Upbeat Netflix Results May Add To Optimism About Tech Earnings

The major U.S. index futures are currently pointing to a higher open on Wednesday, with stocks likely to move to the upside following the lackluster performance seen in the previous session.

Technology stocks may help lead an early advance on Wall Street, as reflected by the 0.9 percent jump by the Nasdaq 100 futures.

The upward momentum in the tech sector comes as shares of Netflix (NFLX) are surging by 10.6 percent in pre-market trading.

Netflix is rallying after the streaming giant reported better than expected fourth quarter revenues on stronger than expected subscriber growth.

The strong results from Netflix may add to optimism about earnings from other tech companies, with IBM Corp. (IBM) among the companies releasing their quarter results after the close of today’s trading.

At the same time, shares of Texas Instruments (TXN) are moving sharply lower in pre-market trading after the chipmaker reported fourth quarter revenues that missed analyst estimates and provided disappointing first quarter guidance.

Telecom giant AT&T (T) may also move to the downside after reporting weaker than expected first quarter earnings and forecasting 2024 earnings below analyst estimates.

Stocks turned in a relatively lackluster performance during trading on Tuesday, with the major averages bouncing back and forth across the unchanged after ending Monday’s trading modestly higher. Despite the choppy trading, the S&P 500 reached a new record closing high.

The major averages eventually ended the session narrowly mixed. While the Dow dipped 96.36 points or 0.3 percent to 37,905.45, the Nasdaq climbed 65.66 points or 0.4 percent to 15,425.94 and the S&P 500 rose 14.17 points or 0.3 percent to 4,864.60.

The choppy trading on Wall Street partly reflected a mixed reaction to the latest earnings news from several big-name companies.

The Dow pulled back off yesterday’s record closing high amid a steep drop by shares of 3M (MMM), with the conglomerate plunging by 11.0 percent after reporting better than expected fourth quarter earnings but providing disappointing guidance.

Healthcare giant Johnson & Johnson (JNJ) also moved to the downside despite reporting better than expected fourth quarter results.

Meanwhile, shares of Verizon (VZ) moved sharply higher after the telecom giant reported fourth quarter results that exceeded analyst estimates on both the top and bottom lines.

Consumer products giant Procter & Gamble (PG) also surged after reporting better than expected fiscal second quarter earnings.

Traders may also have been reluctant to make significant moves ahead of the release of several key U.S. economic reports in the coming days.

Most of the major sectors ended the day showing only modest moves on the day, contributing to the lackluster close by the broader markets.

Airline stocks showed a substantial move to the upside, however, with the NYSE Arca Airline Index soaring by 3.0 percent.

United Airlines (UAL) helped lead the sector higher, spiking by 5.3 percent after reporting fourth quarter results that exceeded analyst estimates on both the top and bottom lines.

Gold stocks also turned in a strong performance amid a modest increase by the price of the precious metal, as reflected by the 2.3 percent jump by the NYSE Arca Gold Bugs Index.

On the other hand, housing stocks moved sharply lower on the day, dragging the Philadelphia Housing Sector Index down by 4.4 percent.

Shares of D.R. Horton (DHI) plunged by 9.2 percent after the homebuilder reported fiscal first quarter earnings below analyst estimates.

Commodity, Currency Markets

Crude oil futures are rising $0.37 to $74.74 a barrel after falling $0.39 to $74.37 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $2,037.10, up $11.30 compared to the previous session’s close of $2,025.80. On Tuesday, gold inched up $3.60.

On the currency front, the U.S. dollar is trading at 146.99 yen compared to the 148.35 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0908 compared to yesterday’s $1.0854.

Asia

Asian stocks ended mixed on Wednesday, with Chinese and Hong Kong markets rallying on reports that Chinese authorities are preparing a package of measure to support the country’s stock market.

The dollar moved higher in Asian trading ahead of U.S. growth and inflation data due later in the week, while oil seesawed between modest falls and gains.

China’s Shanghai Composite Index jumped 1.8 percent to 2,820.77 as the country’s regulator removed proposed gaming rules from its website in a surprising move. Hong Kong’s Hang Seng Index surged 3.6 percent to 15,899.87.

Tech giant Alibaba Group Holding soared 7.3 percent after billionaire co-founder Jack Ma reportedly bought $50 million of Alibaba shares listed in Hong Kong.

Japanese markets ended lower as the yen strengthened after the release of mostly positive economic data and the Bank of Japan’s hawkish forward guidance.

The country reported exports surged almost 10 percent year-on-year in December, helped by a revival in trade with China and strong demand for vehicles.

Factory activity shrank for the eighth consecutive month in January, while the services sector saw strong gains.

The Nikkei 225 Index dropped 0.8 percent to 36,226.48, while the broader Topix Index settled 0.5 percent lower at 2,529.22.

Seoul stocks ended slightly lower, with the Kospi falling 0.4 percent to 2,469.69 due to profit taking. Heavyweight Samsung Electronics dropped 1.6 percent, while trading firm Posco International jumped 3 percent.

Australian markets fluctuated before finishing marginally higher as a survey showed the country’s manufacturing sector moved into expansion territory in January.

Miners recovered from a sell-off earlier this month, offsetting losses in the healthcare and financial sectors. Pilbara Minerals soared 5.8 percent after slashing its full-year capital expenditure forecast.

Across the Tasman Sea, New Zealand’s benchmark S&P NZX-50 Index rose 0.5 percent to 11,856.61 after data showed inflation in the country slowed to its lowest rate in two and a half years in the fourth quarter, matching expectations.

Europe

European stocks have advanced on Wednesday after China’s central bank announced that it would cut the amount of cash that banks must hold as reserves by 50 basis points from February 5 for the first time this year to help the economy.

In addition, media reports suggest that authorities are considering a package of measures to stabilize China’s slumping stock market.

Investors are also digesting the latest business activity readings from the region and waited for cues from the upcoming ECB meeting.

While the German DAX Index has jumped by 1.5 percent, the French CAC 40 Index is up by 0.8 percent and the U.K.’s FTSE 100 Index is up by 0.3 percent.

Chipmaking equipment maker ASML Holding has moved sharply higher after fourth-quarter earnings beat expectations.

Barry Callebaut, the world’s biggest chocolate maker, has also jumped after sales volumes rose slightly in the three months to the end of November.

EasyJet has also shown a substantial move to the upside after the low-cost carrier said it expected winter losses to narrow this year.

Tullow Oil has also advanced after an announcement that it expects 2023 production to top previous guidance, while Fresnillo has spiked after it reported higher silver production for 2023.

German equipment manufacturer Siemens Energy has also skyrocketed after posting forecast-beating fiscal first quarter results.

Software company SAP has also soared after it announced plans to restructure 8,000 jobs in a push toward artificial intelligence growth.

Meanwhile, Ericsson has tumbled after the telecoms equipment supplier said it expects further decline in 5G gear demand from mobile operators this year.

French rolling stock maker Alstom has also shown a significant move to the downside after its quarterly sales missed estimates.

U.S. Economic Reports

The Energy Information Administration is scheduled to release its report on oil inventories in the week ended January 19th at 10:30 am ET.

Crude oil inventories are expected to decrease by 3.0 million barrels after falling by 2.5 million barrels in the previous week.

At 1 pm ET, the Treasury Department is due to announce the results of this month’s auction of $61 billion worth of five-year notes.

Stocks In Focus

Shares of eBay (EBAY) are moving sharply higher in pre-market trading after the e-commerce giant announced plans to reduce its current workforce by approximately 1,000 roles or an estimated 9 percent of full-time employees.

Chipmaker Advanced Micro Devices (AMD) may also move to the upside after New Street Research upgraded its rating on the company’s stock to Buy from Neutral.

On the other hand, shares of DuPont (DD) are seeing substantial pre-market weakness after the chemical giant provided disappointing fourth quarter and first quarter guidance.

Healthcare company Abbott Laboratories (ABT) may also come under pressure after reporting fourth quarter earnings in line with analyst estimates but providing a lackluster forecast for 2024.