Tuesday’s Pre-Market: Here’s What You Need To Know Before The Market Opens

Following a record day for the market, U.S. stock futures were mixed in Tuesday’s pre-market trading session. Futures tied to the Dow Jones Industrial Average dropped by 168 points, or 0.5%. Meanwhile, S&P 500 futures fell 0.5% and Nasdaq 100 futures were up 0.1%.   

Shares of Tesla jumped 13.2% in after-hours trading on Monday after it revealed it will be included in the S&P 500 index. The electric vehicle maker will officially be added to the index prior to trading on December 21, with the inclusion putting it among the highest valued S&P 500-listed names. In reaction to the news, Wedbush analyst Daniel Ives commented, “Clearly this is a key positive for shares and indexing purposes and ultimately removes another question mark around the Tesla story going forward.” 

On the other hand, iQIYI shares plummeted by more than 7% in Monday’s extended trading session as subscribers for the Chinese video streaming platform dropped during the third quarter. The number of total subscribing members fell to 104.8 million as of September 30, from 105.8 million in the prior-year period. Recently, Tigress Financial analyst Aaron Ju downgraded the stock’s rating to Hold from Buy and removed his price target, explaining, “The high churn rate after the COVID-19 outbreak in China dragged down its total subscribers… Business Performance trends turn to flat due to the intense competition and a lack of near-term growth drivers.” 

Internet giant Baidu reported that Q3 adjusted earnings increased 61% year-over-year to $3.00 per American depository share (ADS), beating the $2.05 per ADS consensus estimate. Additionally, sales of $4.16 billion gained 1% from the prior-year quarter and surpassed the Street’s $4.14 billion call. “Our revenue growth turned positive in the third quarter with many advertising verticals turning around, putting Baidu in a good position to further benefit from a recovery in the Chinese economy… Our new AI businesses saw healthy growth in the third quarter, particularly from cloud, where we are differentiating with AI solutions,” CEO Robin Li stated. 

Meanwhile, SmileDirectClub shares slipped 4.5% in pre-market trading on Tuesday despite reporting a better-than-feared loss for the third quarter and exceeding revenue expectations. The teledentistry company’s loss per share narrowed to $0.11 in Q3 2020, versus a loss per share of $0.89 in the prior-year quarter. Revenue declined 6.5% year-over-year to $168.5 million, but this came in ahead of the $146.2 million consensus estimate. SDC guided for Q4 revenue of $180 million, which would reflect 7% sequential growth.  

On the coronavirus vaccine front, BioNTech and Shanghai partner Fosun Pharma have been granted regulatory approval to kick off the clinical trial for their mRNA-based COVID-19 vaccine candidate, BNT162b2, in China. In response, shares rose 2.7% in Tuesday’s pre-market trading session. BioNTech CEO Ugur Sahin said, “This start of the b2 trial in China, in conjunction with the recent interim analysis of the global Phase 3 trial that indicates that our lead candidate may be effective in protecting against COVID-19, is another important step forward… Time is of the essence in this effort and we greatly appreciate the support by Chinese regulators and the collaboration with our Chinese partner Fosun Pharma.” 

Pfizer announced it started a pilot delivery program for its COVID-19 vaccine candidate in four U.S. states, as the healthcare company is likely to face distribution issues due to the vaccine’s ultra-cold storage requirements, Reuters reported. Its experimental vaccine, which was shown to be more than 90% effective in preventing COVID-19 based on preliminary data, needs to be shipped and stored at -70 degrees Celsius (minus 94°F), which is significantly below the standard for vaccines of 2-8 degrees Celsius (36-46°F). “We are hopeful that results from this vaccine delivery pilot will serve as the model for other US states and international governments, as they prepare to implement effective COVID-19 vaccine programs,” Pfizer wrote in a statement obtained by Reuters.  

In dividend news, Costco shares ticked up in Monday’s after-hours trading after the company’s board approved a special cash dividend of $10 per share. The dividend will be paid on December 11 to shareholders on record as of December 2. Following the announcement, Oppenheimer analyst Rupesh Parikh reiterated his Buy rating and the price target of $400, commenting, “We continue to rank COST as our favorite holiday retail play. Even after this payout, more special dividends are likely on the horizon in coming years. We now expect the company’s ending cash balance at the end of FY22 (August 2022) to total more than $25 per share even after this upcoming distribution.”