U.S. equity futures slipped lower Friday as markets peeled away from another set of all-time highs last night following weaker-than-expected earnings from Apple (AAPL) - Get Free Report and Amazon (AMZN) - Get Free Report that signal supply chain chaos heading into the holiday season.
The tech giants' disappointing September quarter earnings, alongside softer-than-expected forecasts, look set to rip around $200 billion in value out of the market at the start of trading while raising deeper concerns for the fate of 'just-in-time' delivery for retailers and semiconductor suppliers for the broader tech sector into the final months of the year.
Investor sentiment is also starting to turn cautious amid the steady stream of corporate warnings on inflationary pressures and supply chain woes, with Bank of America noting the biggest move into cash by global fund managers this week since April 2020, and bond markets signaling their most bearish assessment on growth since the peak of the pandemic last year.
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On Wall Street, futures contracts tied to the Dow Jones Industrial Average are indicating a 35 point opening dip ahead following earnings from Chevron (CVX) - Get Free Report and Exxon (XOM) - Get Free Report, while those linked to the S&P 500 are priced for 22 point pullback following last night's record high close.
Futures tied to the tech-focused Nasdaq Composite are indicating a 130 point slide following the weaker-than-expected earnings from last night for Amazon and Apple.
Apple, in fact, is down 3.6% in pre-market after noting that upply chain woes ripped $6 billion from its September quarter sales amid the tech giant's first quarterly earnings miss in five years.
Apple's holiday quarter sales will also be hit by the chip shortage, although CFO Luca Maestri told investors on a conference call that December quarter sales would be "very solid", and likely hit a record high, with gross margins in the region of 41.5% to 42.5%.
Amazon shares, meanwhile, were marked 4.6% lower, erasing nearly all of their gains for the year, after the world's biggest online retailer forecast softer-than-expected holiday sales following a $2 billion hit from labor costs and supply chain disruptions to its third quarter earnings.
Amazon CFO Brian Olsavsky cautioned that costs linked to hiring, inflation and other "operational disruptions" could rise to as high as $4 billion over the December quarter, while forecast for revenues of between $130 billion and $140 billion.
On the upside, Chevron rose 2% after a surge in oil and gas prices from last year's pandemic lows lead to the group's strongest quarterly profits in eight years and prompted speculation of a dividend hike.
Oil prices edged modestly higher, but are still on track for their first weekly loss in two months, following a bigger-than-expected 4.3 million barrel increase in domestic crude stocks reported earlier this week and Iran's plan to return to talks aimed at limiting its nuclear program.
WTI futures contracts for December delivery were marked 20 cents lower on the session at $83.01 per barrel while Brent contracts for the same month fell 23 cents to $84.55 per barrel.