Stock futures are higher this morning as investors evaluate more earnings reports and await the rest of this week’s economic data; reports on weekly jobless claims and existing home sales are set to be released this morning ahead of tomorrow’s key inflation report; Cisco shares are sinking despite solid quarterly results amid concerns about the impact of the ongoing shortage in memory chips on the company’s margins; shares of Applovin are losing ground as the adtech company’s revenue growth disappointed investors; and AB InBev shares are rising after the Budweiser parent reported better-than-expected results and touted the impact of major sporting events. Here’s what you need to know today.
Stocks Point to Higher Open for Major Indexes
Stock futures are pointing to a slightly higher open Thursday after a relatively calm day of trading following the release of Wednesday’s jobs report. Futures tied to the Dow Jones Industrial Average were up 0.2% recently, while those linked to the S&P 500 and tech-heavy Nasdaq added 0.3%. Each of the major indexes closed slightly lower on Wednesday, ending a three-session streak of record highs for the Dow. Gold futures were down slightly this morning at around $5,090 an ounce, while WTI futures, the U.S. crude oil benchmark, ticked lower to $64.50 per barrel. Bitcoin, which has fallen sharply in recent weeks, was holding steady at just below $68,000. The yield on the 10-year Treasury note, which affects borrowing costs on all sorts of loans, was at 4.16% this morning, down from yesterday’s close of 4.18%.
Economic Data in Focus Ahead of CPI Report Friday
A busy week of economic data releases continues this morning with the release of reports on existing homes sales and initial jobless claims. The weekly jobless claims number, scheduled for release at 8:30 a.m. ET, is expected to come in at 225,000, down slightly from a week earlier, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal. The housing data, set to come out at 90 minutes later, is expected to show that home sales fell to 4.15 million last month from 4.35 million in December. The January jobs report released Wednesday showed that hiring was far stronger than expected and that the unemployment rate fell, leading investors to scale back expectations for the Federal Reserve to cut interest rates again any time soon. Market participants will be keenly focused on Friday’s Consumer Price Index data for further information that will affect the Fed’s thinking on rates.
Cisco Stock Falls Amid Memory Shortage Concerns
Shares of Cisco Systems (CSCO) are stumbling Thursday amid investor concerns about the impact of an ongoing memory chip shortage on the networking hardware maker’s margins. Cisco on Wednesday afternoon reported $15.35 billion in revenue and $1.04 adjusted earnings per share for its fiscal second quarter, each better than analysts’ estimates compiled by Visible Alpha. Cisco’s third quarter and full year projections also came in above the analyst consensus. However, the company reported higher total cost of sales than expected, as a memory shortage driven by high demand for AI hardware has sent prices in the industry to record highs in recent months. That could weigh on Cisco’s profit margins in the quarters to come. Cisco shares were down roughly 7% in recent premarket trading,
Applovin Slides as Revenue Growth Disappoints
Applovin Corp. (APP) shares are also losing ground even as the adtech company reported quarterly results that topped consensus Wall Street estimates. Applovin reported $1.66 billion in revenue along with adjusted EPS of $3.24. JPMorgan analysts said following the report that Applovin’s revenue growth may not have been quite as strong as some investors had hoped, and cut their price target to $500 from $650, citing the stock’s recent volatility as a concern. Applovin shares surged earlier this week after one of the multiple short sellers that have published reports on the company in the last year retracted its claims of money laundering. Other reports have alleged unethical, or “scammy,” business practices, and in October a report emerged that the Securities and Exchange Commission was investigating the company’s data collection practices. Applovin shares were down more than 7% ahead of the bell, trading at around $422. Coming into today’s session the stock was up 20% over the past 12 months, but well off the record high near $750 set last fall.
Budweiser Parent AB-InBev Reports Strong Results
Shares of Anheuser-Busch InBev (BUD) are rising this morning after the beer giant’s fourth-quarter results topped estimates amid enthusiasm about the impact of big sporting events on its sales. The Budweiser and Michelob Ultra maker posted revenue of $15.55 billion, while “underlying,” or adjusted EPS came in at $0.95, each metric beating analyst forecasts. The company said advertising around big sporting events like the recent Super Bowl, the ongoing Winter Olympics, and this summer’s World Cup make Anheuser-Busch “uniquely positioned to engage consumers and activate the category.” Shares of the beverage maker were up 3% recently.
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