Stock Futures Edge Higher Ahead Of Fed’s Jackson Hole Symposium
U.S. stock futures are pointing to a rebound in the stock market today after major indices took a breather yesterday. Investors are looking for more details into the central bank’s plans to taper monetary stimulus. Fed Chair Jerome Powell is scheduled to speak at the central bank’s annual Jackson Hole summit at 10 a.m. ET today. Investors are also expecting a consumer sentiment reading to be released this morning. Also prompting caution in the stock market today are the fresh geopolitical concerns taking place in Afghanistan.
“Markets don’t like uncertainty and the uncertainty in Afghanistan is high and feels like it’s rising,” said Bob Doll, chief investment officer of Crossmark Global Investments.
Admittedly, the Delta variant is still a major risk clouding the outlook of the economy. Nevertheless, many investors are expecting Powell to take somewhat of a cautious and patient approach when it comes to scaling back the bond purchase program. As of 7:05 a.m. ET, the Dow, S&P 500, and Nasdaq futures are edging up by 0.24%, 0.29% and 0.35% respectively.
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Meme Stock Mania Sent Support.com (SPRT) Stock To The Cloud
The onset of the COVID-19 pandemic has provided a catalyst for many tech stocks, and one of them is Support.com (NASDAQ: SPRT). For those uninitiated, the company provides technical support services and cloud-based software solutions. Put simply, this is the company your company goes to if you need a remote help desk provider. Hence, it should go without saying the pandemic has acted as a catalyst for the company.
But today, the meme stock mania and apparent cryptocurrency connection have induced an equally astonishing rally in SPRT stock. Granted, the company’s merger with Greenidge Generation Holdings is likely to generate some interest in Support.com. That’s because the company claims that it is the first 100% carbon-neutral Bitcoin transaction processor in the US. With the growing awareness of the negative environmental impact of cryptocurrency mining, the company is well-positioned to benefit.
Admittedly, SPRT stock has been on a strong rally and that might have to do with the BTC price rebound. However, investors should also note that the company’s recent quarterly financial results weren’t stellar. Revenue came in 23% lower with a net loss of $800,000 in its latest quarter. As a result, it has led to a sky-high short interest, which has attracted the attention of the Reddit traders. Now that it has garnered so much attention among Reddit investors, would you consider SPRT stock the best meme stock to buy in the stock market now?
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Peloton (PTON) Stock Tumbles After Earnings Disappoint
Peloton Interactive (NASDAQ: PTON) reported its fiscal fourth-quarter loss on Thursday, citing revenue growth slowed dramatically. The company also warned that its earnings will be hurt in the near term because it’s slashing the price of its Bike machine by about 20%. Peloton will also begin to focus more of its business toward treadmills moving forward. Sure, many would consider PTON stock a prime stay-at-home bet given the nature of its offerings. But the company may need to rethink its strategy on how to sign up more customers.
“Competition is rising across connected fitness,” BMO Capital Markets analyst Simeon Siegel said. “Peloton discounting the Bike and upping marketing is a clear signal that the cost to acquire customers is rising after being the only player in the market last year.”
Earlier this week, the company revealed it will finally be debuting its Peloton Tread in the U.S., U.K., and Canada. At launch, the Tread will be priced at $2,495, considerably lower than the rest of the company’s offerings. This would be a smart play as Peloton attempts to cater to a wider market. No one would know if the discounting strategy could work at this point in time. But if it does, would the post-earnings weakness make PTON stock a worthy bet?
Gap Crushed Earnings Estimates & Announced Acquisition To Boost Online Shopping
Not all retailers have been nimble enough to take advantage of the pandemic to accelerate turnaround plans. But Gap (NYSE: GPS) managed to crush earnings estimates. And its stock is jumping in the pre-market trading Friday. The company reported a second-quarter net income of $0.67 per share, well ahead of Wall Street’s estimates of $0.45 a share. What’s more, the company also raised guidance for the full year. That highlights the recovery for apparel retailers from the early-pandemic slowdown.
“Our talented teams delivered our highest second-quarter net sales in over a decade,” CEO Sonia Syngal said in the earnings release. “Our strategy is driving growth as evidenced by continued strength at Old Navy and Athleta, Gap Brand’s second consecutive quarter of positive 2-year comparable sales in North America, and momentum gaining at Banana Republic.”
There’s no question online shopping has helped many retailers stay afloat during this pandemic. While it offers great conveniences to consumers, the experience of buying clothes online is still far from ideal for many. That’s because these clothes often don’t fit well. Or they simply don’t look good as many would expect looking at the online images. Now, Gap has acquired Drapr, a 3D avatar and e-commerce startup. This would allow consumers to dress themselves up virtually and judge how the clothes could look and fit before buying. Considering the strong earnings beat and strategic acquisition, I can understand why investors are eyeing GPS stock in the stock market today.
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Second-Quarter Earnings Are Largely In The Rear View Mirror
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, retail names are on tap today. This includes the likes of Big Lots (NYSE: BIG) and Hibbett Sports (NASDAQ: HIBB).
Zoom Video Communications (NASDAQ: ZM) will be one of the few companies to report earnings next week. The video conferencing company could see its earnings rising over 26% and revenue jumping nearly 50% in the last quarter. All in all, whether it is keeping tabs on the Fed, digesting the geopolitical impact from Afghanistan, or simply keeping up with a few earnings this morning, there is a lot to keep you occupied as the week winds down.
