Wednesday’s Market Snapshot: Here’s What You Need To Know Right Now

Stock Market

Wall Street stock indexes are edging up slightly as investors are gauging the prospect for Congress to pass a new fiscal stimulus package before the November 3 US election.

The tech-heavy Nasdaq Composite Index and the S&P 500 Index are gaining both by about 0.4%. The Dow Jones Industrial Average is advancing 0.1%. Electric vehicle maker Tesla is up 1.4% as investors are eagerly awaiting its quarterly earnings report after the closing bell.

Snap is stealing the show on the earnings front today as shares are popping 34% right now after the company reported third-quarter sales that blew past analysts’ expectations. Q3 revenue of $679M surged over 52% Y/Y and smashed consensus estimates by $127.17M. Encouragingly, global daily active users came in at 249M (up 18% Y/Y) vs the 243.7M consensus and guidance of 242-244M. Non-GAAP EPS of $0.01 beat Street expectations by $0.06. “We believe Snap just proved that the 58% Y/Y Revenue growth they saw in Jan/Feb was no fluke” cheered RBC Capital analyst Mark Mahaney following the results.

In the red, Netflix shares are dropping more than 6% after the company’s soft global streaming subscriber additions disappointed investors. Net subscriber additions of 2.20M fell short of guidance of 2.5M and the Street at 3.6M, although revenue of $6.44B beat consensus by $60M. “All in, fundamentals were solid – ex-FX Global Streaming Revenue decelerated from 32% in Q2 to 26% in Q3, while Op Margins rose 170 bps Y/Y” commented RBC’s Mahaney, adding that the bullish long thesis on NFLX is still ‘well intact.’

Taking profits: iRobot is tanking 13% even as third-quarter results of the maker of Roomba and Braava robot vacuum cleaners crushed analysts’ expectations. 3Q revenue of $413.1 million, beat the Street consensus by about $98 million. Non-GAAP net income per share rose to $2.58 in the reported quarter from $1.50 a year ago, surpassing analysts’ estimates by $1.58. For the fiscal year ending Jan. 2, 2021, iRobot forecasts revenue of $1.365 billion to $1.375 billion compared with the $1.23 billion expected by analysts. The stock has served investors well this year with shares up a stellar 90% as of Oct. 20.

Here comes another stock which is declining despite a strong quarterly earnings report. Texas Instruments is down almost 3% after third-quarter revenue and earnings topped analysts’ estimates as the semiconductor company saw a rebound in the demand for its chips in the auto market. 3Q revenue grew 1.2% to $3.82 billion Y/Y. EPS declined 3% Y/Y to $1.45. The company handily exceeded analysts’ forecast of EPS of $1.28 on revenue of $3.45 billion.    

The company stated “while visibility for near-term demand has improved, we remain cautious, as the broader economic impact of the global pandemic could continue for several years.

Meanwhile, Nikola investors are pouring back into the embattled electric vehicle stock as enthusiastic comments by GM President Mark Reuss regarding the partnership deal talks are pushing shares up 9%.

“The opportunity to put our fuel cells into a class 7 and 8 vehicle is spectacular. We know there’s great operational cost advantages there, there’s great efficiencies and there’s great opportunities,” Reuss told CNBC.

PayPal is getting a lift with shares up almost 5% as the payments company announced the rollout of a new service for users to buy, hold and sell cryptocurrency directly from their account. The service will be available to US PayPal accountholders in the coming weeks. From early next year, the company plans to offer cryptocurrency as a funding source for purchases at its 26 million retailers worldwide.

In another setback for AstraZeneca, Reuters reported that Brazilian health officials said that a volunteer in a clinical trial of the COVID-19 vaccine developed by the drugmaker and Oxford University has died. Brazil’s regulator said vaccine testing would continue after the volunteer’s death. Shares are depreciating about 1%.

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