- Dow Jones Industrial Average is up 0.3%
- S&P 500 is down 0.2%
- Nasdaq 100 is down 0.4%
US futures are mixed this morning as markets digest the first earnings out from Big Tech, with Microsoft and Alphabet heading in opposite directions today ahead of more results out from Meta and Amazon this week. Visa, Hilton, Snap, Boeing and T-Mobile are also among those on the move today after releasing results.
US treasury yields have pulled back from 16-year highs but remain elevated, weighing on equities.
Quick check in on commodities. Oil prices are snapping a three-day losing streak today while gold is holding steady.
The economic calendar today includes US new home sales, the EIA crude oil stocks change and headlined by a speech from Federal Reserve chair Jerome Powell. Later today, European Central Bank president Christine Lagarde will also be speaking.
Most discussed Reddit stocks
Below is a list of the top 10 most mentioned US stocks on the WallStreetBets thread on Reddit over the last 24 hours, according to data from Quiver Quantitative. Exchange-Traded Funds (ETFs) and other instruments have been excluded:
Most active US stocks before the bell
Below are the most active stocks with a valuation of at least $500 million before the bell, based on trading data taken from Bloomberg:
- Marathon Digital
- Riot Platforms
US premarket winners and losers
Here are the stocks worth at least $500 million experiencing the sharpest movements in premarket trade, according to data from Bloomberg:
Mr Cooper Group
Westinghouse Air Brake
Top US stocks to watch
Let’s have a look at the top stocks to watch today.
Microsoft impresses as Alphabet disappoints
It has been a mixed start to Big Tech earnings season, with artificial intelligence remaining a key theme.
Microsoft is up over 4% this morning and at a three-month high after beating expectations across the board. Hardware sales made a surprise return to growth and demand for software and cloud computing services was stronger than anticipated. The results from its cloud computing arm were particularly pleasing and have helped bolster Microsoft’s early lead in AI, reinforced by the disappointing figures out from rival Google.
Alphabet is down over 6% and at October-lows. The company beat expectations but markets were left disappointed by Google Cloud, which grew slower than forecast. The fact Microsoft posted stronger cloud numbers is also worrying investors that Google Cloud is not benefiting from AI as much as its larger rivals and struggling to gain ground.
Find out more about the results and view our technical analysis on both stocks in Microsoft Impresses as Alphabet Disappoints.
Meta stock: Q3 earnings preview
Meta is up next when it reports quarterly results after markets close today and is trading down 0.6% before the bell.
The company is expected to report the fastest growth out of all of Big Tech this season, partly thanks to easier comparatives that will flatter results. Ad pricing has taken longer to improve on social media platforms versus other avenues but markets are hoping it is close to bottoming-out before rebounding in 2024.
Meta’s social media business will need to impress this quarter if it wants to keep the limelight off the billions of dollars being funnelled into riskier and untested avenues. Meta has got markets excited with the launch of several new products in recent months, from the new Quest 3 headset and augmented reality Ray-Ban glasses to its new chatbots and AI products driven by its Llama large language model, but pressure could build to monetise and cut costs further if its core money-making businesses fail to deliver.
Find everything you need to know, including all the consensus numbers to watch out for and our latest technical analysis, in our Meta Q3 Earnings Preview.
Snap stock reverses and gives back strong gains
Snap surprised the markets after revenue returned to growth in the latest quarter, which should install confidence that its efforts to overhaul its advertising business is reaping rewards and progressing faster than Wall Street anticipated.
The stock initially leapt over 12% in after-hours trading upon releasing its results before reversing course. It is currently up 2.2% at $9.93 in pre-market trade this morning.
Sales had declined for two consecutive quarters but climbed 5.4% from last year in the third quarter to $1.19 billion. That was impressive considering analysts thought sales would suffer a 2% drop. The improvements made to its ad platform, new AI tools and its Snapchat+ subscription services are among the changes introduced by Snap in an effort to revive growth over the past year.
Snap said revenue should be around $1.32 billion to $1.38 billion in the fourth quarter, which was rosy compared to the $1.33 billion forecast.
Snap remained in the red and posted a net loss of $368.3 million, but that was smaller than the $397.8 million loss expected by analysts.
Several brokers raised their target price on Snap this morning, including Morgan Stanley to $7, Piper Sandler and JPMorgan to $9, RBC to $10 and Evercore ISI to $11.
Amazon: Will Q3 earnings show improving trends?
Amazon is down 1% ahead of results out tomorrow.
Trends appear to be improving across the board for Amazon. Growth now appears to be stabilising at AWS after experiencing a huge slowdown over 18 months. Ecommerce growth is accelerating again and consumers are still seeing value in its subscription services like Prime. Advertising is also powering ahead when others in the industry are struggling, allowing it to gain ground.
Amazon is forecast to report an 11.4% year-on-year rise in revenue to $141.56 billion and EPS is seen more than doubling to $0.60. Watch out for our more detailed preview out tomorrow morning.
Qualcomm to release new AI chips in 2024
Qualcomm is up 0.8% after announcing yesterday that it will release a new chip to power Microsoft laptops that use Windows that is designed to handle more tasks powered by artificial intelligence as competition heats up in the PC market.
The company said the new Snapdragon Elite X chip will be in laptops next year and the hope is that this will help Microsoft laptops regain some ground against Apple, which has gained ground in the market since releasing its own chips, according to Reuters.
That would also present more competition for Intel, which is down 0.8% in premarket trade. Intel shares briefly slipped to two-month lows this week as investors fret over intensifying competition in the PC chip market amid reports NVIDIA and AMD are among those teaming-up with Arm to develop new chips for personal computers that can handle more AI tasks.
NVIDIA is down 0.5% today, AMD is down 0.7% and Arm is trading down 0.2% as it continues to linger near its IPO price.
LG Energy adds to woes for EV stocks
South Korean firms LG Energy Solutions, which provides electric vehicle batteries to the likes of Tesla and General Motors, warned revenue growth will slow in 2024 due to weaker demand for EVs, warning that demand “could be lower than expectations”.
That could raise concerns that demand for EVs is waning despite the wave of price reductions we have seen, fuelling woes that more price cuts will be needed to keep factories busy. Several traditional automakers have signalled they are changing their approach to EVs. For example, GM is now focused on selling EVs profitably rather than hitting volume targets and has also scrapped plans to jointly develop new models with Honda.
Tesla is down 0.2% this morning and other smaller EV stocks are also under pressure, with Rivian and Lucid Group trading lower today.
Visa delivers beat and launches new buyback
Visa is down 1.3% despite beating expectations in the latest quarter and launching a new $25 billion share buyback programme.
The payments giant posted EPS of $2.27 per share, ahead of the $2.23 forecast. The company revealed payments volumes rose 8.7% in the period, describing consumer spending as “resilient”. The strongest card spending growth came from Central Europe, the Middle East and Africa. Visa said it is not assuming a recession in its outlook. Cross-border volumes jumped 16% to suggest travel demand remains strong.
Mastercard is down 1% and reports results later this week, when Wall Street forecasts it will report a 13.4% year-on-year rise in revenue to $6.52 billion and a 20.4% jump in EPS to $3.23.
Hilton buoyed by strong demand and higher prices
Hilton Worldwide shares are trading broadly flat this morning after delivering a beat and raise, as the hotelier continues to benefit from buoyant travel demand twinned with higher prices.
The company reported a 12.9% rise in revenue to $2.67 billion in the third quarter and that came in just ahead of the $2.64 billion forecast. Adjusted EPS of $1.67 was in-line with estimates. Much of the growth came from Asia, where prices per available room jumped 39% compared to just a 3% rise in the US.
Hilton said it is now anticipating adjusted EPS of $6.04 to $6.09 over the full year, up from its previous range of $5.93 to $6.06.
That beat, twinned with the report from Visa, should restore some confidence that the travel industry remains strong.
Boeing cuts 737 delivery goal
Boeing shares are up 3% despite lowering its delivery forecast for 737s this year as quality problems impact its top-selling model.
The company said it now expects to deliver 375 to 40 of the jets this year, down from its previous range of 400 to 450. It delivered 70 of them in the third quarter, down 20%. Boeing stressed the problems are temporary and said it was sticking to its long-term ramp-up of the model while reiterating its $3 billion to $5 billion free cashflow goal for the year.
Boeing posted an adjusted loss per share of $3.26 in the quarter, which was wider than the $2.95 expected by analysts, and burnt through $310 million in adjusted free cashflow, which was also more than anticipated.
T-Mobile joins peers by beating forecasts
T-Mobile US is up 1.5% after it became the latest telecoms giant to beat expectations by adding more subscribers and higher earnings, allowing its outlook to improve.
The company added 850,000 postpaid phone subscribers in the third quarter, higher than its rivals and well ahead of the 773,400 expected by analysts. Revenue was just shy of forecasts but adjusted EPS of $1.82 beat the $1.74 estimate.
T-Mobile said it now expects to add 5.7 million to 5.9 million net wireless subscribers over the full year, having raised the lower end of that range from a previous target of 5.6 million. It also upped the lower-end of its free cashflow goal for the year to $13.4 billion from $13.2 billion, with the top-end remaining at $13.6 billion.
Rivals AT&T and Verizon, which have already reported their results, are trading flat to 0.3% higher today.
RTX drops from 6-week high
RTX is up another 0.6% this morning after popping over 7% yesterday.
A number of brokers raised their target price on the defence stock following its well-received results out earlier this week, when it beat expectations and announced it was adding almost $10 billion to its share buyback programme.
Brokers were impressed by the enlargement of the share buyback and several raised their view this morning, including Wells Fargo to $82, Morgan Stanley to $86 and Citigroup to $87.
Lockheed Martin is trading marginally higher before the bell and Northrop Grumman is flat ahead of results out tomorrow, when it is forecast to report a 6.8% rise in quarterly revenue to $9.58 billion and a 1.8% decline in EPS to $5.79
Bitcoin keeps climbing
Bitcoin is up another 0.8% today and at fresh 17-month highs of $34,197 this morning as markets get increasingly excited about the prospect of a Bitcoin exchange-traded fund being approved.
Cryptocurrency stocks like Marathon Digital, Riot Platforms and Coinbase are trading mixed before the bell today.