US Index Futures had a flat open, with indexes hovering just below the flat line as the market focused on budget disputes in Washington.
By 6:40 AM, Dow Jones futures were down 21 points, or 0.06%. S&P 500 futures were down 0.02%, while Nasdaq-100 futures were down 0.02%. The 10-year Treasury yield was at 3.746%. West Texas Intermediate crude rose 0.60% to settle at $72.46 a barrel.
President Joe Biden and House Speaker Kevin McCarthy failed to reach an agreement on the debt limit on Monday, but found the discussions productive. After the meeting, McCarthy emphasized that Republicans would not agree to any tax changes as part of a debt deal. Negotiating teams will continue discussions, with the aim of avoiding a catastrophic US default.
On Tuesday’s economic data schedule, traders are looking forward to the US Redbook Index at 8:55 am, Dallas Fed President Lorie Logan’s speech at 9:00 am, the manufacturing and services PMI at 9:45 am, and sales of new properties in April, at 10:00 am.
At Monday’s close, the Dow fell 140.05 points, or 0.42%, to close at 33,286.58 points. The S&P 500 rose 0.02% to close at 4,192.63 points. The Nasdaq Composite rose 0.5% to close at 12,720.78 points, its highest close and highest intraday level since August. Yesterday, two FOMC members who spoke, showing more hawkish lines. James Bullard (St. Louis Fed) said he expects two more interest rate hikes this year, by 0.25 pp Neel Kashkari (Minneapolis Fed) reinforced that even if the Fed pauses the interest rate hike cycle in June, it won’t it means that he will not be able to go back up afterwards.
On the Tuesday earnings front, traders are looking at earnings from Lowe’s, Dick’s Sporting Goods, BJ’s, AutoZone and Williams Sonoma. After the market closes, reports from Palo Alto Networks, Intuit, VF Corp and Urban Outfitters will be awaited.
Wall Street Corporate Highlights for Today
PacWest Bancorp (NASDAQ:PACW) – PacWest Bancorp rose 11.5% in premarket trade, extending Monday’s sharp gains after the regional lender said it would sell a backlog of 74 home construction loans with a total balance of approximately $2.6 billion outstanding for Kennedy-Wilson Holdings (NYSE:KW).
Blackrock (NYSE:BLK) – The BlackRock Investment Institute is favoring private over public credit due to caution by traditional lenders due to the turmoil in the banking sector. Private credit offers attractive financing opportunities, filling the void left by banks pulling back on lending. The global loan volume has decreased by 37% this year.
JPMorgan Chase (NYSE:JPM) – The concern now is commercial real estate, according to Jamie Dimon, CEO of JPMorgan Chase. While US banks have faced low default rates, changing interest rates and the slow return to offices could affect this sector.
Goldman Sachs (NYSE:GS) – Record youth unemployment in China is a result of the mismatch between their skills and available jobs, Goldman Sachs said. Regulatory changes and a crackdown on sectors such as education and internet technology have weakened demand for labor in these areas, while manufacturing faces shortages of workers. The expansion of vocational training and the service sector are pointed out as potential solutions.
BNY Mellon (NYSE:BK) – BNY Mellon has expanded its offering of short-term investment products to meet the demand for higher yields. They now offer access to mutual funds, interest-bearing deposits and repurchase agreement scanning products through their LiquidityDirect platform, aimed at corporate treasurers looking for liquidity and risk mitigation.
First Citizens (NASDAQ:FCNCA), HSBC (NYSE:HSBC) – First Citizens is suing HSBC for more than $1 billion, alleging the theft of key bankers and confidential information from failed Silicon Valley Bank. Employees resigned en masse and former employees misappropriated data, according to the lawsuit.
Credit Suisse AG (NYSE:CS) – The Credit Suisse team plans to sue the Swiss financial regulator over the cancellation of $400 million in bonds. Law firms were contacted to take legal action on behalf of senior managers.
SoftBank (USOTC:SFTBY) – SoftBank Investment Advisers is considering launching a private lending strategy to provide structured finance for late-stage technology startups. The fund seeks to provide liquidity options in a slow and weak funding environment for IPOs. SoftBank is exploring opportunities in the private lending market for pre-IPO companies.
Mizuho Financial Group Inc (NYSE:MFG) – Mizuho Financial Group has agreed to acquire merger and acquisition advisory firm Greenhill & Co for $550 million, seeking to expand its presence in the investment banking industry. Greenhill shares rallied after the announcement, recouping earlier losses. The business will be integrated into Mizuho’s banking division.
Yelp (YELP) – The shares of Yelp Inc. are on the rise after reports that the company is being pressured by an activist investor to consider strategic options, including a potential sale. The increase in shares reflects the expectation that the company can realize significantly higher value. Earlier this month, Yelp reported a 13% increase in net income for the first quarter, which CEO Jeremy Stoppelman attributed to strong demand from advertisers.
Oracle (NYSE:ORCL) – In an effort to address national security concerns, TikTok plans to grant Oracle complete access to its source code, algorithm, and content moderation material. Oracle will also monitor the application’s US data gateways. These measures are part of TikTok’s Project Texas, which aims to isolate US users’ data and allow for security checks. The company is working closely with the US government to find a solution. However, reports suggest that Oracle is not yet fully overhauling TikTok’s software. Elsewhere, Oracle co-founder and Republican megabillionaire Larry Ellison plans to spend millions of dollars supporting Senator Tim Scott’s candidacy for president. Ellison donated $30 million to a pro-Scott super PAC in 2022 and will likely double his donations this time around. Elon Musk reportedly can also support Scott.
Paramount Global (NASDAQ:PARA) – The Paramount+ streaming service will be combined with the Showtime app in the US on June 27, resulting in a price increase. The Showtime cable network will also be rebranded as Paramount+ with Showtime, and the company will shut down the standalone Showtime app. These actions are aimed at reducing content spending and making streaming more profitable. Other media companies such as Warner Bros. Discovery and Disney are also looking to cut costs and streamline their streaming platforms.
Tegna (NYSE:TGNA) – Television station operator Tegna has terminated its merger agreement with hedge fund Standard General due to regulatory hurdles. The deal, valued at $8.6 billion, has faced criticism and the Federal Communications Commission has held a hearing on the offer. Tegna will receive $136 million in termination fees and has announced a $300 million share buyback program.
Icahn Enterprises LP (NASDAQ:IEP) – Carl Icahn has lost $15 billion and faces criticism after being the target of a report accusing him of mismanagement and poor performance. Despite this, Icahn, at age 87, is still active and faces new challenges, such as his proxy fight with the company Illumina Inc (NASDAQ:ILMN). His Miami mansion serves as a haven as he plans his defense against attacks. Even in the face of these difficulties, Icahn remains a feared and unpredictable figure on Wall Street.
Walmart (NYSE:WMT) – Walmart has partnered with veterinary telehealth startup Pawp to offer Walmart+ subscribers access to Pawp membership for one year. The offer will be available for a limited time, and Walmart is looking to increase its share of the pet health care market and compete with Amazon (NASDAQ:AMZN).
Walgreens (NASDAQ:WBA) – Walgreens Boots Alliance Inc and consumers reach preliminary settlement in case related to Theranos. The pharmaceutical company faces allegations of ignoring fraud by the blood testing startup. The deal is awaiting court approval, while Elizabeth Holmes and Ramesh Balwani have already been convicted of fraud.
Pfizer (NYSE:PFE) – Pfizer’s weight loss pill, danuglipron, demonstrated results similar to Novo Nordisk‘s Ozempic injection (NYSE:NVO), according to a peer-reviewed study of phase 2 clinical trial results released on Monday. Patients taking danuglipron lost about 10 pounds on average in 16 weeks.
Volvo Group (USOTC:VLVOF) – Volvo Group has acquired wind power producer Vattenfall AB in a 10-year deal. The Swedish vehicle manufacturer aims to electrify processes and phase out fossil fuels in the transport sector, aiming to reach zero emissions by 2040.
Apple (NASDAQ:AAPL) – Apple is gearing up to launch its mixed reality headset at the WWDC conference on June 5th. With an installed base of more than 1.1 billion iPhone users and its reputation for transforming technology categories, the company hopes to succeed where others have failed. Expected price is $3,000.
Microsoft (NASDAQ:MSFT) – Microsoft Chief Marketing Officer Christopher Capossela has sold more than $7.5 million worth of company stock so far this month. Capossela recently sold 5,000 MSFT shares at an average price of $316.87. He currently owns 89,327 shares of Microsoft stock.
Meta Platforms (NASDAQ:META) – WhatsApp by Meta has finally launched the message editing feature, allowing users to modify their sent messages within 15 minutes. The feature will roll out globally in the coming weeks, offering more flexibility to users, in line with other competing platforms.
Tesla (NASDAQ:TSLA) – Tesla has begun listing Model 3 and Model Y models made in China for sale in Canada, marking its first shipments to North America from the Shanghai factory. The company is looking to take advantage of tax breaks in Canada and expand its international market while facing increasing competition in China. Tesla shares were down 0.6% in premarket trade. Shares in the electric vehicle company rose 4.9% on Monday, the stock’s fifth straight gain. Tesla gained 14% over the five days.
Ford (NYSE:F) – Ford doesn’t fear Tesla and BYD in the EV market. Its CEO, Jim Farley, stated that its models will be aimed at segments in which these companies do not operate. Ford seeks to avoid price competition and is developing a unique electric SUV. GM will also launch an electric SUV, but Farley doesn’t see direct competition.
Toyota (NYSE:TM) – Shares of Toyota fell 4.8% in the Japanese market, resulting in a loss of $11 billion in its market value. Restrictions on chip technology exports and a conservative profit forecast also weighed on the talks as CEO Koji Sato looks to rapidly expand production of electric vehicles.
Uber (NYSE:UBER) – Uber executive suspended after controversial event. Bo Young Lee, the company’s head of diversity, was let go due to negative reactions to a discussion titled “Don’t call me Karen”. Employees felt their concerns were not heard, leading to the executive’s suspension and later praise for CEO Dara Khosrowshahi for quick action.
Goodyear Tire & Rubber Co (NASDAQ:GT) – US labor authorities have asked Mexico to investigate alleged abuses of workers’ rights at Goodyear’s plant in the country. This is the latest investigation under the trade rules of the USMCA agreement. Mexican independent union La Liga petitioned, citing disparity in benefits. Goodyear claims to treat workers fairly.
Apollo Global Management Inc (NYSE:APO) – Marc Rowan of Apollo Global Management faces scrutiny as the company’s pioneering entry into the insurance industry is tested. Apollo’s strategy, through insurer Athene Holding, to invest in structured credit is under review as regulators consider raising capital requirements for structured assets. Apollo defends its approach, arguing that expertise in structured credit allows for higher yields with lower risk. Athene’s performance is crucial for Apollo, which seeks to reach $1 trillion in assets by 2026.
Chevron (NYSE:CVX) – Chevron is acquiring shale producer PDC Energy (PDCE) in a $7.6 billion transaction, increasing its presence in the US oil and gas industry. The deal aims to boost Chevron’s production and cash flow, while meeting President Joe Biden’s demands for greater domestic energy production. The transaction is expected to close by the end of the year.
Shell (NYSE:SHEL) – Climate-focused investors are seeking to lobby Shell at its annual general meeting, urging the company to align its climate targets with the Paris Agreement and set out absolute cuts in carbon emissions by 2030. is approved, investors seek to influence the company.
Applied Materials (NASDAQ:AMAT) – Semiconductor tool maker Applied Materials plans to invest up to $4 billion in a research facility in Silicon Valley. The facility, called EPIC, will host $25 billion in research work and will bring together teams from universities and chip makers. The center will be operational in 2026 and will create up to 2,000 jobs.
Nvidia (NASDAQ:NVDA) – Nvidia collaborated with the University of Bristol to build a supercomputer based on its new Grace CPU chip, competing with Intel and AMD. The Isambard 3 system offers six times the performance and greater energy efficiency of its predecessor and is used in scientific research.
Intel (NASDAQ:INTC) – Intel has revealed details about its upcoming artificial intelligence chip, “Falcon Shores,” which will have 288GB of memory and support 8-bit floating-point computing. The company is looking to compete with Nvidia and AMD as it shifts its strategy and tries to regain market share in AI chips. The launch is scheduled for 2025.
Micron Technology (NASDAQ:MU) – Micron Technology forecast a low single-digit to high-single-digit revenue hit due to China’s ban on selling its memory chips to domestic industries. While the direct impact is limited, the move raises concerns about political risk and could prompt some companies to look for alternatives.
Heineken (USOTC:HEINY) – Heineken is investing $100 million to promote its new light beer in the US to boost its business. Heineken Silver seeks to take advantage of changes in the light beer market, facing fierce competition. The company plans to attract younger consumers with free samples and sponsorships at sporting events.
Disney (NYSE:DIS) – The Walt Disney Co. rejected the idea of building mini-parks in the US, prioritizing its main theme parks and cruise ships. The head of Disney’s parks said they should focus on their core assets and ruled out plans to expand into smaller parks.
Earnings
Zoom Video (NASDAQ:ZM) – Zoom raised its full-year revenue and profit forecasts despite slower growth. Stocks rose initially, but held back on gains. Competition from companies like Microsoft, Cisco and Salesforce is increasing. First-quarter revenue beat estimates, but growth was the slowest on record. On an adjusted basis, the company earned $1.16 per share for the first quarter, above estimates of $0.99, according to Refinitiv IBES. Stocks are stable in premarket trading.
Lowe’s (NYSE:LOW) – Lowe’s reported adjusted earnings of $3.67 per share for the first quarter, beating analyst estimates of $3.45, but the stock was down 1.1% in premarket trade after the home improvement retailer cut its profit and sales outlook for the fiscal year.
Heico (NYSE:HEI) – Heico reported fiscal second-quarter profit that beat estimates as sales for the period jumped 28% to $687.8 million and also beat expectations.
Nordson Corporation (NASDAQ:NDSN) – Nordson said fiscal second-quarter sales beat analysts’ estimates and said fourth-quarter sales were likely to be “the strongest of the year.”