Before the Bell: Q4 GDP, Tesla Earnings and Forecast, Chevron's Buyback, Shopify's Price Hike

Premarket action on Thursday had the three major U.S. indexes trading mixed. The Dow Jones industrials traded down 0.07%, while the S&P 500 was up 0.16% and the Nasdaq 0.54% higher.

Six of 11 market sectors closed higher on Wednesday, with financials (0.74%) and consumer cyclicals (0.54%) leading the way. Utilities (−1.36%) and industrials (−0.53%) had the day’s largest losses. The Dow closed up 0.03%, the S&P 500 down 0.02% and the Nasdaq down 0.18%. The comeback from a sorry start was driven by investors who bid shares up after the S&P 500 slipped below its 200-day moving average.

Tuesday’s trading volume was below the five-day average. New York Stock Exchange winners led losers by 1,655 to 1,400, while Nasdaq advancers led decliners by a margin of about 6 to 5.

Among S&P 500 stocks, electronic bond-trading platform MarketAxess Holdings Inc. (NASDAQ: MKTX) added 10.25% on a strong earnings report, while NextEra Energy Inc. (NYSE: NEE) dropped 8.71% after the country’s largest wind and solar generator posted a lackluster report, and the head of its Florida Power & Light division reportedly violated state and federal political campaign laws.

Before U.S. markets open Thursday morning, the U.S. Department of Commerce will release its advance report on fourth-quarter gross domestic product. Economists are looking for an inflation-adjusted growth rate of 2.8%, below the final revised rate of 3.2% growth in the third quarter. Retail and home sales flagged in the fourth quarter, and when combined with a slowdown in employment growth, the forecast is dim. The weekly report on claims for unemployment benefits is expected to rise from the prior week’s level of 190,000 to 205,000. The good news is that slowing job growth helps keep inflation in check. The GDP report could tip the Federal Reserve either to raise rates as it has been, reduce the rate of increase or hold off on making any increase at next week’s FOMC meeting.

Tesla Inc. (NASDAQ: TSLA) reported fourth-quarter earnings after markets closed on Wednesday. The company posted revenue of $24.32 billion (up 37% year over year) and gross profit of $5.78 billion (up 19%). Adjusted net profit rose 43% to $4.11 billion. Full-year revenue rose 51% to $71.46 billion, and gross profit rose 53% to $20.85 billion. Adjusted net income for the year rose 85% to $14.12 billion. For the quarter, adjusted earnings per share (EPS) came in at $1.19, above the consensus estimate, and full-year EPS rose 80% to $4.07.

Tesla produced 1.37 million vehicles in 2022 and delivered 1.31 million. In its outlook statement, the company said it plans to increase production “as quickly as possible” to a compound annual growth rate of 50%. Tesla expects to build 1.8 million vehicles this year, and CEO Elon Musk said production could hit 2 million. The long-awaited Cybertruck is expected to go into production at Tesla’s Texas plant later this year. All the good news had shares trading up by around 7% in Thursday’s premarket session.

International Business Machines Corp. (NYSE: IBM) missed the consensus fourth-quarter EPS estimate, and revenue came in about 1.8% above consensus. Year over year, revenue came in flat and EPS were up 7.5%. The company said it would cut about 3,900 jobs, around 1.4% of its current workforce of 280,000. Shares traded down more than 2% in Thursday’s premarket.

A $7.5 billion stock buyback at Chevron Corp. (NYSE: CVX) sent shares up by almost 3% ahead of Friday morning’s earnings release. The March dividend payment was increased by 6.3% to $1.51 per share. The stock traded up about 3% early Thursday.

E-commerce platform Shopify Inc. (NYSE: SHOP) announced a 33% price hike for sellers who use its services. Shopify’s chief operating officer said it is the first price hike in 12 years. The company fired 10% of its workforce (about 1,000 people) last summer. That move has boosted the share price by about 29% since July, but the stock still trades down 47% over the past 12 months. Shares rose nearly 11% on Wednesday and traded up another 2.2% in Thursday’s premarket.

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