News

Stock Futures Rise as Economic Data Spurs Hope for Fed Rate Hike Pause

1 2 3 4 5

4.8

Andrew R. Michaud

• August 31, 2023

Stock futures traded higher as recent economic data have spurred hopes the Federal Reserve is nearing the end of its rates-hiking cycle. Investors will be awaiting the release Thursday of the central bank’s preferred inflation gauge, the Personal Consumption Expenditures Index.

Salesforce Beats Expectations, Provides Strong Outlook

Salesforce (CRM), the cloud-based enterprise software provider, reported second-quarter earnings that beat analysts’ estimates and issued an outlook for the third quarter and fiscal year that also topped forecasts. Salesforce expects fiscal-year adjusted earnings of $8.04 to $8.06 a share on revenue of $34.7 billion to $34.8 billion, surpassing analysts' prediction of profit of $7.42 a share on revenue of $34.7 billion. The stock rose 5.3% in premarket trading.

Okta Shows Positive Signs with Better-Than-Expected Results

Okta (OKTA) shares rose 10% after the identity-management software company reported better-than-expected adjusted earnings and revenue in the second quarter. Okta also indicated signs of stabilization in spending on information technology. The company raised its fiscal-year forecast, expecting adjusted profit of $1.17 to $1.20 a share on revenue of $2.21 billion to $2.22 billion, exceeding analysts' projections of earnings of 91 cents a share on revenue of $2.18 billion.

UBS Group Reports Strong Second-Quarter Net Profit

UBS Group (UBS) gained 4.9% following its report of a second-quarter net profit of $29 billion. This success was achieved after the integration of Credit Suisse, the former rival that UBS acquired in June.

CrowdStrike (CRWD) Exceeds Expectations with Strong Q2 Performance

CrowdStrike, a leading cybersecurity company, posted impressive earnings results for the second quarter, beating analysts' expectations. On an adjusted basis, the company earned 74 cents per share, surpassing estimates of 56 cents. Additionally, revenue soared to $731.6 million from $535.2 million, also surpassing estimates. Annual recurring revenue experienced a significant surge of 37%, reaching $2.93 billion. These stellar numbers prompted CrowdStrike to raise its outlook for the fiscal year, resulting in a 1.7% increase in stock value.

Chewy (CHWY) Reports Surprise Profit and Strong Sales

Chewy, the popular online seller of pet foods and accessories, delivered unexpected positive news in its second-quarter report. Not only did the company generate a profit, but it also exceeded sales expectations. The quarter concluded with 20.4 million active customers, meeting expectations but showing a slight decline from the previous year. For the upcoming third quarter, Chewy forecasts net sales between $2.74 billion and $2.76 billion, slightly below the anticipated $2.79 billion. Consequently, Chewy shares experienced a 5% decline.

Victoria's Secret (VSCO) Faces Declining Sales and Surprise Loss

In premarket trading, Victoria's Secret faced a significant decline of 5.2% after announcing an unexpected loss in the second quarter. The company also projected a decrease in fiscal-year sales within the low-single digit range compared to the previous year's figures. This disappointing news reflects the challenges Victoria's Secret is currently grappling with.

Costco Wholesale (COST) Reports Modest Sales Growth in August

Costco Wholesale revealed that same-store sales experienced a 3.4% increase for the month of August. Notably, the US market displayed slower growth with same-store sales rising by just 2.8%. Moreover, e-commerce sales encountered a slight decline of 2.5%. Nevertheless, the company's shares witnessed a 0.3% uptick.

Upcoming Earnings Reports from Major Companies

Several notable companies are set to release their earnings reports on Thursday. Investors eagerly await updates from Broadcom (AVGO), VMware (VMW), Dell Technologies (DELL), Lululemon Athletica (LULU), Dollar General (DG), MongoDB (MDB), and Campbell Soup (CPB).