Markets Head to New Lows; EBAY, BKNG Shares Down Post-Earnings

This story originally appeared on Zacks

With no economic data reporting today and most of the high-impact companies already past their quarterly earnings reports, it was going to be difficult for pre-market bulls to hand onto the gains they’d managed ahead of today’s opening bell. In this column, we called it a “dead-cat bounce,” but it’s not even that good: this “dead cat” got run over by a Russian tank.
For five straight trading sessions, both the Dow and Nasdaq have posted lower closes. In today’s case, the Dow dropped -464 points or -1.38%; the Nasdaq -344 points or -2.57%. Both indexes closed at their session lows, as did the S&P 500 and Russell 2000 — down -1.84% and -1.82%, respectively. Even more disappointingly, the Dow had been +235 points earlier today at its session high.
The Nasdaq is now nearly -20% from its all-time highs, having taken out the year-to-date intraday low from January 24th today. The S&P is -12% from its own all-time high, which occurred just a short six weeks ago. Ten of 11 sectors closed lower on the day, with only Energy — unsurprisingly, considering the industry’s relationship to Russia — moving higher. It’s a tough slog these days, no doubt; even with overall Q4 earnings season coming up roses, too many question marks on the horizon are causing portfolios to shed equity assets.
And it’s not like the crypto market is faring much better. Bitcoin — lauded by supporters as “digital gold” — is proving less of a hedge against inflation and global turmoil than many people had originally surmised. Much less, in fact. Its price has tumbled to a two-week low on the Russian invasion of Ukraine, with the leading crypto having lost nearly half its value from November highs.
eBay EBAY investors will be all too happy to see this trading day end: shares are down -11% following its fiscal Q1 earnings report, which gave softer guidance for next quarter after surprising to the upside on earnings ($1.05 per share versus 99 cents expected) and coming inline on sales ($2.61 billion). Tougher comps year over year were expected, and this company does not miss on the bottom line, ever. But the company has now given back its pandemic gains and is down -30% from its all-time highs.
Booking Holdings BKNG shares had gone up initially following its Q4 earnings report Wednesday afternoon, but have since sunk back into the red, as well. Earnings of $15.83 per share outpaced the $12.73 in the Zacks consensus (and exponentially ahead of the -57 cents per share posted in the year-ago quarter). Revenues of $2.98 billion topped expectations of $2.90 billion. Gross Travel Bookings grew 116% year over year, to $76.6 billion. Clearly a company on the opposite trajectory as eBay currently.
Weekly Jobless Claims and a revised Q4 GDP are on deck for Thursday morning, with New Home Sales out after the opening bell. But these days, such benchmarks pale in comparison to the specter of full-scale war in Eastern Europe. They don’t even stand up well against the idea that interest rates might be near mid-single digits by year’s end, depending on how nasty inflation remains. So buckle up and snap on the chinstrap; it’s going to be a rough-and-tumble near-term period.
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