Here are five things you must know for Tuesday, October 26:
1. -- Stocks Futures Extend Gains On Earnings Power
U.S. equity futures moved higher again Tuesday, potentially taking both the Dow and the S&P 500 to fresh record highs, as earnings continue to power market performance in the face of surging energy prices and inflation prospects.
Tesla's TSLA breach of the $1 trillion market value barrier yesterday, as well as a stronger-than-expected start to a busy week for U.S. corporate earnings, lifted the S&P 500 to a fresh record close, while oil prices and bank stocks helped push the Dow to its latest all-time closing peak.
Earnings will take center-stage again Tuesday, with pre-market updates from General Electric (GE) - Get General Electric Company Report, 3M (MMM) - Get 3M Company Report, Eli Lilly (LLY) - Get Eli Lilly and Company Report, Lockheed Martin (LMT) - Get Lockheed Martin Corporation Report and Raytheon (RTX) - Get Raytheon Technologies Corporation Report, with Microsoft (MSFT) - Get Microsoft Corporation Report, Twitter (TWTR) - Get Twitter, Inc. Report, and Advanced Micro Devices (AMD) - Get Advanced Micro Devices, Inc. Report following after the bell.
With 119 companies reporting so far this earnings season, collective S&P 500 profits are set to rise 34.8% from last year to $430.3 billion, according to data from Refinitiv.
On Wall Street, futures contracts tied to the Dow Jones Industrial Average are indicating a 105 point opening bell gain, while those linked to the S&P 500 are priced for a 19 point move to the upside.
Futures tied to the tech-focused Nasdaq Composite are indicating a 98 point advance as benchmark 10-year Treasury note yields ease to 1.623% ahead of a $60 billion auction of 2-year notes later in the session.
2. -- Facebook Gains on Mixed Earnings, Zuckerberg Hits Back at Whistleblower Allegations
Facebook (FB) - Get Meta Platforms Inc. Class A Report shares jumped higher in pre-market trading after the social media giant posted a mixed set of third quarter earnings while unveiling plans to report profits from its "metaverse" project as a separate division in the years ahead.
Founder and CEO Mark Zuckerberg also pushed back at the recent stream of allegations raised against the group, including by high-profile whistleblower Frances Haugen, calling the idea that Facebooks pushes divisive content "deeply illogical".
"We make money from ads, and advertisers consistently tell us they don't want their ads next to harmful or angry content," Zuckerberg wrote in a blogpost. "And I don't know any tech company that sets out to build products that make people angry or depressed."
Facebook shares were marked 2.4% higher in pre-market trading to indicate an opening bell price of $336.50 each.
3. -- Tesla Joins Trillion Club, Musk Worth More Than Nike
Tesla (TSLA) - Get Tesla Inc Report shares edged lower in pre-market trading, taking the value of founder and CEO Elon Musk's clean-energy car company deeper into $1 trillion territory following the first breach of the benchmark earlier on Monday.
Tesla, which took just over ten years as a public company to reach the iconic valuation, joins an elite list of only five other American companies that have ascended that peak: Microsoft, Apple, Facebook, Google parent Alphabet (GOOGL) - Get Alphabet Inc. Class A Report, Amazon (AMZN) - Get Amazon.com, Inc. Report.
Musk noted his satisfaction upon reaching the milestone, Tweeting "Wild $T1mes" from his verified account, but added that the final push begin made by news of a 100,000 Model 3 order from Hertz Global was "strange" ... "Tesla is very much a production ramp problem, not a demand problem."
In any event, Tesla is now worth more than nearly all of its global competitors combined, with yesterday's 12.66% surge in the share price pegging Musk's personal wealth at $288.6 billion - more than the entire market capitalization of sportswear giant Nike NKE.
Tesla shares were marked 0.1% lower in pre-market trading to indicate an opening bell price of $1,024.00 each.
4. -- Cathie Wood, Elon Musk Debate Inflation 'Curve'
Not content with extending his lead as the world's richest man, nor celebrating his companies induction into the trillion dollar club, Tesla founder and CEO Elon Musk was able to find time yesterday to weigh in on the global inflation debate with star fund manager Cathie Wood.
Wood, who runs the Ark Investment Management group -- which includes the ARK innovation ETF ARKK -- is a vocal Tesla proponent and one of its most important investors. She has also advance the argument that technical innovation, including advancements in AI and blockchain technology, will "bend" the inflation curve in the years ahead, slowing price increases and potentially trigger a period of global deflation.
Musk replied to Wood's comments through his verified Twitter account by noting that "I don't know about the long-term, but short-term we are seeing strong inflationary pressure."
Market-based gauges of inflation expectations are running at seven-year highs, while the Fed's preferred inflation benchmark, the core PCE price index, sped to the fastest pace in 30 years last month.
5. -- Short-Sellers Eye Trump Media SPAC After 700% Surge
The so-called black check acquisition group that plans to take former President Donald Trump's media company public is starting to attract short-sellers as its value surges to $2.7 billion in the absence of a business plan, employees, funding or strategy.
Digital World Acquisition Corp. DWAC, which listed in early September at a value of just under $10, has surged more than 700% since unveiling plans to take Trump Media & Technology Group public last week.
Miami-based Digital World CEO Patrick Orlando told Reuters Friday that details of the merger, as well as a full disclosure filing with the Securities & Exchange Commission, could come as early as this week, although questions remain as to whether companies like Apple would allow a Trump-backed app onto its iPhones or whether Amazon would allow its web-hosting division to support it.
“We are short $DWAC. Now that initial excitement has passed, we see only risks for investors in near future. Based on Trump's track record, at current price, renegotiation is likely to keep more of the merged company for him" noted short-seller Iceberg Research Tweeted late Monday.
DWAC shares were marked 4.45% higher in pre-market trading Tuesday to indicate an opening bell price of $13.37 each.