Five things to know before the market opens on Thursday, October 27:
1.- Stock futures on the rise with profits, rates, GDP data in view
US stock futures were trading mixed on Thursday, helped in part by declining Treasury yields and a stable dollar, as investors awaited a key interest rate decision in Europe ahead of of the start of business and Apple’s earnings closely watched after the closing bell.
The European Central Bank is expected to raise its key refinancing rate by 75 basis points later this morning in Frankfurt, taking it to 2%, as officials grapple with double-digit rates. inflation pressures and a growing energy crisis in the world’s largest economic bloc.
However, projections for his next move are mixed, after a surprisingly lower-than-expected 50 base point The Bank of Canada’s rise yesterday suggests that policy officials around the world are beginning to assess the impact of their fight against inflation on growth and employment prospects.
That has traders betting on smaller Fed hikes too, and while a 75 basis point move is locked in for November, bets on a follow-up move of the same size in December are down about 35 basis points since last. week to about 42.5%.
Benchmark 10-year notes held around 4.05%, while the US dollar index, which tracks the greenback against a basket of six world currencies, rose 0.15% to 109.853, but remains trading near the lowest levels in at least a month.
The boost from falling yields and a weaker dollar that would normally give stocks has been apparent, with the S&P 500 rising during two of the last three sessions, but a string of weaker-than-expected tech gains, particularly Google (GOOGLE) and Microsoft (MSFT) — has kept broader gains in check.
That puts a lot of emphasis on tonight’s post-bell updates from Apple and Amazon. (AMZN) and investors are focused on the former’s holiday quarter sales outlook and the latter’s indication of any weakness in its benchmark web services division.
Heading into the trading day on Wall Street, with third-quarter GDP data and weekly unemployment numbers due at 8:30 a.m. ET, S&P 500-linked futures contracts are priced at a gain of 5 points, while those linked to the Dow Jones Industrial Average are priced in a 110-point advance. The tech-focused Nasdaq is priced at a 30-point drop due to a massive pre-market drop from Meta Platforms.
In overseas markets, the region-wide Stoxx 600 was down 0.3% in early Frankfurt trading ahead of the ECB rate decision at 7:15am ET, while the FTSE 100 gained a 0.33% in London.
Overnight in Asia, stocks recovered from their lowest levels in more than two years with the MSCI ex-Japan index for the entire region marked 0.8% higher heading into close of trading. Japan’s Nikkei 225 fell 0.32%.
Metaplatforms (GOAL) Shares tumbled in premarket trading, potentially wiping nearly $70 billion from the social media group’s value, after a dismal third-quarter earnings update that forecast deeper losses for its struggling metaverse project.
Facebook’s parent missed Street’s earnings forecast, posting a bottoming result of $1.64 per share, with revenue falling 4% to $27.7 billion.
Looking ahead to the final three months of the year, Meta said it sees revenue in the region of $30 billion to $32.5 billion, a range that falls short of Street’s forecast of $32.3 billion.
Reality Labs, the division that will house the company’s metaverse plans and has lost more than $16 billion in the past 18 months, will see “significantly” more red numbers in the year ahead, Meta said.
Shares of Meta ticked 19.6% lower in premarket trading to signal an opening price of $104.38 apiece, a move that would extend the stock’s year-to-date slump. about 69%.
3. — Ford slips on reduced earnings guidance, charge to get out of self-driving business
Ford (F) Shares fell lower in premarket trading after the automaker cut its full-year earnings guidance and booked a $2.7 billion charge related to the liquidation of its self-driving business.
The moves clouded a strong third-quarter earnings update, in which Ford posted an adjusted bottom line of 30 cents a share on revenue of $39.4 billion.
Ford also cut its guidance for full-year earnings, which it forecasts at around $11.5 billion, down from an earlier estimate of between $11.5 billion and $12.5 billion.
The $2.7 billion charge marks the end of Ford’s joint venture with Volkswagen, known as Argo AI, with CEO Jim Farley noting that “profitable, fully autonomous vehicles at scale are a long way off and we won’t necessarily have to create that technology ourselves. .”
Ford shares were marked 2.5% lower in premarket trading to indicate an opening bell price of $12.50 each.
4. — Apple jumps ahead of Q4 earnings with Outlook in focus
Apple (AAPL) Shares were lower in premarket trading ahead of the consumer tech giant’s much-anticipated fourth-quarter earnings after the closing bell.
Apple is expected to post solid gains on iPhone sales, possibly at the fastest pace of the year, helping revenue rise 6.6% to $88.9 billion, with a bottom line of $1.27 per share.
However, the key to tonight’s report will be Apple’s projections for the three months ending in December, the first in fiscal terms but the most important in terms of sales. Holiday quarter revenue could rise to as much as $128.4 billion, analysts suggest, thanks to strong demand for its new iPhone 14 series and improving sales in China.
CEO Tim Cook’s commentary on inflation, supply chains and the depth of consumer demand will also be closely watched when he speaks to investors around 5:00 pm ET.
Shares of Apple, which have fallen almost 18% so far this year, were down 0.3% in premarket trading to indicate an opening bell price of $148.90 each.
5. — Twitter stock to be suspended as Musk acquisition looms
Twitter (TWTR) rose in premarket trading as New York Stock Exchange officials prepared to suspend trading of the shares tomorrow ahead of a Delaware court deadline for Elon Musk to complete his acquisition of the networking group social for $ 44 billion.
Musk visited the company’s San Francisco headquarters yesterday, shared photos of himself with his 110.2 million Twitter followers and appears poised to consummate the merger deal months before tomorrow’s deadline.
However, the $54.20 per share price it was ordered to pay seems overpriced given warnings about ad spending articulated by companies like Snap. (NAP) Google (GOOGLE) and Meta, as well as the fact that the Nasdaq has fallen almost 20% since the takeover began on April 14.
Twitter shares rose 1.2% in premarket trading to indicate an opening bell price of $53.98 each.