Tech-Stocks Under Pressure in the Pre-Markets

We’re continuing pre-market indexes where we left them yesterday afternoon: under pressure, especially on the tech side. The tech-heavy Nasdaq is down -150 points at the hour, with the Dow -70 points and the S&P 500 -24. It’s shaping up like a down week in the markets overall, despite a nice push higher following the most recent Fed policy adjustment mid-week.

That adjustment, while promising to dry up the cheap money that’s been accommodating the markets for nearly two years, has answered plenty of questions about the near-term economy — and as we know, the market abhors very little worse than uncertainty. Also, the Fed made clear that ending its asset buyback program by the end of winter does not necessarily equate immediately rising interest rates.

However, the spread of the Omicron variant of Covid-19 is becoming a problem in Europe, and has even spread to regions in the U.S. This highly infectious strain promises to be with us for a lot longer, which helps add more uncertainty to the market. Two very important things should keep panic-selling at bay, though: 1) Omicron has not yet asserted itself as a more lethal strain of coronavirus, in fact it may be less so than the Delta variant, and 2) vaccinations work, at least for keeping away serious disease, hospitalizations and death.

Thus, even with a new Covid-19 outbreak on a global scale throughout the winter months of early 2022, no shutdowns appear in the offing. Recall that Pfizer Inc. PFE is also working to get its antiviral pill to market, which would diminish effects of Covid the way Theraflu works for someone who contacts influenza. There are still risks things might not be as hunky dory elsewhere in the world, but that’s pretty constant. There’s also increasing China-Taiwan tensions, if we’re looking for things to worry about.

In any case, we’re not looking at today’s sell-off meaning much — except, perhaps, a good time to go shopping. If a preferred company in a strong industry with a good Zacks Rank has sold off 10% or more, it may be worth it to take another look today.

Olive Garden parent Darden Restaurants, Inc. DRI beat estimates on both top and bottom lines in its fiscal Q2 earnings report this morning: earnings of $1.48 per share on $2.27 billion in sales outpaced the $1.43 per share and $2.22 billion in the Zacks consensus. Full-year revenue guidance of between $9.55-9.70 billion is higher than our $9.54 billion estimate, but full-year earnings guidance of between $7.35-7.60 per share is notably below the $7.62 in the Zacks consensus. Also, CEO Gene Lee is stepping down from May 2022, succeeded by the company’s COO Rick Cardenas.

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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.