Futures tied to the S&P 500 are trading down 0.13%, with Dow futures also down 0.12% and Nasdaq futures sinking 0.29%. Although earnings are rolling in, all eyes are on updates regarding a potential stimulus agreement. “The back and forth political discussions on the stimulus deal and continued election uncertainty give us extra justification for short-term market uneasiness,” David Bahnsen, chief investment strategist at The Bahnsen Group, told CNBC.
Snap is exploding 23% right now after reporting notably strong third quarter results. Q3 Non-GAAP EPS of $0.01 beat Street expectations by $0.06 while GAAP EPS of -$0.14 beat by $0.04. Meanwhile 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. “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.
Unfortunately Netflix is faring less well this morning. Shares are currently trading down 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.’
In other earning news Biogen has reported an earnings beat, with revenue topping expectations by $40M. Abbott Labs is moving marginally higher on the back of a beat for both revenue and earnings. And Verizon is up 1% after an earnings beat, but its revenue fell short by $100M; the company now expects adjusted EPS growth (non-GAAP) of 0 to 2%, an update from prior guidance for 2020 of -2 to 2%.
Meanwhile Ford has released further details of its upcoming self-driving vehicles, with its fourth-generation self-driving test vehicle beginning to roll out as soon as this month. Ford and Argo AI‘s self-driving test vehicle is built on the Escape Hybrid platform. The systems in Ford’s newest test vehicles are “launch-intent” in terms of the components needed to support commercialization. In other words, Ford says its team can continuously test and refine performance over the coming years to better prepare for launch.
And Nikola is surging 10% this morning after GM President Mark Reuss told CNBC that the company is looking forward to a partnership between the two companies even as discussions continue- he also confirmed that GM did carry out due diligence on Nikola. GM shares are also up 1.5%.
Deal confirmed: As expected, Pioneer Natural Resources will acquire all of the outstanding shares of Parsley Energy in an all-stock transaction worth $7.6B, inclusive of Parsley debt. Parsley shareholders will receive a fixed exchange ratio of 0.1252 shares of Pioneer common stock for each share of Parsley stock. RBC’s Scott Hanold reiterated his buy rating on Pioneer following the news, arguing that the deal represents a ‘slight positive’ for Pioneer based on the stronger free cash flow (FCF). Both already had a deep inventory, good balance sheets, and strong hedge books, Hanold noted.
In healthcare news, shares in Xeris Pharmaceuticals are rising 9% after the US FDA granted Fast Track designation for its XP-0863 injection for the treatment of acute repetitive seizures. “The FDA’s Fast Track designation… highlights our opportunity to dramatically improve care through the introduction of a ready-to-use injection formulation,” said CEO Paul Edick.
On the corona front, Reuters is reporting that AstraZeneca’s US Covid-19 vaccine trial is poised to resume as early as this week after the US FDA completed its review of a serious illness in a study participant. The late-stage US trial was put on hold since Sept. 6, after one of the participants fell ill with what was suspected to be a rare spinal inflammatory disorder called transverse myelitis.
