Stock Futures Inch Lower On The Last Trading Day Of August
U.S. stock futures are moving slightly lower in the pre-market trading Tuesday, with major indexes heading for a win in August. Both S&P 500 and Nasdaq set fresh intraday records yesterday, powered by Big Tech stocks such as Alphabet (NASDAQ: GOOGL) and Apple (NASDAQ: AAPL). Stellar corporate earnings have provided valuation support and the basis for the stock market continues to be bullish.
“Despite rising geopolitical risks, peak economic growth concerns, and the Federal Reserve moving closer to tapering its asset purchase program, the steady ascent of stocks continues,” Keith Lerner, chief market strategist at Truist.
Investors are awaiting a key jobs report on Friday ahead of the Labor Day weekend. Economists surveyed by Dow Jones expect the creation of 750,000 jobs in August and a decrease in the unemployment rate to 5.2%. As of 8:15 a.m. ET, Dow futures are edging down by 0.05%. Meanwhile, S&P 500 and Nasdaq futures are declining by 0.06% and 0.03% respectively.
CrowdStrike To Report Q2 Earnings After The Stock Market Closes Today
CrowdStrike (NASDAQ: CRWD) is one of the most reputable cybersecurity companies in the space right now. It is also one of the stock market’s most discussed tech stocks after its inclusion in the Nasdaq-100 Index. With its leading position in AI cybersecurity, many investors are betting on this company for long-term secular growth. That’s partly a result of expectations for cloud businesses to continue growing in the years to come. Many are also hopeful that the increase of IT spending on cybersecurity will boost the company’s top line in the future.
The quarterly earnings update today could potentially act as a catalyst for CRWD stock. Recall that its revenue surged 93% in fiscal 2020 and rose 82% in fiscal 2021. Analysts estimate that the company is likely to report earnings per share of $0.09. Certainly, the bulls may hope that the company will not only beat the estimate but also provide positive guidance.
Over the longer term, it’s the fundamentals of CrowdStrike’s business that will drive investors’ returns. Fortunately, as a leader in the endpoint security space, CrowdStrike may just have what it takes. The need to safeguard devices such as desktops, laptops, and smartphones has become more pronounced during the pandemic. As a result, it should go without saying that CrowdStrike is enjoying soaring demand for its services. Investors considering nibbling on CRWD stock ahead of its quarterly earnings today should also realize the stock may arguably be priced to perfection. Any slight disappointment in one of the metrics could send its stock lower.
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Zoom Topped Estimates, But Growth Slows
Zoom Video Communication (NASDAQ: ZM) reported its first billion-dollar quarter after the closing bell Monday. As the economy reopens and some pandemic-related catalysts lose momentum, investors are expecting a deceleration in growth. Granted, its earnings forecast came in a little under estimates, sending Zoom stock lower in the pre-market trading today. From its second-quarter report, revenue came in 54% higher year over year to $1.02 billion. For the upcoming quarter, though, Zoom is guiding to 31% growth.
However, there may be contrarians who believe that working from home is here to stay. That’s partly considering the rising cases of the Delta variant. Thus, the growth story may not be over yet for Zoom. In the quarter, Zoom announced its intent to acquire Five9 (NASDAQ: FIVN) for $14.7 billion. The target company’s cloud-based contact center solutions will strengthen Zoom’s value proposition with enterprise customers in the future. Also, the company announced the availability of Zoom events, which gives organizations the ability to hold premium online meetings.
While Zoom stock has been a pandemic winner, many have concerns about whether its growth is sustainable. Sure, the outlook isn’t exactly what many bulls have desired. But customers paying more than $100,000 in the trailing 12 months continue to grow. Comparing its performance to last year’s isn’t exactly fair as there’s a sudden influx of users due to the pandemic. With all that being said, would the post-earnings weakness in ZM stock present a good opportunity for long-term investors?
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PayPal Considers Launching Stock Trading Platform
After rolling out the option to trade cryptocurrencies last year, PayPal (NASDAQ: PYPL) is now exploring a possible stock-trading platform in the US. As part of the move, the company recently hired brokerage industry veteran Rich Hagen to head its “Invest at PayPal” division. For those unfamiliar, Hagen was the co-founder of online brokerage TradeKing. Hagen’s Linkedin page says he is “leading PayPal’s efforts to explore opportunities in the consumer investment business”.
PayPal’s move comes amid a retail trading renaissance. According to estimates from JMP Securities, more than 10 million new retail investors have entered the market in the first half of 2021. That number roughly matched last year’s record level. The surge in retail trading frenzy coupled with the stay-at-home orders during the pandemic has led to a surge in interest in the stock market.
Meanwhile, Robinhood Markets (NASDAQ: HOOD) stock came under pressure from PayPal’s announcement. But that’s not all, the commission-free trading platform also faces a potential ban of its controversial practice of payment for order flow. According to SEC Chairman Gary Gensler, the back-end payment Robinhood receives for directing clients’ trades to market makers has an inherent conflict of interest. Nevertheless, could the dip present an opportunity to buy HOOD stock?
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Earnings Winding Down
As the second-quarter earnings season winds down, it is noteworthy that many companies have topped estimates. That comes amid a recovery in the business environment for these companies. For those looking to catch names reporting before the opening bell, there are a few notable Chinese stocks on the deck. They include the likes of Futu (NASDAQ: FUTU)and NetEase (NASDAQ: NTES).
Subsequently, if post-market earnings are more to your interest, there are also a few big names on tap. They include CrowdStrike Holdings, PVH (NYSE: PVH), Ambarella (NASDAQ: AMBA), and Caleres (NYSE: CAL). All in all, whether it is rethinking your portfolio when the market is at its all-time high or simply keeping up with a few earnings, there is a lot to keep you occupied as we kick start the day.
