Five things you need to know before the market opens on Tuesday January 24:
1. -- Stock Futures Slip Lower With Earnings In Focus
U.S. equity futures edged lower Tuesday, while the dollar held gains against its global peers, as investors braced for a big day of corporate earnings on Wall Street.
Stocks have built solid, but not spectacular, year-to-date gains thus far as investors anticipate fading Fed rate hikes and the potential for a mild U.S. recession despite global inflationary pressures and a still-hawkish central bank.
The CME Group's FedWatch puts the chances of that hike, which would lift the Fed Funds rate to a range of between 4.5% and 4.75%, at a virtual lock, with an 82.5% chance of a similar hike in March.
Benchmark 10-year Treasury note yields were marked modestly lower in overnight trading, slipping 2 basis points to 2.502% while 2-year notes were pegged at 4.219%. The U.S. dollar index, which tracks the greenback against a baskets of its global peers, was marked 0.02% lower at 102.12
With around half of the market weight of the S&P 500 reporting earnings this week, however, focus will shift quickly to both December quarter profits and the near term outlooks provided by company executives across a range of sectors.
Refinitiv data suggests collective S&P 500 earnings will fall 2.9% from last year to a share-weighted $443.4 billion, although once the volatile energy sector is stripped away, that figure weakens to a decline of around 7.3%.
Heading into the start of the trading day on Wall Street, futures tied to the the S&P 500 are priced for a 2 point opening bell dip while those linked to the Dow Jones Industrial Average are set for a 65 point decline. The Nasdaq was marked 50 points lower.
2. -- Amazon Set To Offer Generic Drug Subscription Plan
Amazon AMZN said late Tuesday it would offer a subscription services for U.S. customers offering a range of generic drugs through at-home delivery.
The $5 per month plan, which Amazon has named RxPass, will include more than 50 mediations covering illness ranging from diabetes to high blood pressure. The fee would come on top of a standard $139 per year Amazon Prime membership.
The drive into healthcare comes as Amazon plans to trim thousands of workers, focused largely on Amazon Stores and its PXT organization, amid amid what it called an "uncertain and difficult" global economy.
Amazon shares were marked 0.37% lower in pre-market trading to indicate an opening bell price of $97.16 each.
3. -- Google Reportedly Facing DoJ Probe Into Ad Market Dominance
Alphabet (GOOGL), the parent company of Google, could face a U.S. Department of Justice probe into allegations that it's abusing its market dominance in the digital ad market, media reports suggested Tuesday.
Bloomberg first reported that the DoJ, which first sued Google -- along with eleven states Attorneys General -- for alleged anticompetitive and exclusionary practices in the search and search advertising markets in 2020, could filed its second complaint in Federal Court as early as today.
Google, which runs both an ad-buying and ad-selling platform in digital marketing, has faced antitrust fines from Europe's powerful Competition Commission totally more than $8 billion, including a $5 billion levy in 2018 that followed a lengthy investigation into contracts that tie makers of android-operated smartphones to the exclusive sale of its apps.
Google shares were marked 01.34% lower in pre-market trading to indicate an opening bell price of $156.625 each.
4. -- General Electric Shares Edged Lower Ahead of Q4 Earnings
General Electric (GE) shares edged higher in pre-market trading ahead of the industrial group's final quarterly earnings report as a full conglomerate prior to the opening bell.
GE, which spun-off its health care division, GE Healthcare Technologies, earlier this year, is also planning to separate its energy business, which will be called GE Vernova, through a tax-free deal sometime in 2024.
For GE's final update with contributions from all three units analysts are looking for an adjusted bottom line of $1.13 per share, up 22.8% from the same period last year, on revenues of $21.6 billion.
In late October GE reiterated its forecast for $4.5 billion in full-year free cash flows, even as it lowered its full-year profit forecast amid supply chain disruptions and cost pressures to between $2.40 to $2.80 per share.
GE shares were marked 0.34% lower in pre-market trading to indicate an opening bell price of $79.50 each.
5. -- Microsoft Earnings In Focus As Big Tech Drives Nasdaq Rally
Microsoft (MSFT) shares edged lower in pre-market trading ahead of the tech giant's second quarter earnings after the closing bell.
Analysts will likely focus on growth rates in the group's key Azure cloud division, amid both broader concerns for business investment in a weakening economy and narrowing profit margins.
Microsoft itself forecast lower-than-expected revenues from its umbrella 'intelligent cloud' division, which it sees between $21.25 billion and $21.55 billion, as well as its personal computing business, with a forecast range of between $14.5 billion and $14.9 billion, when it published first quarter earnings in October.
The group also unveiled plans earlier this month to slash around 5% of its global workforce, and take a $1.2 billion charge against its current quarter earnings, as it looks to 'align costs' with customer demand and boost investment in areas such as AI and other advanced technologies.
For the three months ending in December, Microsoft's fiscal second quarter, the Street is looking for an adjusted bottom line of $2.30 per share on revenues of around $52.97 billion.
Microsoft shares were marked 0.074% lower in pre-market trading to indicate an opening bell price of $242.40 each.
