US stock futures fell on Friday as investors reacted to the latest quarterly results, lingering inflationary pressures, and Treasury bonds advanced.
Amazon’s earnings beat estimates but put the brakes on tech optimism after investors were rattled by talk of slowing cloud growth. Pinterest issued a weak outlook for the current quarter, and Snap Inc missed Q1 revenue expectations. Intel shares, on the other hand, rose after the company said the data center business was improving.
By 8:26 AM, Dow Jones futures were down 118 points, or 0.34%. S&P 500 and Nasdaq-100 futures fell 0.31% and 0.26%, respectively.
Treasuries recouped some of Thursday’s losses, with the benchmark 10-year yield at 3,454%. The policy-sensitive two-year rate remained above 4%.
New York’s indices jumped in Thursday’s trading session, driven by Big Techs’ corporate balance sheets and a lower-than-expected GDP for the US economy. Added to Microsoft and Alphabet’s balance sheets, Meta had released numbers that also surpassed analysts’ estimates. Regarding US GDP data, the main result was a little lower than expected, but showed growth in consumption and inflation. The deceleration was driven mainly by the drop in inventories. The GDP deflator rose to 4% against expectations of a slowdown to 3.7%, with an increase also in the core. Household consumption, in turn, rose 3.7%, with an increase of 6.5% in the consumption of goods in the annual comparison.
On Thursday, the Dow Jones rose 524.29 points, or 1.57%, to close at 33,826.16 points, while the S&P 500 rose 1.96% to close at 4,135.35 points. Both indices marked the best day since January. The Nasdaq Composite surged 2.43% to close at 12,142.24 points.
For the FOMC decision, the result is bittersweet: it shows some deceleration in the economy, but with persistent inflation. The CME FedWatch tool points to an 88% chance of a quarter-point hike next Wednesday by the US central bank.
The price index of personal consumption expenses excluding food and energy increased by 0.3% in the month, in line with the Dow Jones estimate. On an annual basis, the so-called core PCE increased by 4.6%, slightly above the expectation of 4.5% and down 0.1 percentage point from the previous month. Including the volatile components of food and energy, PCE was also up 0.1% on the month, which equates to a 4.2% year-on-year increase, up from 5.1% in February. That measure peaked at around 7% in June 2022, the highest level since December 1981.
In another key measure of inflation, the employment cost index rose 1.2% in the first quarter, above the 1% estimate.
The PCE data will be more definitive for the future of the monetary policy than the GDP. Other US economic indicators released today will be the Chicago PMI, Michigan Consumer Sentiment Index, Baker Hughes Poll Count.
Ahead of Friday’s quarterly results, traders are watching gains from Exxon Mobil, Chevron, also Colgate-Palmolive, Cameco, Charter Communications, among others.
Wall Street Corporate Highlights for Today
First Republic Bank (NYSE:FRC) – Shares in First Republic were up more than 5% premarket after a report that the Federal Deposit Insurance Corporation (FDIC), the Treasury Department and the Federal Reserve were in discussions with banks and even with private equity about a rescue solution for the troubled creditor.
Accenture (NYSE:ACN) – Accenture has agreed to acquire Einr AS, a Norwegian business consulting firm specializing in high-volume logistics solutions using SAP technologies. The acquisition will further enhance Accenture’s SAP capabilities, helping Accenture to accelerate supply chain reinvention for organizations in the retail and consumer electronics sectors. The terms of the transaction were not disclosed.
Netflix (NASDAQ:NFLX) – Netflix lost more than a million users in Spain in the first three months of 2023 when it introduced a monthly fee of €5.99 for households sharing the password, according to the research group market share Kantar, a sign that the streaming giant’s crackdown on password-sharing may face resistance.
Berkshire Hathaway (NYSE:BRK.B) – Companies indirectly owned by Berkshire Hathaway have filed for bankruptcy. Whittaker, Clarck & Daniels, Brilliant National Services, La Terminals and Soco West have filed for Chapter 11 bankruptcy protection. Berkshire Hathaway said Thursday that its subsidiaries were not involved in Whittaker’s past operations and had not issued any insurance for the company.
Earnings
Amazon (NASDAQ:AMZN) – Amazon fell about 2.3% in premarket reversing a stock jump in extended trading when it reported a hit in first-quarter revenue. The online retail giant posted revenue of $127.4 billion, higher than the consensus estimate of $124.5 billion published by Refinitiv. However, Amazon has warned that growth in its cloud computing business continues to cool, dashing hopes that the company’s most profitable division is facing a lackluster environment for technology spending.
Exxon Mobil (NYSE:XOM) – Shares rose 1% premarket after the oil giant posted a record first-quarter profit. Exxon Mobil’s adjusted earnings per share came in at $2.83, beating analyst estimates of $2.59 by Refinitiv. Its revenue of $86.56 billion also beat the expected $85.41 billion.
Chevron (NYSE:CVX) – Shares of Chevron fell slightly premarket despite the hit to first-quarter earnings. The oil company’s adjusted profit per share was US$ 3.55 against the US$ 3.41 expected by analysts consulted by Refinitiv. Revenue also outperformed, but net income for Chevron’s oil and gas division fell 25% as oil prices fell.
Intel (NASDAQ:INTC) – Intel shares rose more than 5% premarket after the semiconductor company posted its biggest quarterly loss ever. However, it beat analysts’ expectations, posting a first-quarter loss of 4 cents a share on revenue of $11.7 billion. Analysts polled by Refinitiv had forecast a loss per share of 15 cents on revenue of $11.04 billion.
Snap Inc (NYSE:SNAP) – Social media shares fell more than 18% premarket after the company’s first quarter results. Snap posted revenue of $989 million in the first quarter, down from an estimated $1.01 billion, according to data from Refinitiv. On the other hand, Snap gained 1 cent per share excluding items, which was better than the prediction of losing 1 cent per share.
Pinterest (NYSE:PINS) – Pinterest shares are down more than 13% premarket. The image-sharing company beat expectations in the first quarter, according to consensus estimates from Refinitiv. However, expectations for revenue growth in the second quarter were disappointing.
Capital One (NYSE:COF) – Shares fell 3.3% after disappointing quarterly results. The company earned an adjusted $2.31 per share, well below StreetAccount’s forecast of $3.75 per share. Capital One executives cited borrowing difficulties over the quarter.
Boston Beer (NYSE:SAM) – Boston Beer shares were flat premarket after the brewery behind the Samuel Adams and Twisted Tea brands failed to meet analyst expectations on earnings, according to Refinitiv data.
First Solar (NASDAQ:FSLR) – Solar stocks fell more than 8% premarket on disappointing first-quarter results. The company reported earnings of 40 cents a share on $548 million in revenue. Analysts had expected earnings per share of $1.02 on revenue of $718 million, according to Refinitiv.
T-Mobile (NASDAQ:TMUS) – T-Mobile US stock was flat premarket after the telecom company’s first-quarter revenue was lower than expected, according to Refinitiv.
Cloudfare (NYSE:NET) – Cloudfare is down nearly 25% premarket after posting weaker-than-expected Q1 revenue and issuing a lackluster forecast for Q2 and full year.
L3 Harris Technologies (NYSE:LHX) – L3Harris Technologies beat first-quarter earnings and revenue expectations. The defense contractor posted Q1 earnings of $2.86 per share, ex-items, on revenue of $4.47 billion. Analysts polled by Refinitiv had expected earnings per share of $2.85 and revenue of $4.25 billion.
Amgen (NASDAQ:AMGN) – Amgen disappointed first-quarter revenue expectations. The biotech company posted revenue of $6.11 billion, below estimates of $6.17 billion by analysts polled by Refinitiv. However, Amgen beat earnings expectations.
Fair Isaac (NYSE:FICO) – Shares in Fair Isaac fell 0.5% premarket after missing earnings estimates for its second quarter, although it beat revenue expectations. The data analytics firm behind the FICO score reported adjusted earnings of $4.78 per share, weaker than the consensus estimate of $5.04 per share, according to Refinitiv.
Gilead Sciences (NASDAQ:GILD) – Shares of the biopharmaceutical company rose about 0.7% premarket after reporting disappointing earnings but beating revenue expectations, according to Refinitiv data.
Mondelez International (NASDAQ:MDLZ) – Mondelez International rose 3% premarket after reporting first-quarter results that beat expectations, according to Refinitiv consensus expectations.
Alteryx (NYSE:AYX) – Software company Alteryx is down 18% in premarket trade. The company reported an adjusted loss of 19 cents per share, while analysts polled by StreetAccount estimated a loss of 26 cents. Management told investors the company planned to lay off 11% of staff as part of a cost-cutting plan.