Here are the most important news, trends and analysis that investors need to start their trading day:
- Stock futures turn positive, reversing big overnight losses
- Earnings season continues with fast food and media before the bell
- Tesla sees more supply chain challenges, no new models this year
- GDP grew at a 6.9% pace in Q4, beating estimates despite omicron spread
- Biden gets a chance to a replace a longtime liberal on Supreme Court
1. Stock futures turn positive, reversing big overnight losses
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Dow futures turned positive Thursday after falling more than 500 points overnight as the market's recent volatility persisted. Nasdaq futures also ticked higher after rebounding from steep overnight declines. The Dow Jones Industrial Average on Wednesday closed down nearly 130 points, or 0.4%, after Federal Reserve Chairman Jerome Powell left plenty of room to raise interest rates to combat rising inflation. The market expects four rate hikes this year, starting as soon as March when bond-purchase tapering is projected to end. The Dow had been up more than 500 points at Wednesday's highs but rolled over after the Fed's post-January meeting update. The S&P 500 dipped. The Nasdaq edged slightly higher but remained in a deep correction.
- Beaten-down cloud software stocks were getting a big boost. Shares of ServiceNow and Qualtrics each jumped more than 10% in Thursday's premarket after topping estimates with quarterly results and delivering upbeat forward guidance.
- Recently struggling Netflix was up 4% in the premarket after Pershing Square's Bill Ackman revealed a more than 3.1 million share purchase of the video streaming giant, making him a top 20 shareholder.
2. Earnings season continues with fast food and media before the bell
McDonald's on Thursday reported fourth-quarter earnings and revenue that fell short of expectations as higher costs weighed on its profits, marking the fourth miss in the past eight quarters. The company's shares fell more than 2% in premarket trading. Excluding charges related to the sale of McD Tech Labs to IBM and other items, McDonald's earned $2.23 per share. Net sales rose 13% to $6.01 billion.
Comcast reported fourth-quarter earnings Thursday that beat estimates on the top and bottom line but missed on high-speed internet customer net additions. Its shares rose more than 1.5% in the premarket. Comcast, which owns CNBC and NBC as well cable and broadband operations and theme parks, also announced increases in its dividend and its stock buyback plan.
3. Tesla sees more supply chain challenges, no new models this year
Tesla late Wednesday delivered better-than-expected adjusted earnings and revenue in the fourth quarter. However, the electric auto maker warned that supply chain disruptions could persist throughout 2022.
- CEO Elon Musk provided a "product road map" update, saying Tesla would not release any new model vehicles this year, confirming no Cybertruck in 2022.
- Musk also said Tesla is not currently working on a $25,000 car. "At some point we will. We have enough on our plate right now," he added. Tesla shares fell 1% in the premarket.
4. GDP grew at a 6.9% pace in Q4, beating estimates despite omicron spread
The government on Thursday morning reported its first look at fourth-quarter economic growth, saying GDP rose at an annual rate of 6.9%, compared to estimates of 5.5%, despite the Covid omicron spread. The increase was well above the unrevised 2.3% growth in the third quarter. Q4 brought an end to a 2021 that saw a 5.7% increase in annualized GDP, the strongest pace since 1984.
Bond yields ticked lower early Thursday. The benchmark 10-year Treasury yield remained above 1.8% after climbing Wednesday as traders took Powell's post-meeting comments to mean more aggressive policy tightening may be ahead to fight inflation and protect the labor market.
5. Biden gets a chance to a replace a longtime liberal on Supreme Court
President Joe Biden and Supreme Court member Stephen Breyer are scheduled to appear together at the White House on Thursday, with the 83-year-old liberal justice set to announce his retirement, a source familiar with the matter confirms to NBC News. Breyer's departure from the nation's highest court gives Biden a chance to fulfill his campaign promise to nominate a Black woman to the bench. Conservatives hold a 6-3 majority on the Supreme Court after the Senate confirmed three nominees of former President Donald Trump.