Stock Futures Edge Higher As Market Digest Fed’s Tapering Decision
Stock market futures were mostly steady in the early morning trading on Thursday. This came after the Fed announced it will scale back its bond purchases. And many see that as a signal of economic strength. The tapering is slated to begin later this month. It will be at $15 billion per month, which means the quantitative easing program should end by the middle of 2022. Nevertheless, the Fed reiterated it could change the pace of taper as needed.
“The Fed’s tapering announcement removes a minor, but overhanging worry across markets, as investors had been waiting for this moment for months, and it reinforces the view that the economic recovery has a long runway, albeit with a low rate of growth,” said George Ball, chairman of Sanders Morris Harris.
On the economic front, the Labor Department is set to release its weekly jobless figures at 8.30 a.m. ET today. According to estimates from Dow Jones, economists are expecting the numbers to be 275,000. That compares to 281,000 in the previous week. Now, this would represent a significant improvement from last year. But note that the weekly filings have yet to return to the pre-pandemic levels. As of 6:50 a.m. ET, the Dow futures are down by 0.03%. Meanwhile, the S&P 500 and Nasdaq futures are trading higher by 0.12% and 0.43% respectively.
Fastly Stock Rallies On Strong Revenue Report & Outlook
Fastly (NYSE: FSLY) stock is surging in the pre-market trading Thursday. This comes after the content delivery network and security solution provider posted upbeat third-quarter results and named two new members to its board of directors. For the quarter, revenue came in 23% higher year-over-year to $87 million, topping Wall Street’s estimates of $83.7 million.
The company noted that after a widely publicized network outage in the second quarter, some customers discontinued using the platform. But CEO Joshua Bixby said in a letter to shareholders that the issue has been resolved and the customers are back. He said, “I am pleased to report that our top customers have returned traffic and continue to ramp following significant stability and resilience work by our infrastructure and engineering teams.”
Notably, the company’s enterprise customer count grew from 408 to 430. Meanwhile, the total customer count increased from 2,581 to 2,748. And investors appear to be regaining their confidence in FSLY stock right now. All in all, with more customers coming back to their platform, would you say it’s all the way up from here for FSLY stock?
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Cloudflare Earnings In Focus After The Stock Market Closes Today
Cloudflare (NYSE: NET) is slated to report its third-quarter earnings after the closing bell today. Some would have noticed the impressive run of NET stock over the past month. Needless to say, expectations are particularly high for this cybersecurity company heading into its quarterly report. For those unfamiliar, Cloudflare provides an integrated cloud-based security solution for a range of platforms.
Fundamentally, the company has been firing on all cylinders. In its second quarter, Cloudflare posted its strongest quarter ever as a public company. Its revenue increased by 53% year-over-year to $152.4 million. It is also noteworthy that the company added a record number of large customers. These refer to those who spent more than $100,000 annually. In detail, Cloudflare signed the equivalent of more than two six-figure customers every single business day during the second quarter.
Following the sequential uptick in revenue, the company’s management guided for a strong third quarter. It expects a revenue between $165 million and $166 million. Of course, whether Cloudflare stock could continue to march higher would highly depend on the number of large customers acquired for the quarter. The question is, will the third-quarter numbers be good enough for investors? Nevertheless, with the strings of innovation the company has unveiled recently, Cloudflare could still be looking at a long growth runway ahead.
Square Investors Back Afterpay Takeover; Earnings On Tap
Square (NYSE: SQ) is one step closer to buying out Afterpay (OTCMKTS: AFTPF) after Square’s shareholders gave the green light for the takeover. If anything, this acquisition underlined the growing popularity of “buy now, pay later” (BNPL) services that upended traditional consumer credit. BNPL providers typically charge merchants a fee to offer small point-of-sale loans which shoppers repay in interest-free installments, bypassing credit checks.
Apart from the news of its expansion in the BNPL market, Square will also report its third-quarter earnings after the stock market closes today. From its previous quarter, the company reported revenue of $4.68 billion, representing an increase of 143% year-over-year. However, some are concerned that the growth for its Cash App could come under pressure. That comes after the end of stimulus in September. Many may also be scrutinizing the company’s outlook for the coming quarters, after Visa (NYSE: V) disappointed investors last month.
In any case, the company has multiple industry tailwinds at its back. For instance, the massive surge in Bitcoin price and growing interest in the cryptocurrency space is likely to have aided growth in Square’s overall revenue. Separately, investors may also be keen to know the reception of Square’s recent launches in France and Spain. Now, with its historically strong growth rate and the acquisition of Afterpay, would SQ stock be a top fintech stock to watch ahead of its earnings?
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Notable Earnings To Look Out For Today
For earnings, investors remain spoilt for choices in the stock market today. Before the market opens today, we have Moderna (NASDAQ: MRNA), ViacomCBS (NASDAQ: VIAC), Penn National Gaming (NASDAQ: PENN), Regeneron Pharmaceuticals (NASDAQ: REGN), and Barrick Gold (NYSE: GOLD) to look forward too, among others.
On the flip side, we are looking at a tech-focused lineup of earnings after today’s closing bell. This includes but is not limited to firms such as Square, Pinterest (NYSE: PINS), Uber (NYSE: UBER), and Airbnb (NASDAQ: ABNB) and Fortinet (NASDAQ: FTNT). Whether it is digesting the Fed’s latest comments or simply following a barrack of earnings, there is enough to keep you occupied as we start another trading day.
