Here are the most important news, trends and analysis that investors need to start their trading day:
- Tech pressures Wall Street premarket as investors await key inflation data
- Amazon falls on ugly forecast and slowest growth since dot-com bust
- Apple drops after warning of a massive hit due to supply constraints
- Musk sells around $4 billion of Tesla shares as he moves to buy Twitter
- Chevron, Exxon drop despite reporting strong earnings on high energy prices
1. Tech pressures Wall Street premarket as investors await key inflation data
U.S. stock futures fell Friday, with the tech-heavy Nasdaq set to open down 1% as Amazon and Apple sank in the premarket, the morning after reporting rough quarterly results. The Nasdaq led a recovery rally Thursday on Wall Street, soaring more than 3%. The S&P 500 jumped 2.5%. The Dow Jones Industrial Average rose nearly 2%. All three stock benchmarks were slightly higher for the week. But heading into the final trading day of April, stocks were still sharply lower for the month.
The 10-year Treasury yield ticked lower Friday, trading around 2.85%, below its recent late 2018 high. The Federal Reserve‘s favorite inflation gauge is out at 8:30 a.m. ET. Economists expect March’s core personal consumption expenditures price index to increase 5.3% year over year. That’s would be slightly lower than February’s 5.4% advance, which was the largest rise in nearly 40 years.
2. Amazon falls on ugly forecast and slowest growth since dot-com bust
Amazon dropped roughly 10% in the premarket, following its late Thursday announcement of weaker-than-expected first-quarter earnings and lower forward guidance. Revenue for the quarter increased 7% year over year to $116.4 billion, basically matching expectations. That was the slowest sales rise for any quarter since the dot-com bust in 2001 and the second straight quarter of single-digit percentage growth.
- The Amazon Web Services cloud unit was once again strong. But not strong enough to carry the e-commerce side of the business, which saw $6 billion in added costs due to rising inflation, lower worker productivity and excess fulfillment capacity.
3. Apple drops after warning of a massive hit due to supply constraints
Apple fell 1% in Friday’s premarket, the morning after warning that supply constraints related to Covid could hurt sales by between $4 billion and $8 billion in its fiscal third quarter. The guidance overshadowed strong fiscal second-quarter results, including earnings, revenue and gross margin beats.
- While analysts were looking for a little bit more out of the Services segment, it nonetheless reported record revenue. Products sales saw a March-quarter record. Investors also got a 5% dividend increase and a $90 billion buyback authorization. At quarter end, Apple had a $73 billion net cash position.
4. Musk sells around $4 billion of Tesla shares as he moves to buy Twitter
Elon Musk sold roughly $4 billion worth of Tesla shares in the days following his $44 billion bid to take Twitter private, according to filings with the Securities and Exchange Commission. The bulk of the CEO’s sales were made on Tuesday, the filings showed. Tesla shares fell 12% that day, but edged higher on Wednesday by less than 1 percentage point.
As the filings became public Thursday evening, Musk wrote on Twitter, “No further TSLA sales planned after today.” Tesla’s stock rose more than 1.5% in Friday’s premarket. Twitter shares climbed nearly 1% to more than $49 each, below the $54.20 per-share cash offer from Musk.
5. Chevron, Exxon drop despite reporting strong earnings on high energy prices
Shares of Chevron fell 1% in Friday’s premarket, after the oil giant reported that profit more than quadrupled during the first quarter on higher oil and gasoline prices. Chevron’s revenue rose nearly 70% to $54.37 billion. West Texas Intermediate crude futures spiked to $130.50 in early March, a price last seen in 2008 as Russia’s invasion of Ukraine sparked supply fears. Prices have since cooled, but are still sitting above $100, boosting energy companies’ operations.
Shares of Exxon Mobil dropped 1% in the premarket following the company’s Friday announcement that it took a $3.4 billion after-tax charge in the first quarter related to its Sakhalin-1 operation in Russia. Earnings doubled to $5.5 billion in the quarter. However, profit was down from $8.87 billion in the fourth quarter. Revenue rose more than 50% to $90.5 billion, though that was short of expectations.