Stock Market Futures Trade Cautiously Ahead Of Monthly Jobs Report
U.S. stock futures were little changed in early morning trading Friday ahead of this week’s key economic report. The Labor Department is expected to release the November jobs report at 8.30 a.m. ET. Investors are expecting to see solid jobs growth last month. In particular, economists surveyed by Dow Jones predicting 581,000 jobs added in November. This is likely to be the key focus in the stock market today. After all, investors continue to look for clues as to whether the Fed will increase the pace of its tapering this month.
Meanwhile, Southeast Asia’s largest ride-hailing company Grab (NASDAQ: GRAB) lost one-fifth of its value following its public debt on Thursday. The shares of the ride-hailing and delivery company initially soared. But they then reversed course to close at $8.75 per share on Thursday’s trading. This came after the completion of Grab’s merger with special purpose acquisition company Altimeter Growth Capital.
Elsewhere, the Senate passed a short-term government funding bill on Thursday night to prevent a government shutdown. Amid a roller-coaster week driven by the Omicron variant, a government shutdown is the last thing investors need to have on their plate. As of 7:17 a.m. ET, the Dow up 0.03%, S&P 500, and Nasdaq futures are declining by 0.01%, and 0.03% respectively.
Didi To Delist From The New York Stock Exchange, Plans Hong Kong IPO
Chinese ride-hailing giant DiDi Global (NYSE: DIDI) said it will commence its delisting from the New York Stock Exchange, and make plans to list in Hong Kong instead. Didi’s announcement comes less than 24 hours after the Securities and Exchange Commission finalized rules that allow it delist foreign stocks for failing to meet audit requirements. If anything, this shows that Chinese companies are no longer comfortable with the U.S. as a jurisdiction for their high tech companies because of the regulatory scrutiny and data security issues.
This marks the first high profile Chinese company to exit from the world’s largest stock market five months after the Chinese regulators’ probe into the company. The company pushed ahead with its $4.4 billion IPO plan earlier in June. That’s despite being asked to put it on hold while a review of its data practice was conducted. Following this piece of news, some investors may also wonder if other Chinese tech stocks would follow the same route. For all that, it will also likely discourage other Chinese firms from listing in the U.S. stock market. In the meantime, the likes of Alibaba (NYSE: BABA) and JD.com (NASDAQ: JD) could continue to face pressure in the stock market today.
“Didi’s plan to delist in the United States and the listing of Hong Kong stocks I believe will have an obvious impact on location decisions for large technology stocks’ future listings,” said Kenny Ng, securities strategist at Everbright Sun Hung Kai in Hong Kong.
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Marvell Technology (MRVL) Stock Surges After Earnings & Outlook Beat
Marvell Technology (NASDAQ: MRVL) is skyrocketing in pre-market trading today. This came after the chip maker delivered better-than-expected earnings for the quarter. In its fiscal third quarter, revenue came in 61% higher from the same period last year to $1.21 billion. Its earnings per share (EPS) was $0.43 on $1.21 billion. That topped Wall Street’s estimates of $0.38 on revenue of $1.15 billion. But what’s really driving the stock price higher is the upbeat fourth quarter outlook on 5G.
“For the fourth quarter, we are expecting sequential revenue growth of 9 percent at the midpoint of guidance, led by 5G, which is projected to increase by 30 percent sequentially and data center which is forecasted to continue to grow in the double digits on a percentage basis,” the company said.
There’s no doubt that the booming demand for semiconductors used in data centers, 5G wireless networks and other industries has supercharged the company’s top and bottom lines. Given these tailwinds, it shouldn’t come as a surprise why analysts are upgrading MRVL stock. On Wednesday, Susquehanna Bancshares raised its price target to $82 ahead of its earnings. That came as the investment firm sees continued strength in the data centers and 5G space. Considering Marvell’s partnerships with 5G heavyweights Nokia (NYSE: NOK) and Samsung, these should pave the way for the company to tap into a fast-growing opportunity. With that in mind, it becomes easier to see why Marvell could be looking at long-term growth ahead.
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DocuSign (DOCU) Stock Plunge As Pandemic Boom Appears To Fade
E-signature software company DocuSign (NASDAQ: DOCU) just reported its sixth straight period of revenue growth in excess of 40%. Despite the impressive beat, DOCU stock is trading lower in the pre-market trading today. After all, investors appear to be more concerned about what lies ahead. For the fiscal fourth quarter, growth is expected to come in at around 30%. CEO Dan Springer acknowledged that as a disappointment. This came after “exceptionally high growth rates at scale” during the first half of 2020.
“Third quarter revenue growth of 42% year-over-year and operating margin of 22% exceeded our expectations. After six quarters of accelerated growth, we saw customers return to more normalized buying patterns, resulting in 28% year-over-year billings growth,” said Dan Springer, CEO of DocuSign.
Like it or not, the remote and hybrid working trend is likely to continue in the coming quarters. This comes as the discovery of Omicron prompts fears of renewed lockdowns and travel restrictions. And that could drive demand for DocuSign’s software tools which help organizations sign and manage agreements digitally, instead of physically. No doubt, DOCU stock may be facing some headwinds today. But patient investors who believe in the future of digital signatures and the automating of the agreement process might want to consider buying on dips.
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Earnings On Tap In The Stock Market Today
While the earnings season is largely in the rearview mirror, there are still plenty of earnings to consider today. Before the market opens, we have Hibbett Sports (NASDAQ: HIBB), Big Lots (NYSE: BIG), and Bank of Montreal (NYSE: BMO) reporting their earnings. So, whether it is looking at the jobs report, keeping up with Didi’s delisting, or following the barrack of earnings, there is enough to keep you occupied as we wrap up the week.
