Nasdaq 100, Dow Jones, S&P 500: Coca-Cola’s Strong Earnings Overshadowed by Tech Earnings Worries

Highlights

• Stock futures drop as investors await tech, economic data
• Coca-Cola Beats Earnings Expectations
• Bed Bath & Beyond declares bankruptcy

Overview

Investors are anticipating a wave of earnings reports from major tech companies this week. Fresh economic data is also due for release. This is putting early pressure on stock index futures shortly before the cash market opening.

At 11:19 GMT, the blue chip Dow Jones Industrial Average futures contract dropped by 0.3%, equivalent to 89 points. Meanwhile, the benchmark S&P 500 and tech-heavy Nasdaq-100 futures both fell by 0.3% and 0.4%, respectively.

Earnings Results Weighs on Markets

Last week, all major indexes experienced a decline as the earnings season began to heat up. Additonally, the Dow ended its four-week winning streak with a 0.23% decrease.

Although 76% of S&P 500 firms exceeded analyst earnings estimates, Refinitiv predicted a 5.2% decrease in overall first-quarter earnings for S&P 500 firms.

Investors Anticipate Tech Earnings, Economic Data

Investors are looking forward to the upcoming tech earnings results, with Alphabet, Microsoft, Amazon, and Meta among the high-interest names scheduled to release their first-quarter results.

Additionally, investors are keeping an eye out for new economic data to provide insight into whether inflation is cooling or if the Federal Reserve will announce another rate hike in May. Some traders believe that economic reports over the next seven to ten days will be the major driver of what the Fed will do. Finally, the Dallas Fed’s Manufacturing survey results will be scrutinized by traders to evaluate the state of the state’s factory activity.

Coca-Cola Exceeds Q1 Expectations

Coca-Cola’s quarterly earnings and revenue exceeded analysts’ expectations on Monday due to higher demand for its drinks and price hikes, resulting in a 1% increase in premarket trading.

According to a Refinitiv survey of analysts, the company’s earnings per share were 68 cents adjusted. This compared to an expected 64 cents, and revenue was $10.96 billion adjusted, compared to $10.8 billion expected.

Coca-Cola’s net income attributable to shareholders for the first quarter was $3.11 billion, or 72 cents per share, up from $2.78 billion, or 64 cents per share, a year earlier.

Excluding items, the beverage giant earned 68 cents per share. Net sales rose 5% to $10.98 billion, with organic revenue increasing by 12% in the quarter. The company maintained its previous 2023 forecast of 3% to 5% comparable revenue growth and 4% to 5% comparable earnings per share growth.

Bed Bath & Beyond Files Bankruptcy

On Sunday, Bed Bath & Beyond filed for Chapter 11 bankruptcy protection after failing to raise enough money to stay afloat. The company has 360 stores and 120 Buybuy Baby locations. Both will remain open for the time being, but it has filed motions to auction the two brands.

Bed Bath & Beyond has been struggling for some time and has experienced dwindling sales, low inventory levels, and difficulty maintaining relationships with vendors.

The company reported $2.05 billion in revenue for the fiscal fourth quarter of 2021. Bed Bath & Beyond owes $5.2 billion in debts, with BNY Mellon owed the most at $1.18 billion. Sixth Street will lend Bed Bath & Beyond $240 million in debtor-in-possession financing.

For a look at all of today’s economic events, check out our economic calendar.