Stock Market Futures Edge Up As More Major Corporate Earnings Roll In
U.S. stock futures are moving up in early morning trading today. This could be, in part, due to the ongoing flurry of big companies providing earnings updates. For the most part, this continues to be the case despite looming broad-based headwinds for markets this year. If you have been keeping up with the latest stock market news, these will come as no surprise to you. This would be referring to interest rate hikes, supply constraints, and the general normalization of the economy post-pandemic.
Explaining all of this is Jack Manley, JPMorgan (NYSE: JPM) Asset Management global market strategist. He says, “Right now what people are looking for in the markets is earnings, because we know moving through 2022 that earnings are going to come under pressure as margins contract and as the economy slows down. It’s why we’re concerned about things like rising interest rates, … elevated inflation prints, [and] a policy misstep this year.” Manley adds, “The way we’re going to be able to avoid any of those potential pitfalls is through earnings.” Alongside all of this is a slew of noteworthy news to consider in the stock market today. As of 5:19 a.m. ET, the Dow, S&P 500, and Nasdaq futures are trading higher by 0.61%, 0.75%, and 0.95% respectively.
Chipotle (CMG) Stock Gains On Fourth Quarter Earnings Beat
Chipotle Mexican Grill (NYSE: CMG) is also in focus in the stock market today. This is mostly thanks to its latest quarterly financial update. In it, the company reported solid figures across the board. Namely, Chipotle is looking at an earnings per share of $5.58 on revenue of $1.96 billion for the quarter. This translates to year-over-year gains of about 60% and 22% respectively. On the earnings front, Chipotle handily topped Wall Street estimates of $5.25. At the same time, the company is also looking at sizable growth across its key metrics. This is apparent as its net sales and same-store sales gained by 22% and 15.2% respectively.
According to CEO Brian Niccol, the company’s strong “pricing power” remains a key growth driver. Looking forward, Chipotle is looking to open upwards of 235 new locations throughout 2022. Also, Niccol notes that Chiptole is looking to make drive-thru services available at over 80% of its locations by 2023. Because of all this, CMG stock is now trading higher by over 6% in pre-market trading today.
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Meta Extends Losing Streak, Falls Below $600 Billion Market Cap And Out Of Antitrust Territory
Among the FAANG companies, Meta Platforms (NASDAQ: FB) appears to be feeling the most pressure in the stock market now. This comes as the social media tech giant is handling ongoing disputes with the European Union (EU). In essence, the current issue is regarding international data transfer laws, impacting how Meta moves data into the U.S. To the extent that Meta is even suggesting that it would have to cut access to Facebook and Instagram in the region should things remain unchanged. As a result of all this, FB stock is experiencing comparably worse year-to-date losses than its peers.
On top of that, the company’s market capitalization is also dipping below the $600 billion mark. This would be a first since May 2020. However, some could consider this advantageous to Meta now. This would be due to $600 billion being the threshold for “covered platforms” under antitrust bills. Should Meta remain at its current market cap, it would, in theory, be able to avoid additional legislative pressures. This would come in the form of potential antitrust hurdles. The likes of which its larger competitors would have to deal with. Considering this alongside European regulators looking into implementing new data transfer laws, investors could be watching FB stock closely.
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Disney Earnings Preview: What To Know
Meanwhile, entertainment goliath Walt Disney (NYSE: DIS) is set to report its first fiscal quarter earnings after the closing bell today. For the most part, this is in a time where concerns regarding its Disney+ streaming platform growth are rising. Before going into the details, here is what Wall Street expects. For starters, analysts are expecting Disney to post earnings of $0.54 per share. This would mark a sizable year-over-year increase of about 68%. Additionally, forecasts for Disney’s total revenue for the quarter are also pointing towards both year-over-year and quarter-over-quarter gains. While Disney may be seeing some deceleration in streaming growth, analysts appear to be bullish on its in-person entertainment offerings.
For one thing, this is apparent seeing as revenue expectations for its Parks, Experience, and Products (PEP) section is notable. In detail, analysts currently see Disney raking in a total PEP revenue of $6.5 billion this quarter. Should this be the case, it would indicate a significant 80% year-over-year surge. With more consumers returning to Disney’s theme parks, and resorts, this will likely be a key metric to watch today. After all, this segment of Disney’s operations would be on the rise amidst widespread vaccine rollouts. With all this in mind, DIS stock would be in focus in the stock market today.
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Microsoft Reportedly Looking To Buy Cybersecurity Company Mandiant
In other news, a report from Bloomberg is highlighting Microsoft’s (NASDAQ: MSFT) latest acquisition plans. According to the post, Microsoft is keen on buying cybersecurity company Mandiant (NASDAQ: MNDT). Following this news, investors appear to be flocking to MNDT stock in the stock market now. Now, it is important to note that these are merely talks and mentions. The report highlights that all this may not necessarily end in an offer. Nonetheless, even the possibility of Microsoft acquiring the firm seems to be catching investors’ attention now.
Before we go on, a bit of background on Mandiant. The company provides cybersecurity services primarily via its Mandiant Advantage Software-as-a-Service (SaaS) platform. Through its core SaaS offerings, Mandiant brings a holistic combination of expertise, threat intelligence, and adaptive tech to the table. Not to mention, the company also posted its latest quarterly earnings report yesterday. In it, Mandiant raked in a total revenue of $133 million, a sizable 21% year-over-year increase. As the world continues to live with the pandemic, cybersecurity firms like Mandiant will likely remain busy. That would be due to people being online more often than ever now. Should Microsoft decide to make a play on the company, both parties would arguably have their fair share of benefits.
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