Ahead of a key speech on inflation from Federal Reserve Chairman Jerome Powell this morning, Dow futures dropped 74 points, with the S&P 500 and Nasdaq-100 futures down by 0.2%. Rick Rieder, BlackRock’s global chief investment officer of fixed income, told CNBC that “the rates markets are anticipating the Fed is going to be dovish and willing to withstand inflation being higher for a longer period.” Both the S&P 500 and Nasdaq reached fresh highs again on Wednesday.
Corona: medical devices giant Abbott is up 10% in early morning trading after the US Food and Drug Administration issued Emergency Use Authorization for its BinaxNOW COVID-19 rapid test. Abbott (ABT) said that the portable test, which is the size of a credit card, provides results in just 15 minutes.
Watch out Walmart! Amazon is opening its new Amazon Fresh grocery store today in Woodland Hills, California. Customers will be able to try out the Amazon Dash Cart, which enables you to skip the checkout line, and new Alexa features to manage shopping lists and navigate the aisles.
Alibaba is reportedly in talks with YTO Express’ founders to become the major shareholder in the Chinese courier company, as it accelerates consolidation in the world’s largest express delivery market. BABA, which already has a 10% stake in YTO, is holding discussions with YTO’s founding couple Yu Huijiao and Zhang Xiaojuan for an additional stake of up to 30%, Reuters reports.
On the tech front, cloud computing services provider Fastly has entered into a definitive agreement to acquire Signal Sciences for $775 million in cash and stock. Fastly says the deal will expand its robust security portfolio at a time when security at the edge has never been more critical.
Earnings: NetApp is up 8% this morning, after 1Q revenues climbed 4.8% to $1.3 billion year-over-year and surpassed analysts’ expectations of $1.15 billion. Its adjusted EPS increased 12.3% to $0.73, beating Street estimates of $0.41. Abercrombie & Fitch is rising 9% post-print, but analysts are staying sidelined. ANF managed to outperform expectations due to soaring online sales and savvy cost management.
Dollar General is also moving slightly higher after earnings topped expectations, with net sales up 24.4%; and same-store sales up 18.8% (vs consensus of 14.9%). An increase in average transaction amount was partially offset by a decline in customer traffic. “We continue to operate from a position of strength and are excited to announce the acceleration of several key strategic initiatives, including the rollout of DG Pickup, DG Fresh, and our Non-Consumables initiative, as well as an increase in our expected number of real estate projects for fiscal 2020” cheered CEO Todd Vasos.
However Dollar Tree is down 6% in pre-market trading, despite delivering an earnings beat, with revenue of $6.28B (+9.4% Y/Y) beating consensus by $50M. CEO Mike Witynski stated: “Consumer shopping patterns are evolving… Customers are shopping with a purpose, while looking to minimize risk and exposure. As a result, we are seeing material increases in average ticket, while seeing a decline in average visits.”
Splunk is also falling 2% in Thursday’s pre-market trading, following the release of its earnings yesterday after-market close. The data analytics software maker slightly outperformed second-quarter earnings but missed on the revenue outlook. “While optically it may seem as if SPLK missed its revenue target, cloud ARR (annual recurring revenue) is heading in the right direction which is the important metric investors should focus on,” Oppenheimer’s Shaul Eyal reassured investors. Beauty group Coty is also down 4% right now with Semtech down 5%.
Keep an eye out: Large-cap stocks reporting earnings today after-market close include Dell, VMWare, Workday, Ulta Beauty, Marvell and Okta.