STOCK MARKET NEWS: Lyft shares plunge, Buffett cuts BYD stake, oil gains

U.S. equity futures were trading lower after Wall Street retreated for a second day.

The major futures indexes suggested a decline of 0.3% when trading begins.

Oil prices moved higher Friday morning, adding to a weekly gain.

U.S. West Texas Intermediate (WTI) crude futures traded around $79.00 a barrel.

Brent crude futures traded around $86.00 a barrel.

On the economic docket, the University of Michigan will release its preliminary index of consumer sentiment for February on Friday morning.

It’s expected to inch higher to 65.0 after climbing more than expected to 64.9 in January on easing inflation expectations. 

Lyft shares are plunging 31% in premarket trading after the company forecast current-quarter revenue below Wall Street estimates, blaming extremely cold weather in some of its major markets and lower prices, especially during peak hours.

In Asia, Japan’s benchmark Nikkei 225 added 0.3%, Hong Kong’s Hang Seng shed 2.0% and China’s Shanghai Composite was down 0.3%.

On Thursday, the S&P 500 fell 0.9% while the Dow industrials lost 0.7%. The Nasdaq composite sank 1%.

Lyft shares are plunging 33% in premarket trading after the company forecast current-quarter revenue below Wall Street estimates, blaming extremely cold weather in some of its major markets and lower prices, especially during peak hours.

Lyft forecast first-quarter revenue of about $975 million, which fell below analyst estimates of $1.09 billion, according to Refinitiv data.

Its forecast for first-quarter adjusted earnings before interest, taxes depreciation and amortization (EBITDA), a key measure of profitability that strips out some costs, was between $5 million and $15 million.

For the fourth quarter, Lyft reported an adjusted EBITDA of $126.7 million, excluding $375 million it had set aside for increasing insurance reserves. Analysts had forecast $91.01 million.

Active riders rose 8.7% increase to 20.36 million for the fourth quarter, Lyft said. Analysts were expecting 20.30 million, according to FactSet estimates.

Rideshare was “really back … we’re happy with the current marketplace conditions,” Zimmer said.

Revenue rose 21% to $1.18 billion, slightly above the average estimate of $1.16 billion.

Posted by Reuters

The University of Michigan will release its preliminary index of consumer sentiment for February on Friday morning.

It’s expected to inch higher to 65.0 after climbing more than expected to 64.9 in January on easing inflation expectations. 

Consumer sentiment tumbled to an all-time low of 50.0 in June when
record-high gasoline prices had consumers panicked about inflation. 

With prices still elevated and the Fed sticking to its higher-for-longer messaging, markets will pay close attention to inflation expectations. 

Berkshire Hathaway has sold nearly 95 million of its original 225 million shares, according to a filing with the Hong Kong stock market on Thursday.

This follows the addition of 4.235 million BYD shares sold since last month.

Warren Buffett’s company has been trimming its stake since August, reducing its holdings by more than a third.

Yahoo said on Thursday it plans to lay off more than 20% of its total workforce as part of a major restructuring of its ad tech division.

The cuts will impact nearly 50% of Yahoo’s ad tech employees by the end of this year, including nearly 1,000 employees this week, the company said.

Yahoo, which is owned by private equity firm Apollo Global Management since a $5 billion buyout in 2021, added that the move would enable the company to narrow its focus and investment on its flagship ad business called DSP, or demand-side platform.

This comes as many advertisers have pared back their marketing budgets in response to record-high inflation rates and continued uncertainty about a recession.

A raft of U.S. companies from Goldman Sachs Group Inc to Alphabet Inc have also laid off thousands this year to ride out a demand downturn wrought by high inflation and rising interest rates.

Axios first reported the news of the layoffs at Yahoo.

Posted by Reuters

The price of gasoline continued to tick lower on Friday.

The nationwide price for a gallon of gasoline
 declined to $3.431, according to AAA.

The average price of a gallon of gasoline on Thursday was $3.437.

A year ago, the price for a gallon of regular gasoline was $3.477.

One week ago, a gallon of gasoline cost $3.491.  A month ago, that same gallon of gasoline cost $3.270.

Gas hit an all-time high of $5.016 on June 14.

Diesel remains below $5.00 per gallon at $4.581, but that is still far from the $3.867 of a year ago.

PayPal Holdings reported full-year profit forecast above Wall Street estimates on Thursday, as the payment firm’s customers undeterred by decades-high inflation continue to spend, and said Chief Executive Dan Schulman will retire at the end of the year.

Shares in the payments heavyweight slipped less than 1% in premarket trading.

PayPal said it expects full-year adjusted profit of roughly $4.87 on a per share basis. Analysts on average had expected $4.75 per share, according to Refinitiv IBES data.

The company’s upbeat forecast also comes alongside its previously announced commitment of lowering expenses in the backdrop of its key e-commerce segment feeling the pinch of a slowdown.

Last week, PayPal said it will lay off 7% of its workforce, or about 2,000 employees, joining a string of fintech firms which have slashed jobs to cut costs in an increasingly tumultuous operating environment.

Its revenue rose 9% on an FX-neutral basis to $7.4 billion in the fourth quarter ended Dec. 31.PayPal earned a profit of $1.24 per share on an adjusted basis in the quarter, versus $1.11 per share in the year-ago quarter.

Posted by Reuters

Oil prices moved higher Friday morning, adding to a weekly gain.

Markets are continuing to seesaw between fears of a recession hitting the United States and hopes for strong fuel demand recovery in China.

U.S. West Texas Intermediate (WTI) crude futures traded around $79.00 a barrel.

Brent crude futures traded around $84.00 a barrel.

The downturn was partly due to a report on Thursday showing The number of Americans claiming unemployment benefits increased more than expected last week, reigniting recession fears.

The latest U.S. oil inventory data this week also raised fears about a slowdown in the world’s biggest economy, with crude inventories climbing to their highest since June 2021.

Brent and WTI have jumped more than 5% so far this week, reversing most of the previous week’s losses, according to Reuters.