David Kudla, CEO of Mainstay Capital Management, on GameStop shares and the huge demand for technology stocks.
US stock futures were under pressure on Wednesday morning as investors devoured an onslaught of earnings reports ahead of the Federal Reserve’s first interest rate decision of the year.
Dow Jones Industrial Futures is down 358 points, or 1.16%, while S&P 500 futures and Nasdaq futures are down 1.25% and 0.85%, respectively.
Looking at equities, the Dow component Microsoft Corp. ‘s quarterly profit rose more than 30% year-on-year as the COVID-19 pandemic drove demand for its cloud-based products and video games. Both earnings and revenue were more than Wall Street’s estimates.
Elsewhere in the Dow, Boeing Co lost a record $ 11.9 billion in 2020 because of the company’s defeat due to the pandemic and grounding of the 737 Max jet. The planmaker said the debut of its 777X jet will be postponed again until late 2023.
Apple Inc., Facebook Inc. and Tesla Inc. is one of the companies that will report their quarterly results after the closing clock.
In transactions, Allstate Corp. entered into an agreement to sell its life insurance unit for $ 2.8 billion to private equity firm Blackstone.
Meanwhile, the short-term pressure that GameStop Corp’s shares have risen 642% since Jan. 12 continued on Wednesday, with shares more than doubling early in the session. Hedge fund Melvin Capital, which received a $ 2.75 billion infusion from other funds, covered its loss position on Tuesday afternoon, fund manager Gabe Plotkin told CNBC.
Shares of BlackBerry Ltd. and Bed Bath & Beyond Inc., two other companies that are also getting short press, remain in focus.
The Federal Reserve is expected to keep the policy on track on Wednesday afternoon after its first meeting during the Biden government. Traders will review the Fed’s statement for clues on how the central bank could change its asset buying program in the coming months.
In commodities, West Texas Intermediate crude fell 1 cent to $ 52.60 a barrel and gold fell from $ 14.10 to $ 1,836.80 an ounce.
European markets traded sharply across the board with Germany’s DAX 30 increasing the decline by 1.84%, while the French CAC 40 and the British FTSE 100 were weaker by 1.27% and 1.08 respectively. %.
In Asia, Hong Kong’s Hang Seng Index fell 0.32%, China’s Shanghai Composite up 0.11% and Japan’s Nikkei 225 up 0.31%.