The US Index Futures point to a slight increase and are still trying to extend yesterday’s gains, when optimism prevailed with the signs of progress in negotiations on raising the debt ceiling in the United States.
By 6:46 AM, Dow Jones futures were up 34 points, or 0.10%. S&P 500 futures were up 0.11%, while Nasdaq-100 futures were up 0.02%. The 10-year Treasury yield was at 3.65%. West Texas Intermediate crude rose 1.25% to settle at $72.82 a barrel.
The leaders of the seven most developed countries, the G-7, started their summit meeting today in the Japanese city of Hiroshima. The group of more industrialized democracies is expected to discuss strengthening sanctions against Russia and a safeguard against China’s “economic coercion”. Ukrainian President Volodymyr Zelensky, who was initially scheduled to participate via videoconference, will be on his way to attend the event in person and landed in Saudi Arabia today.
On the economic data front, traders will be eyeing Federal Reserve Chairman Jerome Powell at 11:00 AM. Before that, the president of the NY Fed unit, John Williams, and Michelle Bowman, who is a member of the US BC, will speak at 8:45 AM and 9:00 AM, respectively. Comments may update the market on the effect of recent data on the flight plan for US interest rates. At 1 PM, the Baker Hughes probe count will be announced.
In Germany, producer prices in the country showed relief for the seventh consecutive month, advancing on an annual basis by 4.1%, close to the 4% projected by consensus and after rising 6.7% in the previous month. The variation was the smallest in 25 months. But, month-on-month, the index rose 0.3%, above the consensus of a 0.5% decline.
In commodities, iron ore retreated 1.4% on the Chinese exchange in Dalian, at 736.00 yuan, or the equivalent of US$106.48 a ton, but ended the week with an increase of more than 5%. Amid signs of China’s uneven recovery, Premier Li Qiang said the government will promote more targeted measures to expand domestic demand and stabilize external demand in an effort to promote a more sustainable pace of economic improvement, according to comment quoted on state radio.
At the close of Thursday, US stock markets closed the day higher, even with high yields. The Dow rose 115.14 points, or 0.34%, to close at 33,535.91 points after trading lower for most of the trading session. The S&P 500 rose 0.94% to close at 4,198.05 points, its highest since August. The Nasdaq Composite rose 1.51% to close at 12,688.84 points. Yesterday, in addition to the US initial jobless claims data disappointing estimates (which means a warmer job market), there were more hawkish speeches among Fed members. In particular, President Lorie Logan of the Dallas Fed said it was not yet clear whether there would be a break in monetary tightening at the next meeting.
On the earnings front, traders are waiting earnings from Deere, Catalent, Foot Locker and RBC Bearings, among others.
Wall Street Corporate Highlights for Today
Disney (NYSE:DIS) – Disney has abandoned plans to open a new nearly $1 billion employee campus in Lake Nona, Florida that would have housed 2,000 employees, amid rising tensions with the state governor. The company will not proceed with construction and the California employees will not have to relocate. The dispute with the governor included a lawsuit. Disney will also close the Star Wars theme hotel in Orlando, less than two years after it opened, as part of the company’s cost cuts. The high price of stays was criticized by fans. On the company’s streaming side, Disney will begin removing some titles from its Disney+ and Hulu streaming services next week.
Berkshire Hathaway (NYSE:BRK.B), Occidental Petroleum (NYSE:OXY) – Berkshire Hathaway increased its stake in Occidental Petroleum, acquiring more shares in recent days, bringing its stake in the oil company to 24.4%. The company now owns approximately 217.3 million shares, worth approximately $12.7 billion. Berkshire also owns approximately $9.5 billion of Occidental preferred stock with an 8% annual dividend, as well as warrants to purchase $5 billion of Occidental common stock at $59.62 each.
Icahn Enterprises LP (NASDAQ:IEP) – Investor Carl Icahn admitted he was wrong in his bet that the stock market would crash, losing an estimated $1.8 billion in 2017 and an additional $7 billion between 2018 and the first quarter 2023. He acknowledged that he did not follow his investment parameters and highlighted the Federal Reserve’s influence on the market. Icahn also explained the use of margin lending and faced recent criticism related to corporate governance. Shares in his company, Icahn Enterprises LP, are down 32% year-to-date.
Meta Platforms (NASDAQ:META) – Meta has revealed its internal designs for silicon chips for artificial intelligence and video processing. Chips include Meta Scalable Video Processor and Meta Training and Inference Accelerator for AI tasks. The company also completed its Research SuperCluster supercomputer and remains committed to open source technologies.
Microsoft (NASDAQ:MSFT) – Twitter accused Microsoft of violating a data usage agreement, alleging ‘unauthorized’ use and sharing of data with government agencies without permission. Twitter requires an audit of Microsoft’s use of Twitter content.
Apple (NASDAQ:AAPL) – Apple has cut sales estimates for its mixed reality headsets by about two-thirds. The company initially expected to sell around 3 million units a year, but now estimates to sell around 900,000 units. Elsewhere, Apple has also restricted its employees’ use of external AI tools due to concerns about sensitive data being leaked, including ChatGPT and GitHub Copilot. OpenAI announced the ChatGPT app for iOS on Thursday.
Alibaba (NYSE:BABA) – Alibaba surprised to announce the spin-off of its cloud business, valued at more than $30 billion, raising speculation about political and market pressures. The company faces regulatory scrutiny, loss of market share and domestic shocks, leading to the decision to relinquish control. The measure seeks to simplify the structure and respond to market demands.
Pfizer (NYSE:PFE) – The US Food and Drug Administration’s (FDA) independent advisory panel recommended full approval of Pfizer’s respiratory syncytial virus vaccine in infants, but raised safety concerns regarding premature births. Most committee members considered the efficacy data adequate, but there was disagreement regarding the safety data. The FDA’s final decision will be made in August.
Teva Pharmaceutical (NYSE:TEVA) – Teva Pharmaceutical Industries plans to scale back its generic drug business and focus on innovative therapies. The company seeks to improve its profit margins by focusing on high-value products. The strategy includes a reduction in generic manufacturing and an increase in the development of branded non-generic drugs. Teva also intends to allocate resources to finance growth and reduce its debt.
Micron Technology (NASDAQ:MU) – Micron plans to invest up to 500 billion yen ($3.70 billion) in extreme ultraviolet (EUV) technology with support from the Japanese government. The company will be the first semiconductor company to bring EUV technology to production in Japan, aiming to increase production from 2025 onwards.
Nvidia (NASDAQ:NVDA) – Nvidia was up 0.3% to $317.71 in premarket trade. Shares in the graphics chip maker closed up nearly 5% on Thursday, boosted by the launch of new graphics cards featuring the company’s Ada Lovelace architecture. During the trading session, the shares rose to $318.28, close to the all-time close of $333.76 set in November 2021.
JPMorgan Chase (NYSE:JPM) – JPMorgan Chase is seeking records from the office of Manhattan District Attorney Alvin Bragg relating to prosecutions involving his ties to Jeffrey Epstein. The bank is facing lawsuits alleging that it knowingly benefited from Epstein’s crimes. Deutsche Bank has already agreed to settle a similar case. The lawsuits claim the bank had knowledge of Epstein’s crimes through former private bank head Jes Staley, who has denied the allegations.
Charles Schwab Corp (NYSE:SCHW) – Charles Schwab plans to raise up to $2.5 billion through a debt offering, taking advantage of rising yields. The company will raise the debt in two parts, through notes due in 2029 and 2034, and use it for its corporate needs. If held to maturity, the 2029 notes would yield 205 basis points more than the risk-free 5-year US Treasury bond, while the 2034 notes yield would be 227 bps higher than the 10-year US Treasury yield. years. The issuance comes after first-quarter earnings beat expectations and as investors hold out hope for a deal on the US debt ceiling.
Lazard Ltd (NYSE:LAZ) – Ken Jacobs, CEO of Lazard, is expected to step down and be replaced by Peter Orszag, after the company reported a loss in the first quarter. Lazard also plans to reduce its workforce by 10%.
General Motors (NYSE:GM) – General Motors estimates it will have the capacity to manufacture 1 million electric vehicles in North America by 2025, but the slow growth of its battery plants could limit actual production to less than 600,000. GM reiterates its targets, but analysts at AutoForecast express concerns about production hurdles and raw material assurance.
Tesla (NASDAQ:TSLA) – Tesla executives in India have discussed local component sourcing and incentives, but have not come up with formal plans to build vehicles in the country, according to sources. The automaker is looking to tap into the Indian market, but faces obstacles, including high tariffs on imported cars. Discussions continue as Tesla seeks to understand local policies and incentives before settling on a plan. In addition, Tesla is considering other Asian countries to open factories, including South Korea and Indonesia.
Volkswagen (USOTC:VWAPY) – Volkswagen sold its Russian business to Art-Finance, backed by Avilon dealership, becoming the latest Western company to leave the country after the invasion of Ukraine. The transaction included production facilities, warehousing and aftermarket business. Financial terms were not disclosed.
Ford Motor Co (NYSE:F) – Ford is recalling 422,000 SUVs in the US due to rearview camera issues. The recall covers Ford Explorer, Lincoln Aviator and Lincoln Corsair models from 2020 to 2023. The company is working to identify the cause and provide a resolution as quickly as possible.
BYD (USOTC:BYDDY) – BYD has cut prices on its hybrid and electric vehicles, following in Tesla’s footsteps. Despite this, the EV market in China remains strong, with significant increases in sales. The price-cutting strategy seeks to gain market share, even if it affects profit margins.
Exxon Mobil (NYSE:XOM) – Exxon Mobil Corp has rejected investors requiring the company to report climate and environmental risks. It states that achieving net zero emissions by 2050 is unlikely and should not be factored into its financial statements. The company also objected to reports about project abandonment costs and environmental impacts, according to Reuters.
Earnings
Applied Materials (NASDAQ:AMAT) – Applied Materials reported fiscal second-quarter earnings that beat Wall Street expectations, but the semiconductor manufacturing equipment maker’s outlook did not rouse investors and the stock fell 1.4% in trading premarket. Applied Materials said key consumer electronics markets, including PCs and smartphones, remained weak.
Farfetch (NYSE:FTCH) – Farfetch rose about 21.2% in premarket trade after the luxury fashion company posted a smaller-than-expected first-quarter loss and sales rose 8% to $556 .4 million, above analyst forecasts.
Ross Stores (NASDAQ:ROST) – First-quarter sales of $4.49 billion at Ross Stores increased year-over-year, but the retailer said same-store sales for the second quarter and fiscal year will be flat in relation to the periods of the previous year. Ross shares were flat premarket.
Deere (NYSE:DE) – Deere is scheduled to report fiscal second-quarter earnings before equity markets open for trading. The Wall Street analyst expects the heavy equipment maker to report earnings of $8.58 a share on equipment sales of $14.9 billion. Deere shares were up 6.6% in premarket trade.
Foot Locker (NYSE:FL) – Foot Locker is also expected to issue quarterly results prior to market opening. Foot Locker shares were down 0.5% ahead of its report.
Market view
Ubisoft Entertainment (EU:UBI) – Shares in Ubisoft Entertainment fell 4% to €23.55, making it the second-worst performer on the Stoxx Europe 600. UBS downgraded its recommendation to Sell from Buy and lowered its price target to €20 of €55, citing challenges in financial performance and the company’s catalog of future releases.