Meta Platform’s $200 billion plunge has tech stocks deeply in the red Thursday, with investors now looking for another earnings lifeline from Amazon after the closing bell.
Updated at 8:44 am EST
U.S. equity futures moved lower Thursday, with tech stocks leading the declines, as investors watched the ripple effect from Meta Platform’s (FB) – Get Meta Platforms Inc. Class A Report $200 billion post-earnings wipeout while eyeing key central bank decisions from around the world.
Meta Platforms, formerly known as Facebook, plunged more than 20% in pre-market trading after weaker-than-expected fourth quarter earnings and muted outlook on revenues and subscriber growth.
The slump pulled a multitude of social media and tech stocks lower in pre-market trading as a result, and looks set to put extra pressure on Nasdaq Composite futures heading into the start of trading.
Stocks are also having trouble finding their footing following a key European Central Bank policy decision, which follows on from the fastest reading for regional inflation on record in January, when harmonized consumer prices rose 5.1%.
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The ECB made no changes to its record-low borrowing rates today, but said its emergency bond buying would end in March, adding that it “stands ready to adjust all of its instruments, as appropriate, to ensure that inflation stabilises at its 2% target over the medium term.”
That near-term plan could provide some clarity for the Federal Reserve, which is also reading for rate lift-off now that U.S. inflation is running at the hottest rate in more than four decades.
The Bank of England also lifted its benchmark Bank Rate to 0.5% Thursday in London, while warning that inflation could surge to a peak rate of around 7% before abating over the second half of the year.
Prior to the start of trading, as well, investors will navigate weekly jobless claims data ahead of tomorrow’s January non-farm payroll report, which showed a 43,000 decline, alongside December quarter earnings from Merck (MRK) – Get Merck & Co., Inc. Report, Eli Lilly (LLY) – Get Eli Lilly and Company Report, Honeywell (HON) – Get Honeywell International Inc. Report, Estee Lauder (EL) – Get Estee Lauder Companies Inc. Class A Report and Biogen (BIIB) – Get Biogen Inc. Report.
Futures contracts tied to the Dow Jones Industrial Average are indicating a 115 point opening bell decline while those linked to the S&P 500 are priced for a 56 point pullback.
Meta Platforms’ slump, as well as deep retreats for Twitter (TWTR) – Get Twitter, Inc. Report, Snap (SNAP) – Get Snap, Inc. Class A Report and Pinterest (PINS) – Get Pinterest, Inc. Class A Report, have futures linked to the Nasdaq Composite looking at an opening bell slump of around 360 points.
The plummet in Meta Platforms shares, in fact, could potentially wipe more than $200 billion in value from the Facebook parent, after a disappointing fourth quarter earnings report that highlighted competition and technical headwinds to the world’s biggest social media company.
Meta shares were marked 22.1% lower in pre-market trading Thursday to indicate an opening bell price of $251.25 each each, the lowest since March of last year.
Other social media stocks were pulled into the Meta slump vortex, with messaging app maker Snap tumbling 16.6% to $26.76 each and micro-blogging website Twitter falling 8% to $33.60 each. Pinterest was also notably lower, down 8.9% to $24.90 each.
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Merck (MRK) – Get Merck & Co., Inc. Report shares edged 0.26% lower after the drugmaker posted stronger-than-expected fourth quarter earnings thanks in part to sales of its blockbuster Keytruda cancer treatment and the recent emergency approval of its Covid antiviral pill.
Elli Lilly (LLY) – Get Eli Lilly and Company Report shares fell 1.1% following a solid set of fourth quarter numbers that included a big boost in Trulicity sales and more than a $1 billion in revenues for its Covid antibody therapies.
Honeywell (HON) – Get Honeywell International Inc. Report shares slumped 3.2% after a muted fourth quarter earnings reported and a disappointing outlook for 2022 profits.
Estee Lauder (EL) – Get Estee Lauder Companies Inc. Class A Report shares bumped 0.3% higher after the luxury group boosted its 2022 outlook thanks in part to solid demand for skincare and fragrances.
Biogen (BIIB) – Get Biogen Inc. Report shares fell 3.5% after the drugmaker’s 2022 profit forecast fell shy of Street estimates thanks in part to a disappointing performance for its recently-approved Alzheimer’s treatment.
Spotify Technologies (SPOT) – Get Spotify Technology SA Report shares slumped 11.4% after the music-sharing and podcast network forecast softer-than-expected user growth that overshadowed a solid fourth quarter earnings report.
Spotify said paid subscribers to it network would grow to 183 million in the current quarter, with revenues forecast in the region of €2.6 billion, but declined to offer guidance on annual growth rates. For the three months ending in December, Spotify had 180 million active users and a staggering 3.6 million podcasts on its platform.
Amazon (AMZN) – Get Amazon.com, Inc. Report shares, meanwhile, fell 3.4% ahead of a key fourth quarter earnings report for the world’s largest online retailer that is likely to focus on labor costs and e-commerce growth.
On a headline basis, Amazon is expected to earn $3.67 a share on revenues of $137.6 billion, with a 2022 EPS range of around $56 per share.
In overseas trading, Europe’s Stoxx 600 held onto earlier gains following the ECB rate decision, with the regional benchmark up 0.45% in mid-day trading in Frankfurt.
Overnight in Asia, China markets, as well as other key bourses in the region, remained closed for the lunar new year celebrations, while the Nikkei 225 closed 1.06% lower at 27,241.31 points.
