Friday’s Headlines: Futures Dragged Over Stimulus Concerns
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
Lemonade (LMND) +12.6%
Redfin (RDFN) +10.4%
PagerDuty (PD) +10.1%
MercadoLibre (MELI) +9.4%
Sea Limited (SE) +9.0%
Moving Down ⬇️
Calavo Growers (CVGW) -4.2%
Hasbro (HAS) -1.9%
Planet Fitness (PLNT) -1.1%
Coca-Cola (KO) -1.1%
1. After hitting record highs this week, U.S. futures declined this morning, suggesting the recent uptick in demand for growth stocks is phasing out. The technology-heavy Nasdaq (QQQ) closed up almost 2% yesterday while the S&P 500 (VOO) rose over 1%. However, this morning's note of caution follows the signing of the $1.9 trillion stimulus bill into law yesterday as analysts still expect inflation to pick up when businesses reopen, leading to worries that the stimulus package could overheat the economy. The U.S. 10-year Treasury yield jumped again on Friday to above 1.6%, on track to rise for the seventh straight week. See more on the story here.
2. On Thursday, Wall Street’s favorite billionaire, Warren Buffett, saw his net worth surpass $100 billion for the first time ever. Berkshire Hathaway (BRK.B)’s Class A shares reached a record high of $399,650 on Wednesday, up 14% for the year, giving his own massive 38% stake in the company a value of $99.5 billion. Wall Street has grown bullish on Berkshire after the conglomerate reported better-than-expected 2020 results, with revenues only down 3.5% year-over-year (YoY), even as its railroad and retail businesses suffered from the pandemic. Many analysts also believe that Berkshire is well-positioned to benefit from the economic reopening as its insurance, transportation, utility, retail, and manufacturing should experience above-average growth in 2021. Read more here.
3. DocuSign (DOCU) shares slipped almost 4% in after-hours trading yesterday as muted guidance for 2021 overshadowed a strong earnings report. The e-signature company reported a net loss of $0.38 per share on higher-than-expected revenues of $430.9 million, up 57% YoY. DocuSign was a big winner from pandemic as workplaces flocked to its software for obtaining digital signatures during lockdowns, with billings of $534.9 million up an impressive 46% YoY and subscription revenue of $410.2 million up 59%. For the current quarter, DocuSign expects revenue of $436 million, above analysts' estimates of $419 million. The big worry for DocuSign is to what extent a return to offices could dent their growth and investors were likely disappointed with the lack of details on the company's plans for future expansion. See the full press release here.
Some more earnings from yesterday
Ulta Beauty (ULTA)
The beauty chain said it continues to feel the effects of the pandemic, posting revenue of $2.2 billion, down from $2.3 billion in the year-ago quarter, with same-store sales falling 4.8% in Q4. Ulta Beauty said it is optimistic about its business strengthening in 2021 as vaccines become more accessible and plans to open around 40 new stores this year. See the full report here.
Vail Resorts (MTN)
The mountain resort firm posted adjusted earnings of $3.62 per share on higher-than-expected revenue of $684 million, down 26% YoY. After crushing its earnings expectations, Vail Resorts' stock skyrocketed over 9% in after-hours trading yesterday as the company's renewals of ski passes drove its Q2 top line. Read the full press release here.
Get this week’s full earnings calendar here.