Stocks futures trade mixed as Wall Street’s wild week comes to a close; Apple shares leap after crushing December quarter forecasts; Robinhood tanks after wider-than-expected Q4 loss; Visa shares surge as post-Covid spending spree drives profits and Nearly 45 million Americans are under winter storm watch as a powerful ‘bomb cyclone’ bears down on the northeast.
Here are five things you must know for Friday, January 28:
1. — Stock Futures Mixed As Wild Week Comes To a Close
U.S. equity futures traded mixed Friday, with market volatility gauges holding nearly fifteen months highs, as investors look to close out another wild week of trading on Wall Street that has pulled the broadest measure of domestic stocks deeper into correction territory.
The Federal Reserve’s hawkish stance on rates and inflation from earlier this week, coupled with a disappointing earnings season and suggestions of slowing economic growth have pulled global stocks lower this week, while added market volatility — much of it linked to equity options trading — has whipsawed the Dow into triple-digit intra-day swings for much of the past week.
Growth concerns are also being played out in the bond market, where the gap between 2-year and 10-year note yields has narrowed to just 62.2 basis points, setting up the prospect of a so-called curve inversion — where 2-year note yields rise past 10-year yields — that suggests a near-term recession.
Stronger-than-expected earnings from tech giant Apple (AAPL) – Get Apple Inc. Report could provide some early respite for the markets heading into the start of trading, but investors will first need to pass through a key reading of December inflation at 8:30 am eastern time as well as December quarter updates from Exxon Mobil (XOM) – Get Exxon Mobil Corporation Report, Chevron (CVX) – Get Chevron Corporation Report and Caterpillar (CAT) – Get Caterpillar Inc. Report.
Prior to that, futures tied to the Dow Jones Industrial Average are indicating a 100 point opening bell decline while those linked to the S&P 500 are priced for a 5 point dip.
Apple and Tesla (TSLA) – Get Tesla Inc Report are giving Nasdaq Composite futures a boost, with the tech-focused benchmark indicating a 35 point opening bell gain.
2. — Apple Share Leap After Tech Giant Crushes Holiday Quarter Forecasts
Apple (AAPL) – Get Apple Inc. Report shares jumped higher in pre-market trading as record holiday sales, built off a surge in iPhone demand, offset concerns for global supply chain disruptions and chip shortages.
Apple earned more than $34.6 billion for the three months ending in December as revenues rose 11.2% from last year to a record $123.95 billion, comfortably topping analysts’ estimates. The tally was even more impressive given that the group had warned the supply chain disruptions and chip shortages would take more than $6 billion from the holiday quarter sales tally.
“As expected, in the aggregate, we experienced supply constraints that were higher than the September quarter,” CEO Tim Cook told investors on a conference call late Thursday. “This is our eighth quarter reporting results in the shadow of the pandemic. And while I can’t say it gets any easier, I can say I’m incredibly proud of the way our teams have come together and continue to innovate on behalf of our customers.”
Apple shares were marked 4% higher in pre-market trading Friday to indicate an opening bell price of $165.60 each.
3. — Robinhood Shares Tank After Q4 Loss, Gloomy Near-Term Outlook
Robinhood (HOOD) – Get Robinhood Markets, Inc. Class A Report shares plunged lower in pre-market trading after the online trading platform posted a steeper-than-expected fourth quarter loss and said near-term revenues would come in sharply lower than Street forecasts.
Robinhood, which found itself at the center of the meme-stock controversy last year when it froze access to certain customer accounts, said March quarter revenues would fall below $340 million, likely as a result of lower equity and cryptocurrency trading volumes. For the three months ending in December, Robinhood had a net loss of $423 million on revenues of $363 million, with compensation expenses eating into its bottom line and monthly active users falling 8% from the three months ending in September.
Robinhood shares, which went public in late July at $38 a share and traded as high as $85 shortly after, were marked 14.6% lower in pre-market trading Friday to indicate an opening bell price of $9.93 each.
4. — Visa Shares Surge As Post-Covid Spending Spree Drives Profits
Visa (V) – Get Visa Inc. Class A Report shares surged higher in pre-market trading after the world’s biggest credit card posted better-than-expected first quarter earnings thanks to a surge in post-pandemic spending and the full return of international travel.
Visa said overall transactions rose 21% to $47.6 billion for the three months ending in December, its fiscal first quarter, helping revenues rise 24% to $7.1 billion while netting a Street-beating bottom line profit of $3.9 billion, or $1.81 per share.
Amidst much uncertainty this quarter resulting from the ongoing COVID pandemic, Visa’s financial performance was very strong,” CEO Al Kelly told investors on a conference call late Thursday. “As we look ahead, we expect accelerated revenue growth versus pre-COVID over the coming years … we are extraordinarily well-positioned to utilize our unique strength and global network to help them grow and scale.”
Visa shares were marked 5% higher in pre-market trading to indicate a Friday opening bell price of $216.50 each.
5. — Winter Storm Warning As Nor’Easter Bears Down On East Coast
A severe winter ‘bomb cyclone’ storm barreling its way towards the northeast United States has more than 45 million Americans bracing for what could be the biggest blizzard in at least four years.
As much as two feet of snow is expected to blanket parts of eastern Massachusetts, according to the National Weather Service, with predicted snowfalls in New York City of up to 18 inches as the storm gathers pace for its arrival later this evening.
Winter storm warnings have also been issued as far south as North Carolina and as far north as Maine, with winds of up to 50 miles an hour predicted for areas around Massachusetts and Rhode Island.
U.S. airlines, still reeling from holiday cancellations and Covid-related staff shortages, are bracing for another weekend of flight disruptions in-and-around the northwest, while power outages are forecast for areas in suburban New Jersey and the New York-Boston corridor.
