Here are five things you must know for Thursday, February3:
1. -- Stock Futures Slide As Meta Miss Ripples Through Tech Sector
U.S. equity futures slumped lower Thursday, with tech stocks leading the declines, as investors watched the ripple effect from Meta Platform's FB $200 billion post-earnings wipeout while eyeing key central bank decisions from around the world.
Meta Platforms, formerly known as Facebook, plunged more than 20% in after-hours trading late Wednesday after weaker-than-expected fourth quarter earnings and muted outlook on revenues and subscriber growth.
The slump pulled a multitude of social media and tech stocks lower in pre-market trading as a result, and looks set to put extra pressure on Nasdaq Composite futures heading into the start of trading.
Stocks are also having trouble finding their footing ahead of a key European Central Bank policy decision later this morning, which follows on from the fastest reading for regional inflation on record in January, when harmonized consumer prices rose 5.1%.
The ECB is unlikely to move its record-low borrowing rates today, but it's near-term plans could provide some clarity for the Federal Reserve, which is also reading for rate lift-off now that U.S. inflation is running at the hottest rate in more than four decades.
Prior to the start of trading, as well, investors will navigate weekly jobless claims data ahead of tomorrow's January non-farm payroll report, alongside December quarter earnings from Merck (MRK), Eli Lilly (LLY), Honeywell (HON), Estee Lauder (EL) and Biogen (BIIB).
Futures contracts tied to the Dow Jones Industrial Average are indicating a 140 point opening bell decline while those linked to the S&P 500 are priced for a 55 point pullback.
Meta Platforms' slump, as well as deep retreats for Twitter, Snap and Pinterest, have futures linked to the Nasdaq Composite looking at an opening bell slump of around 340 points.
2. -- Meta Shares Plunge As TikTok Rattles Zuckerberg, Saps User Growth
Meta Platforms shares plunged lower in pre-market trading after the Facebook parent posted weaker-than-expected fourth quarter earnings, forecasting that spending will close in on $100 billion this year and cautioned on slower user growth rates and a pullback on advertising budgets.
Facebook missed on the Street's Q4 profit forecast, with a bottom line of $3.67 per share on revenues of $33.4 billion. User growth rates also slowed, and were largely flat to the previous quarter, with founder and CEO Mark Zuckerberg noting increasing competition for social media engagement.
"People have a lot of choices for how they want to spend their time and apps like TikTok are growing very quickly. And this is why our focus on Reels is so important over the long-term," Zuckerberg told investors on a conference call late Wednesday.
"Ultimately, our continued success relies on building new products that people find valuable and enjoy using," he added. :And in a competitive marketplace, we're focused on understanding the areas that we need to deliver on for people and executing against this strategy."
Meta shares were marked 19.23% lower in pre-market trading to indicate an opening bell price of $260.89 each each, the lowest since March of last year.
3. -- Spotify Shares Tumble On 'Joe Rogan' Hit To Subscriber Forecast
Spotify Technologies (SPOT) shares slumped lower in pre-market trading after the music-sharing and podcast network forecast softer-than-expected user growth that overshadowed a solid fourth quarter earnings report.
Spotify said paid subscribers to it network would grow to 183 million in the current quarter, with revenues forecast in the region of €2.6 billion, but declined to offer guidance on annual growth rates. For the three months ending in December, Spotify had 180 million active users and a staggering 3.6 million podcasts on its platform.
The move suggested Spotify could lose a trove listeners over the recent controversy linked to the Joe Rogan Experience Podcast, which is one of Spotify's most-valuable properties. Joe Rogan, the show's host, was forced to apologize for sharing mis-information on Covid and vaccines following a move by several artists, lead by Neil Young, to remove their music from the platform.
"Our policies have been carefully written with the input from numbers of internal and external experts in this space. And I do believe they’re right for our platform. And while Joe has a massive audience, he also has to bide those policies," CEO Daniel Elk told investors on a conference call late Wednesday. "So I think when you think about that and you think about the ads business, I have a tremendous amount of confidence in that."
"And of course, we are hearing from our partners that Spotify has a broad range of content on our platform," he added. "So there really is something for everyone here and for advertisers to pick to as well."
Spotify shares were marked 7.8% lower in pre-market trading to indicate an opening bell price of $177.00 each.
4. -- Amazon Earnings On Deck, With Labor, Shipping Costs In Focus
Amazon (AMZN) shares slumped lower in pre-market trading ahead of a key fourth quarter earnings report for the world's largest online retailer that is likely to focus on labor costs and e-commerce growth.
Amazon, which looks to have held onto the massive gains in market share is gathered during the pandemic, is finding the cost of that maintenance increasing: wage increases and fulfilment center and shipping expenses are eating into profits, and with nearly 11 million unfilled positions in the U.S. economy at the end of December, hiring is expected to be a challenge again in the coming year.
On a headline basis, Amazon is expected to earn $3.67 a share on revenues of $137.6 billion, with a 2022 EPS range of around $56 per share.
There could also be some discussion of splitting the company's four-digit stock, following a similar move by Google parent Alphabet earlier this week, although management is reported to be focused on maximizing profits from its Web Services business first.
Amazon shares were marked 3.15% lower in pre-market trading to indicate an opening bell price of $2,917.50 each.
5. -- Tesla Slips Lower As NHTSA Looks Into Braking Complaints
Tesla (TSLA) shares moved lower in pre-market trading following a move by U.S. safety officials to review complaints about unexpected braking
The National Highway Traffic Safety Administration said its reviewing the complaints, which are linked to allegations that Tesla cars brake at high speeds without warning, noting that it will "act immediately if data show that a risk may exist."
The move to examine Tesla cars, which appears to be a regular even for the NHTSA, followed a controversy earlier this week involving allegations that Tesla cars could slowly pass through stop signs -- at 2 miles per hour -- if no risk was detected by the vehicles driver assistance system.
Tesla shares were marked 2.5% lower in pre-market trading Thursday to indicate an opening bell price of $883.50.
