Stock Market Futures Edging Up Ahead Of October Jobs Report
Stock market futures were marginally higher in early morning Friday ahead of the highly anticipated October employment report. Consensus estimates call for 450,000 jobs added, according to Dow Jones. That would be the largest rise in three months, but below the 2021 average. At the same time, the market is digesting the Fed’s plan to begin tapering its asset purchase program by the end of the month. Additionally, investors saw weekly jobless data totaling 269,000 last week, the lowest ever recorded during the pandemic. If anything, recent developments appear to suggest that the economic recovery is taking shape.
“Friday’s Payrolls numbers become even more significant, as it is the first full month of hiring following the expiration of federal enhanced unemployment benefits, while public health has simultaneously improved and labor demand has remained strong,” Chris Hussey, Managing Director at Goldman Sachs’
Meanwhile, the stock market continued to power higher, with Nvidia (NASDAQ: NVDA) and Tesla (NASDAQ: TSLA) pushing the Nasdaq higher. Impressively, Nvidia tops $700 billion valuation for the first time as optimism grows for the metaverse opportunity. As of 6:40 a.m. ET, the Dow, S&P 500, and Nasdaq futures are trading higher by 0.03%, 0.23% and 0.51% respectively.
Peloton (PTON) Stocks Fall Amid Wider-Than-Expected Loss
Peloton (NASDAQ: PTON) stock is tumbling in pre-market trading today. This comes after the company reported weakening sales growth and a wider-than-expected loss in its fiscal first quarter. For the quarter, the company reported a net loss of $376 million. That compares with net income of $69.3 million in the prior year quarter. The company’s revenue came in 6% higher to $805.2 million from $757.9 million a year earlier. But it missed estimates of $810.7 million.
“We anticipated fiscal 2022 would be a very challenging year to forecast, given unusual year-ago comparisons, demand uncertainty amidst re-opening economies, and widely-reported supply chain constraints and commodity cost pressures,” Chief Executive Officer John Foley said in a letter to shareholders.
Clearly, the reopening of the economy has put a significant dent on the company’s growth. People are no longer trapped at home and starting to work out in gyms, or simply running in the park. What’s more, the company faces increasing competition as there are more at-home options coming from a number of competitors. Despite the company’s efforts to cushion the blow by cutting the price of its popular bike and ramping up its ad spending, its sales number was coming up short.
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Cloudflare, A Winner In The Cloud Computing Market That Keeps Winning
Cloudflare (NYSE: NET) reported its third-quarter earnings after the closing bell Thursday. For those unfamiliar, Cloudflare provides an integrated cloud-based security solution for a range of platforms. For the quarter, total revenue came in 51% higher year over year to $172.3 million. This is far beyond both management’s guidance of between $165 million and $166 million. More impressively, the company managed to achieve non-GAAP profitability for the first time, one year ahead of its original timeline.
It is also noteworthy that the company added a record number of large customers in the third quarter. These refer to those who spent more than $100,000 annually. Cloudflare added around 170 large customers during the quarter. Not only was this a record amount, but it was substantially higher than the company’s previous quarterly record of 140 customers. As a result, the company now has a total of 1,260 large customers.
Topping off the quarterly update was an upbeat outlook for the upcoming quarter. The company projected its fourth-quarter revenue to be in between $184 million to $185 million. This was both well above Q3 levels and analysts’ average forecast for fourth-quarter revenue of $175.7 million. Furthermore, with the strings of innovation the company has unveiled recently, Cloudflare could still be looking at a long growth runway ahead. The question is, would you buy NET stock after its recent run up?
Penn National Stock Falls On Dave Portnoy News, DraftKings’s Earnings On Tap
Sports betting stocks have been in focus as more states are offering some form of legalized sports betting. While there’s a lot of growth potential in the online gambling industry, some are gaining the attention for the wrong reason. For instance, Penn National Gaming (NASDAQ: PENN) stocks tumbled to its lowest level for the year on Thursday after the company’s third-quarter earnings fell short of expectations. For the quarter, the company reported net income of $86.1 million. That is down from $141.2 million in the same period one year earlier.
While the quarterly revenue of $1.5 billion was in line with expectations, it wasn’t enough to fend off the damages from the earnings miss. Adding salt to the injury is the publication of an article accusing Barstool Sports’ front man David Portnoy of sexual misconduct. With Penn National’s 36% stake in Barstool, it’s understandable why such news could lead to a sell-off on Thursday.
Similarly, shares of DraftKings (NASDAQ: DKNG) also fell on Thursday as investors started to question the company’s growth potential. That’s because on Wednesday, MGM Resorts (NYSE: MGM) said that it held the No.1 market-share position for sports wagering and online gambling in the U.S. in August. This indirectly suggests that DraftKings could be losing market share. But the trend could reverse should DraftKings report a strong quarter this morning before the opening bell.
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Pre-Market Earnings To Watch In The Stock Market Today
With the closing of this week of the earnings season, investors remain as busy as ever. For those keen to catch companies reporting before the opening bell, there is no shortage of names to note. The list includes DraftKings, Coinbase (NASDAQ: COIN), Canopy Growth (NASDAQ: CGC), Exela (NASDAQ: XELA), and Enbridge (NYSE: ENB), just to name a few. By and large, it seems like investors can expect another interesting day of earnings ahead, to say the least. Whether it is digesting the October jobs report or simply following a barrack of earnings, there is enough to keep you occupied as we wrap up the week.
