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XAutoplay: On | Off Stock futures pointed lower early Wednesday morning following a new wave of mixed earnings and President Trump’s abrupt firing of FBI Director James Comey. Nvidia (NVDA), whose chips are used by Tesla (TSLA), rocketed on its earnings. Coherent (COHR), whose OLED gear makes it an Apple (AAPL) play, blew out estimates once again. Meanwhile, Snap (SNAP) on Wednesday will report Q1 figures, including Snapchat user growth, following its March IPO.
Dow Jones industrial average futures retreated 0.2% below fair value. Dow component Walt Disney (DIS) shares fell on ongoing ESPN woes, though markets also could be reacting to Comey’s surprise ouster and potential fallout. S&P 500 futures sank 0.1%. Nasdaq 100 futures fared better, just below break-even.
In Tuesday’s session, the Nasdaq composite and the S&P 500 index both hit all-time highs intraday. But by the close, the S&P 500 lost 0.1% and the Dow industrials 0.2%, while the Nasdaq clung to a 0.3% gain.
Apple and Tesla were positives. Apple rose 0.6% to 153.99, hitting a fresh all-time high. The iPhone maker’s stock is up 7.2% so far this month. Tesla leapt 4.6% to 321.26, close to recent all-time highs, as an analyst said the electric car maker’s stock is tough to short.
Nvidia and Coherent were big after-hours winners.
Nvidia earnings leapt 85% in its latest quarter, much better than expected. Sales powered ahead 48%, modestly topping views.
Nvidia shares soared 11.3% to 114.53 in late trade. Nvidia, which had been consolidating for the past three months, suddenly is much closer to a 121.02 buy point.
The chipmaker has vastly expanded from its PC gaming-graphics roots to artificial intelligence and autonomous driving. Nvidia chips are used by Tesla. Nvidia also has various other autonomous relationships, including one with China’s Baidu (BIDU). Meanwhile, there has been speculation that Nvidia would return to Apple Macs.
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Coherent supplies laser parts used in the manufacture of OLED, or organic light-emitting diode, displays. OLED displays are in many high-end TVs and some new smartphones, with expectations that the Apple iPhone 8 will use OLED tech.
Coherent earnings shot up 180% as revenue more than doubled, once again easily topping views.
Coherent shares rose 9.1% to 240 in late trade, which would be a new all-time high. Coherent is extended from any actionable buy point.
If you owned Nvidia, Coherent or Microchip (MCHP) heading into earnings, you’re probably celebrating. If you owned Yelp (YELP) or Acacia Communications (ACIA), you’re likely facing huge losses at Wednesday’s open. Stocks can surge or crash on earnings reports. To minimize risk while still reaping the rewards, consider this earnings options strategy.
Meanwhile, Snapchat operator Snap will be in the spotlight late Wednesday with its first earnings report since coming public at the start of March. The social media upstart should post another adjusted loss amid huge revenue growth. But analysts and investors will be focused on Snapchat’s user growth amid concerns that Facebook (FB) has successfully cloned many of Snapchat’s most popular features, especially on the Instagram app.
While Snap is popular among North American teens and young adults, it’s not clear if it can expand from that enviable demographic base.
Japan’s Nikkei rose 0.2% in Wednesday intraday trade while China’s Shanghai composite edged up 0.3%. South Korea’s Kospi fell 1%. The Kospi hit a record high on Monday, with Korean markets closed Tuesday for the country’s presidential election.