Stock Futures Edging Up To Close The Week
The U.S. stock futures were edging up on Friday morning. They are holding near record levels as investors digested a mixed set of economic data and earnings reports. The stock market continues to break new highs. Optimism over both the pace of economic recovery and strength in corporate earnings results. Weekly jobless claims came in at 375,000 last week. That matched estimates and declined for a third straight week. This supports the narrative of a strengthening job market.
“Economic growth is running at the best pace we have seen in decades and that is a tremendous tailwind for earnings,” said Russ Koesterich, portfolio manager of the global allocation fund at BlackRock.
The current quarterly earnings season showed U.S. corporate earnings, revenues, and profit margins expanding at their strongest pace in the past decade. That is since FactSet began tracking these metrics in 2008. Whether the stock market bull run will continue is anybody’s best guess. However, it is also worth pointing out that it will be hard for companies to sustain such momentum indefinitely. The Dow, S&P 500, and Nasdaq futures are all trading in the positive territory, moving 0.11%, 0.05%, and 0.01% higher respectively as of 7:01 a.m. ET.
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Disney’s (DIS) Stock Surging As Theme Parks Returns To Profitability
Walt Disney’s (NYSE: DIS) stock is surging in the pre-market today. This came after Disney reported blowout fiscal third-quarter earnings after the closing bell on Thursday, topping expectations across the board. It’s all good news for DIS stock investors as the company also returned to revenue growth for the first time in five quarters. As Delta variant cases continue to surge, it’s unclear how Disney’s theme parks will be affected. It goes without saying that the resurrection of the theme park industry is essential to Disney’s success. That is because it accounts for the majority of its revenue. Revenue at Disney’s parks, experiences, and products segment jumped 307.6% to $4.3 billion. That increased from $1.06 billion during the same period last year.
Also, this was the first quarter that all of Disney’s global theme parks have been open since the start of the pandemic. What’s more surprising was that the company was able to beat the subscriber estimates for its streaming unit, Disney+. The numbers came in at 116 million, beating the estimates of around 114.5 million in its third quarter. Perhaps, the experiment of taking a Marvel title to the streaming platform after going to the theatre worked.
“We ended the third quarter in a strong position, and are pleased with the Company’s trajectory as we grow our businesses amidst the ongoing challenges of the pandemic,” said CEO Bob Chapek. “We continue to introduce exciting new experiences at our parks and resorts worldwide, along with new guest-centric services, and our direct-to-consumer business is performing very well, with a total of nearly 174 million subscriptions across Disney+, ESPN+ and Hulu at the end of the quarter, and a host of new content coming to the platforms.”
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Moderna & BioNTech Stocks Are Rebounding Amid A Booster Update
A lot of the attention will be on Moderna (NASDAQ: MRNA) and BioNTech (NASDAQ: BNTX) today as the FDA authorized booster shots for people with weakened immune systems. Studies suggest that a third vaccine shot might help shield patients that are immunocompromised from the highly contagious variant. These vaccine stocks started the week on a strong note. That was amid growing enthusiasm over technology used in their coronavirus vaccines. They seem promising on the potential to help fight other diseases such as cancer and malaria.
“Immunocompromised individuals are vulnerable,” Fauci said Thursday. “It is extremely important for us to move to get those individuals their boosters, and we are now working on that, and we will make that be implemented as quickly as possible. … It is a very high priority.”
No Covid vaccine is 100% effective against infection, and we get that. With its already bullish sales projections, adding a third booster could help already strong sales for these vaccine stocks. Today, you might invest in these vaccine stocks for its COVID-19 treatment. But what’s really exciting are the vaccines the company hopes to introduce over the next decade. With all that in mind, would it make sense for investors to buy these vaccine stocks in the stock market today?
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Oil Prices Slip As IEA Warns Of Potential Slowdown In Demand Recovery
Oil prices continued to slide on Friday. This came after the IEA warned that demand growth for crude and its products had slowed sharply. Concerns have resurfaced with the acceleration of the COVID-19 delta infection rate worldwide. As a result, this has forced governments globally, particularly China, the world’s second-largest oil consumer, to look set to reduce mobility and oil use.
“Although OPEC left its demand forecast unchanged, we think that the near-term demand outlook has deteriorated, which may mean that the group adjusts down its supply plans at its next meeting,” Caroline Bain, chief commodities economist at Capital Economics.
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Earnings Winding Down For The Week
Fridays typically see fewer earnings reports as we wind down the week. But that doesn’t mean there’s nothing to look forward to today. With a lot of positive momentum from healthcare stocks in the stock market today, it won’t hurt to take a closer look at some of the up-and-coming biotech stocks. Some of the biotech companies reporting prior to the opening bell today include Bio-Path (NASDAQ: BPTH), Forma Therapeutics (NASDAQ: FMTX), and Medicenna Therapeutics (NASDAQ: MDNA).
Some of the most highly-anticipated earnings reports after the closing bell on Thursday topped Wall Street’s expectations. For instance, Airbnb (NASDAQ: ABNB) beat consensus estimates for its revenue and bookings. But it warned about the expected volatility from the delta variant. Meanwhile, SoFi (NASDAQ: SOFI) sank as profit outlook came up short. So, whether it is keeping up with the downturn in oil prices or simply following the earnings reports, there should be enough to keep you occupied as the week winds down.
