Stock futures slip lower as February trading begins with caution; Bloomberg reports the FTC will probe Microsoft’s $69 billion takeover of Activision; Google Q4 earnings on deck with a focus on ad sales; Tesla petition seeking Biden acknowledgement on EV leadership grows and the New York Times buys mystery word game Wordle for a mysterious price.
Here are five things you must know for Tuesday, February 1:
1. — Stock Futures Slip Lower Heading Into Clean Slate February
U.S. equity futures edged lower Tuesday, following on from a wild January ride that provided the best two-day rebound for tech stocks in two years and the weakest monthly performance for the S&P 500 in more than a decade.
Markets remain gripped by the wholesale re-pricing of assets amid the Federal Reserve’s hawkish turn on inflation, which could trigger between four and five rate hikes this year, slowing corporate profit growth and a broader weakening in the global economic recovery.
At least two of those concerns will come into focus today with a key reading of January economic activity in the world’s largest economy at 10:00 am Eastern time — the ISM manufacturing PMI survey — and a duo of tech-related earnings after the bell from Google parent Alphabet (GOOGL) – Get Alphabet Inc. Class A Report and chipmaker Advanced Micro Devices (AMD) – Get Advanced Micro Devices, Inc. Report.
The CBOE Group’s benchmark volatility gauge, the Vix (undefined) , has fallen nearly 27% from the one-year peak it scaled last week, while a modest pullback in Treasury bond yields has provided some stability in markets on Wall Street heading into the start of February.
Futures tied to the Dow Jones Industrial Average are indicating an 85 point opening bell decline while those linked to the S&P 500 are priced for a 15 point pullback. Nasdaq Composite futures are indicating a 35 point dip.
2. — FTC Reportedly Probing Microsoft’s $69 Billion Activision Deal
Microsoft (MSFT) – Get Microsoft Corporation Report shares edged lower in pre-market trading following a report that the Federal Trade Commission is looking to review its planned $69 billion takeover of video game maker Activision Blizzard (ATVI) – Get Activision Blizzard, Inc. Report.
Bloomberg news reported the antitrust probe late Monday, noting the FTC, and not the Justice Department, will lead the investigation into whether the deal will stifle competition in the $200 billion video game industry.
Microsoft will pay $95 a share for the Call of Duty and World of Warcraft gamemaker, the companies said earlier this month, in a deal that could see rivals scrambling to secure their place, as well as their scale, in the 3 billion player-strong market as companies to establish and monetize their subscriber bases ahead of their move into the metaverse.
Microsoft shares were marked 0.11% lower in pre-market trading to indicate an opening bell price of $310.65 each.
3. — Google Earnings On Deck With Ad Sales, ‘Other Bets’ In Focus
Google shares (GOOGL) – Get Alphabet Inc. Class A Report shares edged lower in pre-market trading ahead of fourth quarter earnings from its parent, Alphabet, after the close of trading later today.
Analysts are looking for a bottom line of $27.48 per share for the tech and ad giant, a 23% gain from the same period last year, on revenues of $72.1 billion, mostly powered by ad sales and the group’s cloud computing division.
Investors will closely track Google’s operating margin, which is expected to come in around 35.4%, for clues on both the impact of privacy changes in Apple AAPL iOS and rising input costs from the global semiconductor shortage. They’ll also focus on the company’s capital spending plans and outlook for the coming year, including commentary on search traffic and its ‘other bets” division, which includes its self-driving group Waymo.
Google shares were marked 0.2% lower in pre-market trading to indicate an opening bell price of $2,701.00 each, a move that would leave the $1.8 trillion stock essentially unchanged over the past six months.
4. — Tesla Petition Supports Gathers As Musk Prods Biden on EVs
Tesla (TSLA) – Get Tesla Inc Report shares edged lower in pre-market trading as support for the clean-energy carmaker’s place in President Joe Biden’s strategy to boost electric vehicle production in order to tackle climate change.
A Change.org petition seeking President Biden to include Tesla — a non-unionized company — in his broader EV plans has amassed more than 33,000 signatures.
founder and CEO Elon Musk provided support for the movement late Sunday when he Tweeted from his verified account that “For reasons unknown, @potus is unable to say the word ‘Tesla'”, in reference to the President, who has invited U.S. carmakers such as Ford F and General Motors to the White House to discuss EV strategies while excluding the Austin, Texas-based market leader.
Tesla shares were marked 0.25% lower in pre-market trading to indicate an opening bell price of $934.47 each.
5. — New York Times Buys Wordle
New York Times Company (NYT) – Get New York Times Company Class A Report shares slipped lower in pre-market trading after the media group said it would purchase Worldle, the popular daily world puzzle challenge, for what it called “low seven figures”.
Wordle, which was only released in October, has amassed a global following of players who attempt to solve a five-letter ‘mystery word’ with only six guesses. The Times said it hopes the phenomenon will add more heft to its gaming division, which passed the 1 million mark in terms of subscribers last year, as it aims to reach a target of 10 million total media subscribers by 2025.
New York Times Co shares were marked 1.32% lower in pre-market trading to indicate an opening bell price of $39.50 each.
