: LRCX), IBM (NYSE: IBM), and Las Vegas Sands (NYSE: LVS). From soaring crypto prices to earnings and notable tech plays, investors have a lot to keep track of in the stock market today.

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