Futures tied to Wall Street’s key benchmarks edged lower in pre-market trading on Thursday after stocks closed higher for the fourth straight day in the previous session on the heels of Big Tech earnings.
However, the winning streak in equities was eclipsed by disappointing fourth quarter results from Facebook parent company Meta (FB), which reported figures that missed estimates after the bell on Wednesday. The results sent shares tumbling more than 20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in post-market trading. Contracts on the tech-focused Nasdaq Composite plunged more than 2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} ahead of open, while S&P 500 futures were down 1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. Futures tied to the Dow Jones Industrial Average were muted.
Meta reported Q1 2022 revenue, a key figure for stock watchers, that came up short, with the company estimating between $27 billion to $29 billion in the current quarter, below analysts’ expectations of $30.25 billion. The company’s ability to continue to navigate Apple’s (AAPL) recent privacy changes that allow iOS users to opt out of letting their apps track them across the web was also in focus for the near term.
Facebook’s fourth-quarter report comes amid a prolific week in earnings season. Amazon (AMZN) is set to unveil figures after market close on Thursday, marking the last of five corporate heavyweights that account for about one-quarter of the S&P 500’s total market capitalization to reveal 2021 year-end performance figures. Shares of Alphabet (GOOGL), which released its results on Tuesday, surged in Wednesday’s session after the tech giant topped quarterly sales and profit estimates and announced a 20-for-1 stock split.
Investors weighed Big Tech earnings against a jarring employment report out Wednesday. ADP reported that private-sector U.S. employers cut 301,000 jobs in January, marking the first decline since December 2020 as the Omicron variant put a dent in the labor market’s recovery.
“The takeaway for investors is probably a temporary blip on an otherwise strong recovery we’re seeing in the employment markets,” SEI CIO Jim Smigiel told Yahoo Finance Live. “It’s not too surprising we’re seeing a bit of weakness.”
ADP’s report was a prelude to the Labor Department’s official monthly jobs report due out Friday. Consensus economists expect 150,000 non-farm payrolls returned in January, a figure that would mark the slowest pace of hiring since December 2020 as the impact of the latest COVID waves catches up to economic data.
“It’s one of those things where we’re just going to have to get used to the short but shallow economic damage we saw because of the latest variant,” Art Hogan, B Riley-National chief market strategist, told Yahoo Finance Live.
Jared Bernstein, member of the White House Council of Economic Advisers, emphasized to Yahoo Finance Live that this month’s figures are likely to be “distorted” by a number of Americans who have tested positive for the virus in the latest surge on unpaid leave that are not tracked on the payroll count.
Anxiety around central banking policies rattled markets in January. The S&P 500 posted a negative return of 5.26{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} for January 2022 – marking its worst month since the benchmark plunged 12.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in March 2020 after COVID-19 upended the global economy. Meanwhile, the Nasdaq Composite (^IXIC) narrowly avoided its worst-performing January on record after a loss of 8.98{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} for the month.
As stocks appear to crawl out of their January rout, some strategists contend the worst of Fed jitters could be behind us.
“In some ways, we might be at peak hawkishness in terms of market expectations,” Tony DeSpirito, CIO of BlackRock’s U.S. Fundamental Active Equity arm. “We certainly saw that in January, and late last year — a change in tone from the Fed and now the market has reset expectations and starting to price them in.”
Sawchuk Wealth founder Terry Sawchuk told Yahoo Finance recent hawkishness from Fed policymakers has stemmed political pressure to look like they’re fighting inflation. “I think the Fed’s going to back off of all of this at some point,” he said.
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8:30 a.m. ET: Another 238,000 American filed new claims last week
First-time unemployment filings trended lower last week, suggesting some of the Omicron-related disruptions that have recently weighed on the labor market’s recovery may be easing.
The Labor Department reported jobless claims came in at 238,000 for the week ending Jan. 29, compared to 245,000 expected by economists, according to consensus data compiled by Bloomberg. During the prior week, filings totaled 260,000.
The agency’s latest print shows back-to-back declines in unemployment claims after filings rose to the highest level since October in mid-January, coming in at nearly 300,000. The jump tracked a spike the Omicron-driven spike coronavirus cases across the U.S. between December and January, which rendered many businesses temporarily closed and employees sick or concerned over becoming ill at work.
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7:21 a.m. ET: Tesla recalls more than 800,000 vehicles over seatbelt alert issue
Tesla Inc. (TSLA) has issued a recall on 817,000 U.S. vehicles because the seatbelt alert may not activate when a vehicle starts to remind the driver to buckle up.
The National Highway Traffic Safety Administration (NHTSA) said the cars fail to comply with a federal motor vehicle safety standard on “Occupant Crash Protection” since the audible alert does not activate. Recalls were made on some 2021-2022 Model S and Model X, 2017-2022 Model 3, and 2020-2022 Model Y vehicles.
The electric-vehicle giant is expected to perform an over-the-air (OTA) software update to address the issue.
Shares of Tesla were down 2.58{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in pre-market trading to $882.25 a piece as of 7:21 a.m. ET.
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7:00 a.m. ET: US stock futures fall lower in pre-market trading
Here were the main moves in markets ahead of the open Thursday:
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S&P 500 futures (ES=F): -48.75 points (-1.07{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 4,528.50
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Dow futures (YM=F): -94.00 points (-0.26{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 35,398.00
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Nasdaq futures (NQ=F): -321.75 points (-2.13{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 14,792.75
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Crude (CL=F): -$1.10 (-1.25{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $87.16 a barrel
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Gold (GC=F): -$6.50 (-0.36{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,803.80 per ounce
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10-year Treasury (^TNX): -3.4 bps to yield 1.7660{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
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6:03 p.m. ET Wednesday: Nasdaq plunges heading into overnight trading after Facebook miss
Here’s how the main benchmarks fared in extended trading Wednesday evening:
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S&P 500 futures (ES=F): -32 points (-0.70{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 4,545.25
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Dow futures (YM=F): +44 points (+0.12{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 35,536.00
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Nasdaq futures (NQ=F): -260.75 points (-1.68{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 14,853.75
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Crude (CL=F): -$0.43 (-0.49{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $87.83 a barrel
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Gold (GC=F): -$2.70 (-0.15{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,807.60 per ounce
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10-year Treasury (^TNX): -3.4 bps to yield 1.7660{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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