Stock Market Futures Edge Higher Ahead Of Jobless Claims Data
U.S. stock futures are pointing to further gains when the stock market opens on Thursday morning. This came after the Federal Reserve kept interest rates unchanged while signaling no immediate plan to remove stimulus policies. More members of the Federal Open Market Committee also pulled forward their expectations for when interest rates will rise. For investors today, a lot of the attention will be on the initial jobless claims number. Amongst other economic data, the September Manufacturing PMI and Services PMI will also catch the attention of some investors.
“Although there may be some additional turbulence this fall, we are constructive on the US economy in general and believe that any dips would be worth buying as the fundamentals are still sound and recession appears to be more than a year away at this point,” -Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.
Meanwhile, fintech disruptors Robinhood Markets (NASDAQ: HOOD) and SoFi Technologies (NASDAQ: SOFI) made big waves in the stock market this week. On one hand, we have Robinhood’s announcement that it will launch cryptocurrency wallets as Bitcoin becomes a significant part of its business. On the flip side, SoFi got a positive upgrade from Jefferies (NYSE: JEF) while waiting to lay its hand on the federal banking charter. This would allow SoFi to expand its capacity for lending. As of 7:15 a.m. ET, the Dow, S&P 500, and Nasdaq are up by 0.46%, 0.50%, and 0.53% respectively.
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BlackBerry (BB) Stock Rallies On Cybersecurity Boost
Many investors don’t even try to understand why BlackBerry (NYSE: BB) is still worth investing in after it exited its smartphone business. Admittedly, BlackBerry stock caught many traders’ attention earlier this year when the infamous subreddit WallStreetBets triggered a buying spree. Even though the hype has cooled down significantly, that doesn’t stop some long-term investors away from investing in this company.
Now, shares of BlackBerry are surging higher in pre-market trading today. This came after the security software provider reported a better-than-expected loss and topped quarterly revenue estimates on Wednesday. In detail, the total revenue for the second quarter of fiscal 20222 was $175 million. Another highlight to watch is the company’s Internet-of-Things (IOT) revenue. This section of the company brought in $40 million for the second fiscal quarter, with a gross margin of 83% and annual recurring revenue (ARR) of $89 million. On top of that, BlackBerry has appointed John Giamatteo as President of the Cyber Security business unit. With this strategic hire, the company adds significant industry experience.
“I’m excited to be joining BlackBerry and to be leading the Cyber Security business unit. Never has the threat of cyberattacks been higher, nor more in the minds of management. BlackBerry’s AI-driven, prevention-first technology is well placed to scale to meet the constantly evolving cybersecurity needs of companies everywhere. I’m very positive about the opportunities that we have as a company.“- John Giamatteo, President of Cyber Security of BlackBerry.
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Nike Set To Report Earnings After The Stock Market Closes Today
Investors have high expectations heading into Nike‘s (NYSE: NKE) earnings in the stock market today. After the footwear and sports apparel giant reported blowout earnings in the previous quarter, many investors are hoping that the company will extend its positive momentum. Adding the enthusiasm is the stellar earnings from lululemon athletica (NASDAQ: LULU). Lululemon boosted its growth outlook for the second time consecutively this year. In detail, it predicted that sales will jump as high as $6.3 billion this year.
Naturally, investors would expect Nike to see a similar trend. Recall from its previous quarter, revenues were up 96% year-over-year. The strong revenue was driven by a significant increase in digital sales. Impressive growth numbers aside, cash holdings rose by an incredible $4.7 billion. That would put Nike in a strong position to drive sustainable long-term growth as it continues to invest in innovation and expand its online channels. Whilst all these are great news for Nike, there are also some risks that investors should watch out for in the company updates.
It’s likely that consumer companies like Nike had to endure sudden cost spikes as raw materials and other miscellaneous costs were all rising together. The good news here is, though, that the company might easily pass the costs to its consumers through higher prices. Other than that, Nike may still face inventory and supply chain challenges as it has to compete with other retailers to fill its distribution network. Investors should watch out if the management will address these potential risks in its earnings call. With Nike appearing to be showing no signs of slowing, I’m not surprised why investors are getting all excited ahead of its earnings.
Can Costco’s Stellar Earnings Growth Continue?
World’s second-biggest retailer Costco Wholesale (NASDAQ: COST) is another retail company reporting its earnings after the closing bell today. If you look at its financial performance, you would know that this year is one of Costco’s strongest fiscal years in history. The new Delta variant has led to another round of stockpiling by customers. That has led Costco to reintroduce purchase limits on certain products in late August. But today’s announcement will show much pricing pressure the retailer has endured.
Investors are waiting to see if Costco can continue its stellar performance when the company reports today. One key metric to watch is Costco’s comparable sales growth. This could gauge growth in sales generated by both physical stores and digital channels. Wall Street is expecting quarterly comparable sales growth to decelerate from the previous quarter, but maintain a fast pace of growth compared to the previous year period.
Another key metric Wall Street is eagerly looking forward to seeing is a potential increase in Costco’s annual membership fee. That’s because a boost in that will translate directly into higher earnings. Similar to Nike, Costco also faces inflationary pressure for its products. But unlike the sports apparel giant, Costco’s scale allows it to offer significantly lower prices in the current economic environment. If anything, this would make its membership more valuable. With all these in mind, many would-be keeping an eye on COST stock.
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Other Notable Earnings On Watch Today
Not to mention, several other major companies are looking to report their earnings today. For those looking to jump on some pre-market earnings action, we have Accenture (NYSE: ACN), Darden Restaurants (NYSE: DRI), Endava (NYSE: DAVA), and Dynatronics (NASDAQ: DYNT) on tap.
Alternatively, in case you are keener on earnings after the closing bell, there is a good mix of names to consider as well. Namely, Nike, Costco, Trip.com (NASDAQ: TRIP), and Vail Resorts (NYSE: MTN) among others would be in focus. Whether you are anticipating the jobless claims data or keeping up with earnings, there is enough to keep you busy in the stock market now.
