Nasdaq Composite futures are red heading into Friday’s open, following a disappointing earnings report from Snap Inc SNAP. The Dow Industrial Average and the S&P 500 futures are also red, but pretty flat.
Ad Space Woes: Snap reported a slowdown in advertising sales, and also cited Apple Inc.’s AAPL new iPhone privacy rules and increased competition from apps such as Instagram and TikTok. The decrease in ad sales brought other names in the online advertising space, Meta Platforms Inc META and Alphabet Inc GOOGGOOGL down after hours yesterday as well.
Fire Sale: The price of oil continues to drop, with WTI crude oil prices slipping below $95 a barrel. The weakness in oil is being seen in oil and gas stocks with the Energy Select Sector SPDR ETF XLE down almost a full percent premarket.
If today does end up being a let-down for bullish investors, it will come after a very strong week for stocks. The Nasdaq Composite is up nearly 6% throughout the last five trading days, while the S&P is up more than 4% and the Dow up 3%.
Clearly, the strength has been in tech throughout this bear-market rally, led by names like Netflix Inc NFLX and Tesla Inc TSLA.
Not So Fast: While many investors are thrilled to see green on the screen, some professionals believe that the bear market is not over yet. Sharon Bell, a senior European equity analyst at Goldman Sachs, told CNBC yesterday that the bank sees stocks coming down further as it hasn't seen earnings estimates start to come down yet. The bank has seen the valuation multiples get crushed already, but not the earnings crush yet that is often associated with a bear market.
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