Stock markets are set to renew a selloff this morning as a grim forecast from Snapchat owner Snap (SNAP) gave investors another excuse to shed tech shares. The company warned of a macro environment that “deteriorated further and faster than we anticipated,” saying it was unlikely to meet its (already conservative) revenue and profit guidance for Q2. Nasdaq futures are feeling the most pressure, down nearly 2%, while contracts linked to the S&P and Dow Jones slipped 1.2% and 0.8%, respectively.
Commentary: “$SNAP down 52% YTD before this announcement,” tweeted Stephanie Link, Chief Investment Strategist at Hightower Advisors. “Now another 25%? Why Price/Sales valuations are impossible metrics.”
Remember, Snap only reported earnings a month ago, meaning that the economic landscape appears to have changed drastically over the last several weeks. The firm will also slow hiring and postpone some planned staff additions until next year, according to an internal memo, while evaluating the remainder of its 2022 budget to look for cost savings. The latest outlook additionally pummeled digital advertising stocks, including shares of Meta Platforms (FB), Pinterest (PINS) and The Trade Desk (TTD).
Next stop: “These are pretty binary markets at the moment,” explained Deutsche Bank’s Jim Reid. “If the US doesn’t fall into recession over the next 3-6 months then it’s easy to see markets rallying over this period. However if it does, the correction will likely have…
