Here are five things you must know for Thursday, February 17:
1. -- Stock Futures Move Lower As Russia Ukraine Crisis Simmers
U.S. equity futures moved lower Thursday, while the dollar booked gains against its global peers, as investors navigated headlines from the Russia-Ukraine crisis and prepped for a big earnings release from Walmart prior to the start of trading.
Tensions remain high on the border between Russia and Ukraine, where President Vladimir Putin has amassed more than 100,000 troops. Reports of a pullback yesterday ignited hopes of a peaceful outcome, but accusations by Russian-backed separatists that government soldiers have fired at them have intensified concerns that the conflict could quickly escalate.
In the U.S., however, minutes from the Federal Reserve's January policy meeting were far less hawkish than expect, with the central bank indicating it plans a measured and data-driven approach to near-term rate hikes over pre-determined path.
That helped tame expectations of a larger interest rate hike next month, particularly following a stronger-than-expected reading of January retail sales and the highest domestic oil prices in nearly eight years.
Still, with geopolitical tensions in Europe near boiling, and inflation expectations showing no signs of abating, Wall Street is looking at a weaker open Thursday, with futures tied to the Dow Jones Industrial Average are indicating a 145 point opening bell decline.
Futures tied to the S&P 500 are priced for a 22 point retreat while those linked to the Nasdaq Composite futures are indicating a further 100 point slide for the tech-focused benchmark as 10-year Treasury note yields hold at 2.012% in overnight trading.
2. -- Walmart Earnings On Deck With Price Rises, Wages, Margins In Focus
Walmart (WMT) shares edged higher in pre-market trading ahead of December quarter earnings that could test the world's biggest retailer's pledge on 'every low prices'.
Input costs have been rising for retailers and producers around the world, while U.S. companies have been hit by the twin surge in shipping rates and wage increases, a trio of movements that have narrowed profit margins for companies that lack pricing power with their customer base.
Walmart, which is set to earn around $1.50 per share on revenues of $151.1 billion for the three months ending in December, has said it can navigate the ongoing supply chain snarls without boosting prices, but analysts are also looking for a thinning profit margin as a result, even as it continues to hold market share over rivals such as Target (TGT) and Home Depot (HD).
Walmart shares were marked 0.30% lower in pre-market trading to indicate an opening bell price of $133.93 each.
3. -- Nvidia Shares Slip As Crypto Concern Clouds Gaming Sales Strength
Nvidia (NVDA) shares moved lower in pre-market trading after the chipmaker posted stronger-than-expected fourth quarter earnings but issued a muted-near term outlook for profit margins.
Nvidia said current quarter revenues would rise to around $8.1 billion, plus or minus 2%, following on from a January-quarter tally of $7.64 billion, thanks to what CEO Jensen Huang called "exceptional demand for NVIDIA computing platforms".
Nivdia had record gaming sectors revenues of $3.42 billion, as well as an all-time peak in data center revenues of $3.26 billion, but slowing sales of its 'CMP' chips, which are used by cryptocurrency miners, added a degree of concern to the chipmaker's outlook, with gross margins likely holding at the 67% mark for the current quarter.
"We believe while the Datacenter business is a tailwind, that is more than being offset by a product mix in the gaming business ... supply-chain related costs are a counterbalancing factor as well.," said BMO Capital Markets analyst Ambrish Srivastava.
Nvidia shares were marked 3.6% lower in pre-market trading to indicate an opening bell price of $255.55 each.
4. -- Applied Materials Shares Leap On Q1 Earnings Beat, Chip Sector Outlook
Applied Materials (AMAT) shares moved higher in pre-market trading after the semiconductor equipment posted record December quarter sales
Applied Materials said adjusted earnings for its fiscal first quarter rose to $1.89 per share, while sales jumped to $6.27 billion. Gross margins improved to 47.2%.
The chip sector equipment maker said its sees current quarter revenues in the region of $6.05 billion and $6.65 billion and adjusted earnings in the range of $1.75 to $2.05 per share. While the sales estimate was modestly shy of the Refinitv forecast, it largely echoes the bullish sentiment expressed by its European rival, ASML NV (ASML) last month.
"Demand is very strong and continues to grow. We believe wafer fab equipment spending could reach $100 billion in 2022," CEO Gary Dickerson told investors on a conference call late Wednesday. "And since we are already close to being sold out for the year, we also have a positive growth outlook for 2023."
Applied Materials shares were marked 2.25% higher in pre-market trading to indicate an opening bell price of $144.15 each.
5. -- DoorDash Shares Soar On Q4 Sales Beat, Post-Covid Outlook
DoorDash shares (DASH) shares rocketed higher in pre-market trading after the food delivery specialists topped Wall Street forecasts for its fourth quarter earnings and said demand is likely to remain firm even as the pandemic wanes.
DoorDash said December quarter sales rose 34% from last year to a Street-beating $1.3 billion, adding that gross orders for the three months ending in March would rise by around 3.6% to $11.6 billion, helping it produce a modest profit of around $250 million.
I think we've put to rest, I think, this question of what happens to demand as diners go back and eat inside restaurants (in the post-Covid era)," CEO Tony Xu told investors on a conference call late Wednesday. "It's very possible to eat inside of a restaurant and get delivery because we eat three times or more maybe per day, and that's over 100 shopping moments per month. And I think that's kind of what we've seen certainly in the restaurant delivery business."
DoorDash shares were marked 23.8% higher in pre-market trading to indicate an opening bell price of $117.50 each.
