Stock Market Futures Crept Higher After Hot Inflation Data
Stock market futures are edging higher in the early morning on Thursday following a tech-driven sell-off on Wall Street. This came after a higher-than-anticipated inflation data released on Wednesday. The consumer price index (CPI) rose 6.2% in October from a year ago, hitting its highest level in three decades. Following this persistent inflation number, investors may be moving up their expectations of the timeline of a Fed rate hike.
“Inflation remains stubbornly high, to the surprise of many that expected prices to come back to earth sooner,” said Ryan Detrick, chief market strategist for LPL Financial. “The truth is you can’t shut down a $20 trillion economy and not feel some bumps as it restarts, but we are hopeful the supply chain issues will resolve over the coming quarters and inflation should calm down as well.”
Meanwhile, Tesla (NASDAQ: TSLA) stock is rising in pre-market trading after regulatory filings show CEO Elon Musk has sold nearly $5 billion this week. Musk sold these shares in part to satisfy tax obligations related to an exercise of stock options. As of 6:55 a.m. ET, the Dow, S&P 500, and Nasdaq futures are trading higher by 0.14%, 0.38%, and 0.66% respectively.
Rivian Closes With A Big Gain On Its First Day Of Stock Market Debut
Electric-truck maker Rivian (NASDAQ: RIVN), backed by Amazon (NASDAQ: AMZN) and Ford (NYSE: F), ended its first day of trading valued at $86 billion. Despite being a pre-revenue company, investors decided to put the company in the same league as some of the reputable names in the automotive industry such as General Motors (NYSE: GM) and Ford. If anything, Rivian’s debut shows that investors are confident to bet on companies that show promise and appear to have credible leadership.
Perhaps, the most obvious reason to invest in Rivian stock in the stock market today is its collaboration with Amazon. For those uninitiated, Amazon invested $1.3 billion in Rivian and agreed to an initial order of 100,000 vehicles. It is also worth pointing out that the contract prevents Amazon from purchasing anyone else’s delivery vans for four years. If Amazon fails to fulfill its sales obligations over two years, it will reimburse Rivian’s development costs.
There are many bullish investors who are excited about the company’s products. Its stock is also debuting at a time where inventors are still very hot on EV companies. But now that it is trading in the public market, Rivian will have a lot to prove. Many will be watching to see if it could scale up production and generate healthy returns for its believers.
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Affirm (AFRM) Stock Rebounds After Strong Quarterly Earnings & Revenue Outlook
“Buy now, pay later” company Affirm (NASDAQ: AFRM) is making big moves in the pre-market trading today. This came after the company said it would expand its partnership with Amazon and reported quarterly revenue above Wall Street estimates. For the quarter, total revenue rose to $269.4 million from $173.9 million a year earlier. Prior to reporting the earnings, Affirm stock dropped more than 15% for Thursday’s intraday trading for no obvious reason.
If we really were to put a finger on why Affirm stock plunged on Thursday, my guess would be the stronger-than-expected inflation number released from the U.S. Department of Labor. In general, growth stocks tend to not do well in an inflationary environment because it increases the cost of doing business. And in Affirm’s case, it could potentially increase the cost of interest payments. Another bearish factor could be the spillover effect from Upstart (NASDAQ: UPST), where the AI lender saw a big sell-off after reporting quarterly earnings that failed to meet the sky-high expectations. If you bought the dip on Thursday’s trading, kudos to you. AFRM stock is now up more than 20% in pre-market trading.
Notably, Affirm’s expanded partnership will allow all eligible U.S. purchases of $50 and more on Amazon to be split into monthly payments. This is big news as such plans were only available to select customers prior to this announcement. Additionally, Affirm will also be embedded as a payment method in Amazon Pay’s digital wallet in the country. Considering all these, investors can expect AFRM stock to make another wave in the stock market today.
Blink Charging’s Earnings On Tap After The Closing Bell
Blink Charging (NASDAQ: BLNK) is set to report its third-quarter earnings after the stock market closes today. Since the passage of the infrastructure bill on Monday, many EV charging stocks have been on a good run. The federal support is great news, but it’s not sure if Blink Charging would be a big beneficiary. Like EVgo (NASDAQ: EVGO) and ChargePoint (NYSE: CHPT), the company makes charging stations for electric vehicles.
After the electric vehicle theme has garnered enough attention from Wall Street, investors have been looking for great pick-and-shovel plays to invest along. And BLNK stock has always been generally a good candidate to play the growing market for EV charging infrastructure. However, confidence among investors appears to have faltered. They are not sure if the company could actually be making money in the long run. From its latest quarter, Blink Charging only generated $586,173 in revenue from charging services at stations it owns. Besides, it reported a $12.3 million loss from operations.
In the last week of October, Needham kept its “Buy” rating on BLNK stocks. The firm takes the long view with more supply chain headwinds and margins pressure anticipated in the near term. However, in the long run, the increasing adoption of EVs could help EV charging companies scale up. In any case, Blink Charging may have to be more convincing in its earnings report today.
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Notable Earnings In Focus In The Stock Market Today
Topping off all of that, we also have a solid line-up of companies reporting earnings today. In the pre-market hours, Grow Generation (NASDAQ: GRWG), Paysafe (NYSE: PSFE), Hut 8 (NASDAQ: HUT), Wix.com (NASDAQ: WIX), and Yeti (NYSE: YETI) are posting earnings.
Alternatively, for those eyeing post-market earnings, there are plenty of consumer-focused names reporting as well. This ranges from electric vehicle stocks like Lordstown Motors (NASDAQ: RIDE), and Blink Charging to tech firms like Phunware (NASDAQ: PHUN). Additionally, Sundial Growers (NASDAQ: SNDL) and Luminar (NASDAQ: LAZR) are also on tap. Overall, whether it is checking out the hottest EV stock or simply following earnings, there is enough to keep investors busy in the stock market today.
