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Wednesday, May 8th, 2024

Pre-market futures are taking a breather this morning. After five straight sessions in the green for the Dow (only marginally positive by Tuesday’s closing bell, however), the blue-chip index is -78 points at this hour. The Nasdaq is falling even faster, -113 points, as its three-day winning streak came to an end yesterday. The S&P 500 is down -22 points at this point in today’s early trading, while the small-cap Russell 2000 is -15.

It’s a week relatively devoid of impactful economic prints. This is especially true relative to Jobs Week last week and CPI/PPI out next week. These are the metrics economists and market participants alike look toward to help calculate the nearness of the first interest rate cut since the onset of the pandemic, now more than four years ago. After today’s open, we’ll get Wholesale Inventory numbers and some select appearances from Fed members, but these aren’t expected to change the trading trajectory.

One company that has proven to have an outsized impact on the market is Tesla TSLA. This morning, reports from Reuters are that the SEC is looking into whether the company committed wire fraud and securities infractions related to Tesla’s claims about its self-driving, auto-pilot system. This is not to say an indictment will be forthcoming, but the federal government is looking into it. Tesla shares are down -3.6% in early trading.

Quarterly earnings reports paint an unflattering picture this morning. Most of this pivots on overall consumer behavior, across many lines; we’ve seen the consumer shy away from higher costs in previous earnings reports from Starbucks SBUX and elsewhere. Spotify SPOT shares are down -19% at this hour on a big swing to negative earnings (-$0.21 per share versus +$0.16 expected and +$0.01 per share reported a year ago). Revenues came in slightly ahead of estimates to $1.9 billion in the quarter, but a 50-basis-point (bps) slide in Gross Margins offset growth in Gross Merchandise Volumes (+23% year over year) and Gross Payment Volumes (+60%).

Uber UBER posted similar Q1 results ahead of today’s open. Earnings swung to a negative -32 cents per share from an expected +21 cents (and well below the year-ago -8 cents per share) on revenues of $10.13 billion, which eked out a beat over the Zacks consensus. Gross Bookings rose +20% year over year and adjusted EBITDA reached +82% to $1.4 billion, but shares are tumbling more than -7% so far in pre-market activity.

Hain Celestial HAIN, meanwhile, missed on both top and bottom lines. Negative earnings of -12 cents per share missed the +7 cents anticipated (off the +8 cents per share posted a year ago) on $438.4 million in revenues, which was well short of the $465.7 million analysts were looking for. Business in North America fell -9.8% in the quarter for the tea and healthy snack distributor, which was slightly offset by a +9.3% gain in its International segment. Free cash flow grew an impressive +104% year over year, which has helped the stock gain +6% in early trading.

Meanwhile, Affirm Holdings AFRM posted a good fiscal Q3 this morning. An earnings loss of -43 cents per share was an improvement on the -70 cents expected (and -69 cents per share reported a year ago) on $576 million in revenues, which outpaced the $548 million in the Zacks consensus, +51% year over year for the “buy now, pay later” fintech company. Next-quarter revenue guidance has increased to $595 million from the $569.4 million previously projected, and shares in the pre-market session are up +2.3%.

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