Stocks Edge Lower, Intel, Chevron, Visa, Bed Bath & Beyond In Focus – Five Things To Know

Stocks futures slip lower with earnings, inflation in focus; Intel tumbles after surprise Q4 loss, grim chip sector outlook; Chevron earnings up next after $75 billion buyback reveal; Visa shares higher after solid Q4 powered by travel spend and Bed Bath & Beyond nears bankruptcy as JPMorgan calls in loan.

Five things you need to know before the market opens on Friday January 27:

1. — Stocks Futures Slip Lower With Earnings, Inflation In Focus

U.S. equity futures edged lower Friday, with tech leading declines, as investors expect a grim quarterly update from Intel to at least temporarily blunt market optimism following a firm rally yesterday that lifted stocks to their highest levels in more than a month. 

Intel’s surprise December quarter loss, paired with a less-than-stellar outlook for PC and data center sales, was quickly followed by reports the the U.S. has convinced Japan and the Netherlands — home to chip-designing giant ASML — to join it in limiting the export of high-end semiconductors to China.

The potential for another round of trade tensions between Washington and Beijing, just as the world’s second-largest economy begins to ramp-up growth and investment following three years of pandemic restrictions, kept a lid on stocks overnight and looks to hold down early gains on Wall Street.

At the same time, traders are noting an important move higher in Treasury bond yields following yesterday’s stronger-than-expected reading of fourth quarter GDP, which showed the U.S. economy advancing at a 2.9% clip, and the lowest tally of weekly jobless claims since May of last year.

The data has yet to alter rate hike forecasts for the Fed’s two-day meeting next week in Washington, but alongside today’s PCE Price index reading could provide fuel for policymakers who argue that inflation continues to run at unacceptably high levels in the world’s biggest economy.

Economists expect a modest nudge higher in the core PCE reading, the Fed’s preferred inflation gauge, on a monthly basis but a pullback to an annualized rate of 4.4% over the month of December when the figures are released at 8:30 am Eastern time.

The CME Group’s FedWatch still suggests a 98.1% chance of a 25 basis point rate hike next week, with odds of a similar move in March pegged at 84.3%.

Benchmark 10-year Treasury note yields, meanwhile, were marked 3 basis points higher at at 3.539% in overnight trading while 2-year notes bumped to 4.201%. The U.S. dollar index, which tracks the greenback against a baskets of its global peers, was marked 0.01% lower at 101.835.

Heading into the start of the trading day on Wall Street, futures tied to the S&P 500 are priced for a 14 point opening bell decline while those linked to the Dow Jones Industrial Average are set for a 42 point dip. The tech-focused Nasdaq, which closed at a four-month high of 11,512.41 points, was marked 75 points lower.

In overseas markets, Europe’s Stoxx 600 added 0.09% in early Frankfurt trading, while Asia’s region-wide MSCI ex-Japan index touched a fresh seven-month high, rising 0.16%, as markets in China re-opened following the five-day Lunar New Year holidays.

2. — Intel Tumbles After Surprise Q4 Loss, Grim Chip Sector Outlook

Intel  (INTC) – Get Free Report shares plunged lower in pre-market trading after the chipmaker post a surprise fourth quarter loss and said lingering weakness in PC demand would pressure margins and clip near-term earnings. 

Intel’s adjusted bottom line for the December quarter was pegged at a 10 cents per share loss, while the Street had forecast a 20 cents per share profit. Reported earnings were -16 cents per share. Revenues were also light at $14 billion, a tally Intel expected to decline to between $10.5 and $11.5 billion over the current quarter, while gross margins fell to 43.8%.

Gross margins for the three months ending in March are now expected to narrow to around 34.1%, nearly half of the chipmaker’s long-term target of around 60%.

“We stumbled … we lost share … we lost momentum,” CEO Pat Gelsinger told investors on a conference call late Thursday. “We think that stabilizes this year.”  

Intel shares were marked 11% lower in pre-market trading to indicate an opening bell price of $26.77 each.

3. — Chevron Earnings Up Next After $75 Billion Buyback Reveal

Chevron  (CVX) – Get Free Report shares were edged higher in pre-market trading ahead of the oil major’s fourth quarter earnings prior to the opening bell.

Chevron posted profits of $11.2 billion, or $5.78 per share, over its fiscal third quarter, with operating cash flows of around $15.3 billion. Analysts expect a bottom line of $4.38 per share on revenues of around $54.6 billion when the group reports fourth quarter earnings prior to the opening bell on Friday.

Chevron said it would pay a quarter dividend of $1.51 per share, up from $1.42 per share, while tripling its share buyback plans with a new $75 billion authorization. The dividend is payable to payable on March 10 to holders of record on February 16.

Chevron shares were marked 0.05% higher in pre-market trading to indicate an opening bell price of $187.89 each.

4. — Visa Shares Higher After Solid Q4 Powered By Travel Spend

Visa  (V) – Get Free Report shares moved higher in pre-market trading after the world’s biggest credit card company posted better-than-expected first quarter earnings thanks in part to a surge in cross-border spending amid the ongoing travel boom.

Dow component Visa earned $2.18 per share over the three months ending in December, the group’s fiscal first quarter, topping the Street consensus forecast of $2.01, per share, as group revenues jumped 11.8% to a Street-beating $7.9 billion.

Cross border spending was up 22%, Visa said, with payments volume up 7% on a constant-currency basis.

“I continue to see a bright future for Visa and believe that we have the right strategy to invest in and capitalize on the opportunities ahead across consumer payments, new flows and value added services,” said CEO Al Kelly, who moves to the role of executive chairman next month to make room for incoming boss Ryan McInerney.   

Visa shares were marked 1.11% higher in pre-market trading to indicate an opening bell price of $227.20 each.

5. — Bed Bath & Beyond Nears Bankruptcy As JPMorgan Calls In Loan 

Bed Bath & Beyond  (BBBY) – Get Free Report shares nudged higher in pre-market trading after the struggling home retailer said it received a default notice from JPMorgan linked to a key credit agreement and warned that it could filed for Bankruptcy protection 

CNBC reported last week that the group is seeking to sell its business operations, including the buybuy Baby division, while raising around $100 million in fresh loans.

Earlier this month, Bed Bath & Beyond posted a wider-than-expected November quarter loss of $393 million and said it’s exploring “multiple paths”, including bankruptcy, as part of its turnaround effort under CEO Sue Gove.

Bed Bath & Beyond “does not have sufficient resources to repay the amounts under the credit facilities and this will lead the company to consider all strategic alternatives, including restructuring its debt under the U.S. Bankruptcy Code,” it said in a Securities and Exchange Commission filing late Thursday. “The company is undertaking a number of actions in order to improve its financial position and stabilize its results of operations including … cost cutting, lowering capital expenditures, and reducing its store footprint including related distribution centers.”

Bed Bath & Beyond shares were marked 12.4% higher in pre-market trading to indicate an opening bell price of $2.58 each. The stock has fallen around 90% since activist investor Ryan Cohen dumped his stake in the group in mid-August. 

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