US Index Futures open the week with no clear direction close to flat after a rally last week gave the S&P 500 its best weekly performance since March.
At around 7:20 AM, Dow Jones (DOWI:DJI) futures were up 29 points, or 0.09%. S&P 500 futures were up 0.07%, while Nasdaq-100 futures were down 0.10%. The yield on the 10-year Treasury bond was at 3.747%. West Texas Intermediate crude was up 1.97% to settle at $73.15 a barrel.
The 2% jump in oil on Monday boosted shares of oil companies, after Saudi Arabia announced yesterday that it will implement a voluntary cut of 1 million barrels per day in its production from July.
With the aim of supporting oil prices, Saudi Energy Minister Prince Abdulaziz bin Salman Al-Saud committed to reducing the country’s production from around 10 million to 9 million barrels per day, which represents the biggest cut in many years. The commitment was sealed at a meeting of the Organization of Petroleum Exporting Countries and allies, OPEC+. The group, which accounts for about 40% of the global oil supply, also agreed to extend the current production targets of its members to 2024, compared to the previous deadline, which was until the end of this year. By 7:20 am, Brent crude for July was up 1.83% to $77.52 a barrel.
The advance of the commodity brings a new component to the prospective inflation scenario at a time when the market has been expanding its bet on a pause in the cycle of monetary tightening in the United States. Iron ore rose on the stock exchange in Dalian, China, in anticipation of the announcement of a real estate stimulus package in Asia’s largest economy.
On Saturday, US President Joe Biden signed into law the agreement that lifts the US debt ceiling, preventing the US from running out of resources to honor its financial obligations as of today, which could have a global economic impact.
On Monday’s Economic Indicators schedule at 9:45 am, investors are awaiting the United States Composite and Services PMI. At 10:00 am, the ISM Services PMI and US Factory Orders will be released.
By Friday’s close, US stock indexes rose, with continued momentum from the technology sector. The Dow Jones jumped 701.19 points, or 2.12%, to close at 33,762.76 points. The S&P 500 was up 1.45% to close at 4,282.37. The Nasdaq Composite gained 1.07% to 13,240.77 points. Payroll’s US employment report showed higher-than-expected job creation, but that wasn’t enough to stop stock market gains. A consensus was building that interest rates will not rise at the next FOMC meeting, something that seems to have been a result of comments from some of the Fed members last week who said that this decision will be taken at the next meeting. Looking at market estimates by the CME Group, there is a 70% chance of maintenance at the June 14th meeting, but still with a majority chance (68%) of a resumption at the next meeting, on July 26th.
On the quarterly results front for the week, gains will include results from Gitlab on Monday, Ciena and JM Smucker on Tuesday and Brown-Forman, Campbell Soup and GameStop on Wednesday. DocuSign and Vail Resorts report on Thursday, and NIO will report on Friday.
Wall Street Corporate Highlights for Today
Tesla (NASDAQ:TSLA) – Tesla delivered 77,695 Chinese-made electric vehicles in May, up 2.4% from April. Annual sales were up 142% from May 2022. Chinese rival BYD (USOTC:BYDDY) reported sales of 239,092 vehicles in May, up 14% year-on-year.
Twitter – According to Fidelity, Twitter is now worth about a third of what Elon Musk paid for it last year. Fidelity’s valuation estimates the company is worth just $6.6 million, compared to $19.7 million last October. Musk acknowledged that he overpaid for Twitter, but believes in its potential.
Volvo AB (USOTC:VLVLY) – Swedish automaker Volvo Cars reported a 31% increase in sales in May, selling 60,398 cars. After the challenges of 2022, the company has recovered and seen a consistent increase in sales in recent months. However, high costs remain a concern, leading to job cuts and the postponement of production of an all-electric SUV to 2024. Volvo sales in Europe are up 40%, in China by 49% and in the US by 14%.
United Airlines (NASDAQ:UAL) – United Airlines CEO Scott Kirby has expressed concern about competing airlines flying over Russia and the possibility of diversion to Russian airports in case of medical or technical issues. Russia’s ban on overflights has affected United’s ability to offer competitive flights to India. In addition, newly approved flights by Chinese airlines avoid Russian airspace on flights to and from the United States.
Qantas Airways (USOTC:QABSY) – According to Qantas Chief Executive Alan Joyce, airfares are coming down as airlines increase capacity in the wake of the pandemic. Qantas plans to restore its international network to 100% of pre-Covid-19 capacity by March 2024, with domestic operations reaching 115% next year.
Lufthansa (USOTC:DLAKY) – Carsten Spohr, CEO of Lufthansa, said it is premature to discuss the German airline group’s potential interest in taking control of TAP, while the Portuguese government is still debating privatization. Spohr mentioned that the privatization of TAP will not be 100% and that several major global airlines, including Lufthansa, have shown interest. He also highlighted that Lufthansa is awaiting approval from the European Commission for its stake in ITA Airways and that delivery of the Boeing 777X aircraft is expected in early 2025.
Airbus (USOTC:EADSY) – Airbus is close to closing a deal to sell 500 A320 jets to IndiGo, India’s biggest airline, in a deal that could be worth around $50 billion. IndiGo is also negotiating with Airbus and Boeing for the purchase of 25 wide-body jets. The airline is looking to expand its network and double its capacity in the coming years.
Apple (NASDAQ:AAPL) – Expectations are high on Wall Street that Apple will introduce a virtual and augmented reality headset next week, marking its first foray into a new product category in nearly a decade. Apple’s Worldwide Developers Conference event next week could also boost the company’s stock further. While the mixed reality headset is an exciting move, the category itself has yet to capture mass appeal. Additionally, Apple is expected to announce new MacBooks and operating system updates, but no transformative changes are expected to drive demand or accelerate iPhone updates. However, enhanced features like Dynamic Island can strengthen Apple’s ecosystem.
Microsoft (NASDAQ:MSFT) – During a visit to the country on Monday, OpenAI CEO Sam Altman revealed that the company is exploring investment opportunities in Israel. Altman was hosted at the headquarters of Microsoft, which sponsors OpenAI, during his visit to the country.
Amazon (NASDAQ:AMZN) – Major US wireless carriers have denied they are in talks with Amazon to offer low-cost wireless services to Prime members. Amazon also said it has no plans to add wireless services at this time. Analysts believe that Amazon’s entry into the telecommunications industry could cause major disruptions and drive down wireless prices. Dish Network is seen as Amazon’s most likely partner. In other news, Amazon fired Jennifer Bates, leader of the Alabama union campaign, after taking sick leave. The union alleges that the dismissal was due to a flaw in the company’s software. Amazon has denied wrongdoing and said Bates has the opportunity to appeal the decision.
Walmart (NYSE:WMT) – Walmart continues to seek to double its gross merchandise volume in overseas markets to $200 billion in five years despite global economic uncertainties, a company executive said. Walmart International is confident in its omnichannel strategy and expects to drive global growth by implementing this approach in new and existing markets. In addition, the company plans to offer low prices to attract customers during the back-to-school season.
Palo Alto Networks (NASDAQ:PANW) – Shares in Palo Alto Networks rose more than 5% premarket on news that it will join the S&P 500 Index on June 20 as part of its quarterly rebalancing. The cybersecurity firm will replace Dish Network (NASDAQ:DISH) in the index, S&P Dow Jones Indices said on Friday. Shares in the television services company were down about 5.07% in premarket trade.
C3.ai (NYSE:AI) – Shares in C3.ai were down more than 4% premarket, while Palantir Technologies (NYSE:PLTR) was down 0.92% as AI-focused companies remained in focus after the recent increase.
Sony (NYSE:SONY) – In an interview with the Financial Times, Sony Group Corp. Chief Executive Kenichiro Yoshida mentioned that the company is watching cloud game development and could use artificial intelligence, like its agent Sophy, to that end in the future. He pointed to challenges like maintaining the servers during periods of low demand. Yoshida also mentioned Sony’s expansion into mobile gaming and the acquisition of game studio Bungie Inc. as part of efforts to deliver more live services on PlayStation consoles and beyond. Spider-Man’s return to the big screen was a success, grossing an estimated $120.5 million at the domestic box office. “Spider-Man: Across the Spider-Verse,” the expected sequel, had the second biggest opening of 2023.
Disney (NYSE:DIS) – Pixar, the Walt Disney studio, has laid off 75 employees, including two executives from the underperforming movie “Lightyear.” The layoffs are significant as Pixar is responsible for lucrative franchises such as “Toy Story” and “The Incredibles.” The film “Lightyear” faced restrictions on showing in some countries and received a mixed reception from critics. These layoffs are part of Disney’s restructuring plan to reduce costs.
Epam Systems (NYSE:EPAM) – The shares of Epam Systems Inc. fell 5.64% in premarket trade after the engineering software company slashed its earnings and revenue outlook due to deteriorating near-term demand. The company expects lower adjusted earnings per share for the second quarter and has revised its full-year outlook due to customer spending concerns. The stock has underperformed over the past three months.
Foxconn (USOTC:FXCOF) – Foxconn reported a 9.5% drop in May revenue year-over-year. The company attributed the decline to weakness in smart consumer electronics during the traditionally off-season. A decrease in second-quarter business is expected due to the transition between old and new products. Despite this, the company reiterated its stable full-year outlook.
UBS (NYSE:UBS) – UBS Group announced that it expects to complete the acquisition of Swiss bank Credit Suisse Group (NYSE:CS) on June 12. Upon completion, Credit Suisse shares will be delisted from the Swiss and US stock exchanges. UBS will assume the assets, liabilities and obligations of Credit Suisse. UBS is considering delaying the release of its quarterly results until the end of August due to issues related to the acquisition of Credit Suisse. UBS is in advanced talks to retain more than 100 Credit Suisse investment bankers across Asia except China as part of its plan to attract talent in markets where its rival is strongest.
Goldman Sachs (NYSE:GS) – Goldman Sachs Asset Management has made an offer of NOK 6.6 billion (about US$598.8 million) in cash to acquire Norwegian aquaculture services group Froy. GSAM has reached an agreement to buy a 72% stake in Froy from a Salmar unit for 76.50 kronor per share, and will make an offer for the remainder of the shares at the same price. Froy provides shipping services to fish farmers and aquaculture companies, and GSAM highlighted the importance of these services to promote sustainability.
Morgan Stanley (NYSE:MS) – Strategists at Morgan Stanley are predicting a drop in US corporate earnings, which they believe will stall the country’s stock recovery, contrary to Wall Street estimates. Instead, they are bullish on equities in Japan, Taiwan and South Korea, and recommend an overweight position in developed market government bonds, as well as longer-dated Treasuries and the dollar. While other forecasts are more optimistic, Morgan Stanley sees downside risks to US earnings and anticipates a slowdown in revenue growth and margins.
JPMorgan Chase (NYSE:JPM) – JPMorgan Chase & Co. has partnered with six Indian banks to launch a blockchain-based platform that will enable the settlement of interbank dollar transactions in GIFT City. The pilot project will utilize JPMorgan’s Onyx blockchain platform and aims to facilitate 24/7 transactions, eliminating the delays of the current system.
Wells Fargo (NYSE:WFC) – Wells Fargo & Co. is seeking private mediation to resolve allegations of discrimination against black homeowners. The lawyers agreed to work with a former federal judge to try to settle a group of class actions, sparing the bank public litigation. The allegations involve denial of lower interest rates and excessive charges on loans.
Barclays (NYSE:BCS) – Barclays Private Bank has announced two senior appointments to its Singapore office, seeking to take advantage of rising wealth and family office growth in the city-state. Tom Road has been appointed Deputy Head of Barclays Private Bank in Singapore, while Wengmun Loh has taken over as Head of Trading and Derivatives. These appointments are aimed at strengthening the bank’s presence in the region and meeting the needs of family offices and high net worth clients.
BlackRock (NYSE:BLK) – Major money managers such as BlackRock Inc. are returning to the UK debt market due to attractive yields. Expectations of further interest rate hikes from the Bank of England have subsided, prompting investors to consider British bonds as an interesting option, even with the uncertain economic outlook. However, managers recommend caution and prefer shorter titles. Market confidence will depend on government policy to maintain a sustainable public debt trajectory, according to Bloomberg.
Novo Nordisk (NYSE:NVO) – Danish company Novo Nordisk has announced that it is in exclusive negotiations to acquire a controlling stake in French medical device manufacturer Biocorp (ALCOR). Novo Nordisk intends to buy the more than 45% stake of Bio Jag, the main shareholder of Biocorp, for a price of 35.0 euros per share in cash. The transaction, valued at around €154 million, will also include the transfer of minority shareholder shares. Completion of the purchase is scheduled for the third quarter of 2023.
G1 Therapeutics (NASDAQ:GTHX) – Following positive results from a Phase 2 trial for trilaciclib, shares of G1 Therapeutics rose more than 9% in premarket trade. Data indicate that trilaciclib may improve long-term immune surveillance by enhancing T-cell function and demonstrating benefits on long-term outcomes such as overall survival.
AstraZeneca (NASDAQ:AZN) – The study showed that AstraZeneca’s Tagrisso reduced the risk of death by more than 50% in patients with non-small cell lung cancer (NSCLC) who were diagnosed early and had the tumor removed surgically. These data establish Tagrisso as the main treatment for this type of cancer. AstraZeneca expects to provide more details on the impact of combining Tagrisso with chemotherapy in patients with advanced lung cancer later this year.
Bullfrog (NASDAQ:BFRG) – BullFrog AI Holdings has expanded its license agreement with the Johns Hopkins Applied Physics Laboratory to utilize its patented technology on the bfLEAP platform. bfLEAP is an AI-powered platform that analyzes drug development data to deliver life-saving treatments faster. The laboratory’s technology allows the analysis of complex data sets, helping to reduce costs and failure rates, as well as benefiting patients. BullFrog AI shares rose more than 12% premarket to hit $5.31.
ImmunoGen (NASDAQ:IMGN) – Shares of pharmaceutical company ImmunoGen rose more than 16% in premarket trade on Monday after the release of expanded positive results from a Phase 3 study of its cancer drug Elahere in patients with ovarian cancer. A 35% reduction in the risk of disease progression or death compared with chemotherapy was seen in patients with alpha-folate receptor-positive platinum-resistant ovarian cancer. Accelerated approval for Elahere was granted by the FDA in November 2022.
3M (NYSE:MMM) – 3M Co and the City of Stuart, Florida are making significant progress to address a water pollution process caused by toxic chemicals known as PFAS. The trial has been postponed as the parties involved seek a resolution. The case is one of thousands filed against 3M and other chemical companies. 3M has already announced that it will stop producing PFAS by 2025. PFAS are known as “eternal chemicals” and are associated with health and environmental risks.
Starbucks (NASDAQ:SBUX) – Since 1985, Starbucks has allowed customers to use reusable cups, but the biggest change is on the way. By the end of the year, all US stores will allow these cups for all visits, including drive-thru and mobile ordering. The company seeks to reduce the waste of disposable cups, which represent 40% of packaging waste. While Starbucks has failed on past sustainability goals, this shift is expected to influence the entire industry. Awareness and proper incentives for consumers are crucial to the success of this initiative.
Wesdome Gold Mines (USOTC:WDOFF) – Anthea Bath has been named as the new President and CEO of Canadian gold producer Wesdome Gold Mines, effective July 1. She will succeed Warwick Morley-Jepson, who has held the role of interim CEO since the beginning of the year.
Diageo (NYSE:DEO) – Debra Crew, designated CEO of Diageo, will take over on an interim basis, while current CEO Ivan Menezes undergoes medical treatment. Menezes is in the hospital due to complications following emergency surgery. Crew, who will join the board in July, will lead the company as it seeks to strengthen its presence in the United States and leverage premium brands in the post-Covid landscape.
Incitec Pivot (USOTC:ICPVF) – The Australian manufacturer is considering replacing its CEO, Jeanne Johns, due to investor pressure on the company’s performance. No final decision has been made, but an announcement could be made soon. Incitec Pivot proposed to spin off its fertilizer unit last year, which sparked controversy among investors.
Park Hotels and Resorts (NYSE:PK) – Park Hotels & Resorts has stopped payments on a $725 million commercial mortgage loan secured by two of its San Francisco hotels. The company seeks to reduce its exposure to the city’s uncertain market and hopes that the measure will improve its balance sheet and operational metrics.
Itsarm (LSE:ITS) – Itsarm shares suffered a pre-market drop of more than 40% after the company decided to go into compulsory liquidation due to the analysis of its solvency. The company will file a petition with the high court to dissolve it, due to the risk of damage to creditors.