Stock futures mixed as investors parse surprisingly hawkish Fed stance; Tesla slips lower after cautious outlook following record Q4; Intel slumps as chipmaker says supply chain disruption will last through 2022; Netflix leaps after Ackman’s Pershing Square hedge fund snaps-up $1 billion stake and Apple will publish December quarter earnings after the closing bell.
Here are five things you must know for Thursday, January 27:
1. — Stock Futures Mixed As Investors Parse Hawkish Powell Comments
U.S. equity futures traded mixed Thursday, after erasing earlier losses in overnight trading, as investors parsed a surprisingly hawkish policy stance from the Federal Reserve ahead of a key inflation reading and prep for December quarter earnings from Apple (AAPL) – Get Apple Inc. Report after the close of trading.
Fed Chairman Jerome Powell noted in his question and answer session with the media late Wednesday that elevated inflation would likely last through to the end of the year and refused to explicitly rule-out the prospect of rate hikes at consecutive policy meetings from March and beyond.
An earlier statement from the Fed, which suggested the reduction of its $9 trillion balance sheet could occur alongside rate hikes, added to the hawkish tone of the overall messaging, sending Treasury note yields higher and pushing stocks into a sharp late-session pullback.
Looking into the Thursday session, investors will navigate through a trio of top-tier data releases, including a preliminary reading of fourth quarter GDP growth, the Fed’s preferred inflation gauge for the month of December and weekly jobless claims.
Fourth quarter earnings are also expected from Ford (F) – Get Ford Motor Company Report, Comcast (CMCSA) – Get Comcast Corporation Class A Report, Mastercard (MA) – Get Mastercard Incorporated Class A Report and McDonald’s (MCD) – Get McDonald’s Corporation Report.
On Wall Street, futures tied to the Dow are indicating a modest 20 point opening bell dip while those linked to the S&P 500 are priced for a 1 bump to the upside.
Nasdaq Composite futures are indicating a 20 point opening bell gain as benchmark 10-year Treasury note yields hold at 1.841% in overnight trading.
2. — Tesla Edges Lower After Record Q4 Sales
Tesla (TSLA) – Get Tesla Inc Report shares edged lower in pre-market trading after the carmaker said its production capacity would remain limited by supply-chain disruptions, but nonetheless pledged to grow sales by 50% this coming year.
The caution followed record revenues for Tesla over the final three months of the year, which surged 65% to $17.7 billion, helping it beat Street earnings forecasts with a bottom line of $2.54 per share.
Tesla also said it didn’t expect to introduce any new models to its fleet this year, and confirmed earlier reports that its much-hyped cybertruck would be delayed until at least 2023.
Musk, however, said his concern with truck was was more about “making it more affordable” than any design flaws.
Tesla shares were marked 0.4% lower in pre-market trading Thursday to indicate an opening bell price of $933.80 each.
3. — Intel Shares Slump As Chipmaker Cautions on Supply Chain
Intel (INTC) – Get Intel Corporation Report shares slumped lower in pre-market trading after the chipmaker cautioned that supply chain disruptions would keep a lid on near-term profits growth, clouding the impact of its record fourth quarter revenue haul.
Intel said March quarter earnings would come in around 80 cents per share, around 6 cents shy of the Refinitiv forecast, after posting record revenues of $19.5 billion and an adjusted bottom line of $1.09 per share over the three months ending in December.
“In Q4, we also saw the strong recovery in the channel as increased supply led to a record sell-through for Intel, and we started to see inventories return to pre-pandemic levels,” CEO Pat Gelsinger told investors on a conference call late Wednesday. “Unprecedented demand continues to be tempered by supply chain constraints as shortages in substrates, components, and foundry silicon has limited our customers’ ability to ship finished systems.”
Intel shares were marked 2.6% lower in pre-market trading to indicate an opening bell price of $50.35 each.
4. — Netflix Shares Jump As Ackman Builds $1 Billion Stake
Netflix (NFLX) – Get Netflix, Inc. Report shares surged higher in pre-market trading after billionaire investors Bill Ackman revealed a new $1 billion stake in the streaming group.
Ackman said Pershing Square Capital Management began buying shares in Netflix late last week, following its weaker-than-expected fourth quarter earnings report, and has now amassed a holding of around 3.1 million shares.
“We are pleased to add Netflix to our portfolio,” Ackman told investors in his hedge fund late Wednesday. “Many of our best investments have emerged when other investors whose time horizons are short term, discard great companies at prices that look extraordinarily attractive when one has a long-term horizon.”
Netflix shares were marked 4.8% higher in pre-market trading Thursday to indicate an opening bell price of $376.94 each.
5. — Apple Earnings on Tap With Product Road Map In Foucs
Apple (AAPL) – Get Apple Inc. Report shares edged higher in pre-market trading ahead of the tech giant’s December quarter earnings after the closing bell with investors focused on the impact of supply chain disruptions on its near-term sales outlook.
Apple’s new product road map will also provide a near-term catalyst for the stock, with investors hoping the company will detail its vision for developing electronic vehicles and providing augmented reality tools for the metaverse.
Apple has already told us that December quarter sales will be clipped by Covid-linked disruptions in its supply chain following a rare revenue miss over its fiscal fourth quarter, which ended in September.
Apple is expected to post December quarter revenues of $118.7 billion and a bottom line of $1.89 per share.
Apple shares were marked 0.8% higher in pre-market trading Thursday to indicate an opening bell price of $160.90 each.
