US stock futures tip lower after Apple and Amazon earnings miss estimates, while ether hits a record high
- US stocks looked set to open lower Friday after Amazon and Apple posted disappointing Q3 results.
- The megacap techs said supply-chain troubles were to blame, prompting concerns about the impact on companies in the next quarter.
US stock futures fell Friday as disappointing quarterly updates from Apple and Amazon dented investor optimism around earnings season, with worries growing about supply chain headwinds for companies.
Futures on the Dow Jones slipped 0.1%, while those on the S&P 500 lost 0.5% and the Nasdaq fell 0.8% as of 5:35 a.m. ET, indicating a lower start to trading later in the day. The three major indices all logged gains at the close Thursday.
Apple shares dropped 3%, and Amazon shed 5% in premarket trading, after the tech giants released earnings reports that missed Wall Street expectations. The third-quarter results were hurt by labor shortages and supply chain troubles, the companies said.
Apple, which missed revenue targets for its key iPhone and MacBook businesses, said supply chain constraints led to a roughly $6 billion sales hit. Amazon said it expects to take on "several billion dollars" of extra costs due to the same difficulties.
"Both had most to lose from supply chain woes of the past few months, and neither's results gave much for investors to cheer as a result," said Mark Crouch, an analyst at investment platform eToro.
Their reports raised fears about the impact on companies of continued disruptions to supply into the end of the year, the key holiday sales season.
Markets mainly shrugged off Thursday's figures that showed the US economic recovery losing steam in the third quarter. Gross domestic product grew at an annualized rate of 2%, lower than the 2.7% expected by economists.
That slowing isn't enough to prompt the Federal Reserve to rethink its expected move next week to start tapering, or cutting back asset purchases, according to Jeffrey Halley, a senior market analyst at Oanda. Consumer spending is picking up, and forecasters expect fourth-quarter GDP to rebound, he said in a note.
European stocks also traded lower in the wake of Amazon and Apple results. Investors were weighing a morning of earnings from banks BNP Paribas, NatWest, Glencore, BBVA, and Bank of Ireland.
The European Central Bank on Thursday decided to keep interest rates and monetary policy unchanged despite inflation pressures. Eurozone inflation in October rose at the fastest pace since July 2008, a preliminary reading out Friday showed. Consumer prices hit 4.1%, above expectations of a 3.7% rise, as a result of rising energy prices, supply constraints, and strong consumer demand.
London's FTSE 100 stock index lost 0.2%. The pan-continental Euro Stoxx 600 fell 0.4%, and Frankfurt's DAX dropped 0.8%.
Asian equities traded mixed, with Chinese shares bucking the trend. Factors like higher inflation, updates from major central banks, and lower economic growth are still weighing on sentiment.
The Shanghai Composite rose 0.8%. Tokyo's Nikkei added 0.2%, and Hong Kong's Hang Seng fell 0.7%.
Ether moved up 7% to hit a record high of $4,402.13, according to data from CoinDesk, on Thursday. The world's second-most popular cryptocurrency is 486% higher so far this year. Bitcoin added 2% to reach $60,594.
Aside from bitcoin, ethereum is a must-have "as it looks set to have an explosive end to 2021 and a very strong 2022, while also having very strong fundamentals," said Nick Spanos, co-founder of Zap Protocol.
Oil futures posted small gains. Brent crude was up 0.4% at $84 a barrel, and West Texas Intermediate moved 0.3% higher to $83.08 a barrel.