U.S. stock futures looked set to continue yesterday’s sell-off as companies continue to report their earnings. Despite mostly better-than-expected earnings yesterday, all three of the main U.S. indices ended the day more than 2% in the red.
Dow and S&P futures were trading slightly lower, down 0.1% and 0.2%, respectively, while Nasdaq futures were preparing to open around 0.8% lower at the time of writing.
MA, MCD and CMCSA will report earnings before the market opens, while V, MDLZ and TEAM are expected to release their results after the bell.
Sundial Growers (SNDL) was the most actively traded stock before the open, with almost 33 million shares already changing hands, and was up around 48% at the time of writing.
Pre-market top gainers were Janone Inc. (+92%), Naked Brand (+88%) and Castor Maritime (+65%).
Biggest losers in pre-market trading were Life Storage (-31%), Accelerate Diagnostics (-16%) and Nokia (-15%).
In corporate news, Apple (AAPL) was down 3.3% in pre-market trading despite reporting its largest single quarter revenues that exceeded the $100 billion landmark for the first time. Strong sales in every product category, especially 5G iPhone sales, was the main driver of a 34% year-on-year first quarter earnings increase to $1.68, beating analysts’ expectations of $1.42. No formal guidance for the second quarter was provided due to uncertainty over developments regarding the coronavirus.
Facebook (FB) was also trading lower before the bell after reporting better-than-expected fourth quarter results, but warned investors that the strong trend in advertising revenues was likely to moderate and possibly even reverse through 2021. EPS jumped 52% year-on-year to $3.88 compared to analysts’ forecasts of $3.22, while revenues of $28.07 billion exceeded analysts’ estimates of $26.44 billion.
The trend continued for AT&T (T) as it also posted fourth quarter earnings and revenues that “beat the Street,” but offered 2021 revenue growth guidance of 1%, falling short of analysts’ estimates of 1.4%. The COVID-19 pandemic negatively impacted company revenues across most of AT&T’s business segments. CEO John Stankey confirmed that the company had its best year in terms of growth of postpaid phone customers in a decade and its second lowest postpaid phone churn ever.
In other news, Gamestop (GME) was volatile before the market opened, trading 30% higher at the time of writing. Shares in the video game retailer have rallied over 1,700% since January 1st in what can only be described as a massive “short-squeeze” caused by day traders and speculators pushing the share price higher and forcing large institutional investors to cover their short positions, further bidding up the price. Traders have been targeting some of Wall Street’s most shorted stocks of late, causing massive price appreciation as short sellers scramble to buy back their stock.
AMC Entertainment (AMC) was another beneficiary of the targeted short-seller syndrome on Wednesday as shares of the theater operator gained over 300% in value. On January 25th, the company announced that it had raised almost $1 billion and that “any talk of an imminent bankruptcy for AMC is completely off the table.” AMC has now erased all of its losses caused by the coronavirus pandemic and is trading almost 200% higher than it was a year ago.
