Here are five things you must know for Wednesday, October 20:
1. -- Stocks Futures Cautiously Higher As Earnings, Inflation Fight For Attention
U.S. equity futures edged cautiously higher Wednesday, taking the S&P 500 within touching distance of its September closing high, as solid corporate earnings offset persistent inflation concerns and a jump in Treasury bond yields.
Surging energy prices, supply chain disruptions and labor shortages are adding cost and margin pressures to a host of companies this earnings season, with consumer brands giants Procter & Gamble PG and Nestle planning price increases that will likely keep inflation ticking higher over the coming months.
Bank of America's closely-tracked survey of fund managers, in fact, noted this month that Inflation remains the market's key 'tail risk', followed by weakness in China and a renewed surge in COVID infections over the winter.
Still, with collective S&P 500 profits set to rise 32% from last year to $421.4 billion -- and big name tech groups such as Apple (AAPL) - Get Apple Inc. (AAPL) Report, Facebook (FB) - Get Facebook, Inc. Class A Report, Microsoft (MSFT) - Get Microsoft Corporation (MSFT) Report and Amazon (AMZN) - Get Amazon.com, Inc. Report yet to report -- stocks have been able, for the moment at least, to shrug-off inflation concerns and the likely reaction to them by the Federal Reserve.
Wednesday trading could buck that trend, however, and with Tesla (TSLA) - Get Tesla Inc Report reporting after the closing bell, and 10-year Treasury note yields rising to 1.641%, futures contracts tied to the Dow Jones Industrial Average are indicating just a 10 point opening bell gain.
Futures contracts tied to the S&P 500, meanwhile, are set open little changed from last night's 4,519.63 point close while those linked to the Nasdaq Composite are indicating a 5 point move to the upside at the start of trading.
2. -- Netflix Rides Squid Game to Q3 Earnings Beat, Record Subscriber Total
Netflix (NFLX) - Get Netflix, Inc. (NFLX) Report shares moved lower in pre-market trading after the streaming entertainment service blasted Wall Street forecasts for its third quarter earnings and and subscriber growth thanks in part to hit shows such as Squid Game and Bridgerton.
Netflix said earnings for the September quarter rose 83.3% from last year to $3.19 per share, while revenues jumped 16% to 7.5 billion. Around 4.4 million people signed on to Netflix over the quarter, the company said, taking its overall total to a record high 213.6 million.
Netflix said 142 million households have watched Squid Game, the violent Korean-made dystopian drama series, a "mind boggling" total that the group says will spark subscriber growth of around 8.5 million -- topping Street forecasts -- over the final months of the year.
Netflix shares, which have gained around 22% so far this year, were marked 1.7% lower in pre-market trading to indicate an opening bell price of $628.32 each.
3. -- Facebook Reportedly Mulling Name Change As Zuckerberg Looks to 'Metaverse'
Facebook founder and CEO Mark Zuckerberg was famously told to drop "the" from his upstart social media company's name by an early investor. Now he might be dropping the name 'Facebook' altogether.
The Verge is reporting that Facebook is set to announce a rebranding that could see the creation of a newly-named parent company -- in the sprit of Alphabet and Google -- that sits atop its network of social media and communications apps.
The rebranding, which The Verge said could be made public later this month, comes amid both the most intense public scrutiny in the group's history and Zuckerberg's own ambitions of creating a 'metaverse', a virtual reality-based community that he has called "the ultimate expression of social technology.”
Facebook shares were marked 0.6% higher in pre-market trading to indicate an opening bell price of $341.98 each.
4. -- Tesla Earnings In Focus Amid Chip Shortage, China Concern
Tesla shares edged lower in pre-market trading ahead of the group's third quarter earnings later today, with investors focused on the clean-energy carmaker's plans to defy both a slowdown in China and the ongoing shortage in semiconductors over the final three months of the year.
Record third quarter deliveries of 241,300 units, which the group reported earlier this month, have likely set up Tesla for record September quarter profits, with Wedbush's Dan Ives looking for an 'across the board beat' of the Street consensus forecast of profits of $1.54 per share and revenues of $13.7 billion.
"We believe China demand rebounded in the quarter and is clear indicator of the step up in EV demand taking place globally with China leading the way," Ives said. "While there are many competitors in the EV space, Tesla continues to dominate market share as evidenced again this quarter while battling through the chip shortage and now is seeing rebounding China demand after facing headwinds earlier this year."
Tesla shares were marked 0.55% lower in pre-market trading to indicate an opening bell price of $860.55 each.
5. -- Germany's Inflation Hawk Weidmann Calls It Quits
Jens Weidmann, the longtime head of Germany's powerful central bank and one of Europe's most influential inflation hawks, announced his resignation Wednesday, sending shockwaves through the region's financial and economic class.
Weidmann, who has lead the Bundesbank for a decade, has been both a vocal critic of the European Central Bank's low-rate policies and a staunch advocate of his country's role at the heart of the single currency. In fact, he not only opposed the ECB's pans to begin buying bonds on the open market in an effort to keep interest rates low in 2013, he also appeared as a witness for the German state in a Federal Constitutional Court case that opposed QE on the grounds that it violated European treaties.
"I have come to the conclusion that more than 10 years is a good measure of time to turn over a new leaf – for the Bundesbank, but also for me personally," Weidmann told his staff in a letter Wednesday. He'll step down at the end of the year.