Pre-Markets in Green on Solid Earnings Reports
Pre-market futures are up this Hump Day morning, continuing the rebound from Tuesday after a day of selling off (booking profits?) on Monday. While economic prints have cooled from their frenetic pace a week ago, Q4 earnings season roars ahead, even if most of the marquee names in the market have already reported. The Dow is up +73 points at this hour, +15 on the S&P 500 and +80 points on the Nasdaq.
The U.S. Trade Deficit for December came in roughly in-line with expectations this morning, reaching -$62.2 billion from an improved revision to -$61.9 billion the previous month. While far from ideal, at least we are off the depths from 2023, bottoming out at -$72.9 billion last April, and a record -$102.5 billion reported back in early 2022. Keep in mind, we had run only a limited deficit up until the beginning of this century, at which time it began to sink ever downward.
As of the closing bell today, we’ll see another economic report hitting the tape: Consumer Credit, also for the month of December. Expectations are for this metric to cool down to around $15 billion from the big jump the previous month to $23.7 billion. Revolving credit blossomed ahead of holiday season last year, and we know the consumer has thus far spent its way past the dangers of a possible recession. But how much of this spending is going on our credit cards, and how sustainable is this?
Uber UBER reported Q4 earnings ahead of the bell, crushing estimates on both top and bottom lines. Earnings of 66 cents per share easily outpaced the 15 cents in the Zacks consensus, though the company did say this was largely due to a $1 billion windfall related to “unrealized gains.” Revenues of $9.94 billion surpassed the $9.75 billion expected, with Mobility up +29% and Delivery +19% year over year. Shares are down almost -2% on the news, however; Uber shares had gained nearly +20% over the past month, so investors are selling on this good news.
Video game developer Roblox RBLX surged this morning on a lower-than-expected loss per share in its Q4 report, with negative earnings of -52 cents amounting to a 5-cent beat. Revenues in the quarter grew to $1.13 billion, above the $1.08 billion anticipated, with Daily Active Users (DAU) up +22% year over year. Revenue guidance for the current quarter is also up nicely: to between $910-940 million from the $897 million previously targeted. Shares had gone up +16% on the news, but have since ebbed to +11% at this hour.
Chinese e-commerce giant Alibaba BABA shares are down -4% on lower-than-expected revenues reported in the company’s fiscal Q3 ahead of today’s opening bell. The company cites the structural overhaul that has taken lots of company resources over the past year. That said, BABA announced a $25 billion share buyback program, although with this morning’s sell-off, shares are back down to about breakeven from the start of the year.
After today’s close, we’ll see new earnings reports from companies like Disney DIS, PayPal ( PYPL) and Arm Holdings ARM. For Disney, this morning it has announced a major sports streaming alliance with Fox and Warner Brothers Discovery. Disney has long been the parent company for ESPN, but this new platform promises to change the structural burdens and boons of sports broadcasting.
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