Credit: Shutterstock photoFutures for the S&P 500 index and Nasdaq 100 were mixed vs. fair value early Thursday. Alibaba ( BABA ) fell 3% as the Chinese e-commerce giant fell shy of earnings estimates . Apple ( AAPL ) reports later tonight, along with Amazon ( AMZN ) and Google parent Alphabet ( GOOGL )
Overnight, iPhone chipmaker Qorvo ( QRVO ) shot up on its earnings after Broadcom (AVGO) released positive sales figures early Wednesday, offering some hope for Apple's stock.
Meanwhile, Facebook (FB) sold off initially on earnings late Wednesday but then rebounded. PayPal (PYPL) fell modestly in early after-hours action, but then plunged late in the session,
[ibd-display-video id=3037819 width=50 float=left autostart=true] S&P 500 index futures were fractionally higher vs. fair value. Nasdaq 100 and Dow futures fell 0.1%.
Keep in mind that extended trading does not always translate into how a stock will open or close in the followingvvv regular session. Volume will be much heavier, while analysts and investors will have more time to sift through the figures and comments.
Facebook topped adjusted earnings and sales growth estimates, but shares sold off more than 4% in early after-hours trading after CEO Mark Zuckerberg said changes to its News Feed reduced users' time on the site by 50 million hours every day. Daily active users in the U.S. and Canada fell for the first time ever, falling to 184 million users from 185 million in Q3.
But late in the post-earnings call with analysts, Facebook said ad rates have soared . COO Sheryl Sandberg said News Feed changes may reduce how much time people spend on Facebook but shouldn't affect profitability. Facebook turned higher and was up about 1% in premarket trading .
Facebook closed down 0.1% at 186.89 in Wednesday's stock market trading .
PayPal
The online payments processor reported a 30% earnings-per-share gain for the fourth quarter. PayPal also gave largely in-line guidance for 2018. Shares initially fell modestly in late trade after rising to a record high during Wednesday's regular session. But then former parent eBay (EBAY), which also reported earnings after hours, said it would drop PayPal as its online payment provider for Dutch firm Adyen. The eBay deal with PayPal doesn't fully end until 2020 and eBay said it'll accept PayPal as an option until at least July 2023. But PayPal fell much further, trading down more than 8% in premarket action.
Apple Chipmakers
Qorvo reported better-than-expected fiscal Q3 results late Wednesday, but guided low for the current Q4, citing weaker handset sales. That offered further, implicit confirmation that Apple will cut guidance when it reports holiday-quarter results Thursday night.
But Qorvo shot up 11.5% to 80 in late trade. That's after rising nearly 6% so far this week, retaking its 50-day and 200-day moving average. Admittedly, Qorvo's late-night gains likely reflect the company's hints that it will get a bigger share of chips in the iPhone.
But Qorvo's recent action also suggests the bad news may be priced in, at least for iPhone chipmakers.
Before Wednesday's open, Broadcom, another Apple chipmaker, reported preliminary sales that were above estimates, while also guiding high for current-quarter revenue. Shares rose 2.9% during the regular session, though they closed below their 200-day moving average.
Apple
As for Apple itself, the tech titan's shares closed up 0.3% to 167.43.
Apple is still down for 2018, trading well below its 50-day moving average and a 176.35 flat-base buy point. Worse, the relative strength line , which tracks a stock's performance vs. the S&P 500 index, is holding at its worst levels since mid-June. Investors should be focusing on stocks that are truly leading the market.
Qorvo and other suppliers and other measures suggest that Apple is seeing weaker iPhone X demand. But is that priced into the market?
Apple is likely to move sharply on earnings, but as Facebook and PayPal show, it can be a wild ride.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
