US Index Futures trade lower as the S&P 500 consolidates in a bull market – more than 20% above the last technical bottom after US jobless claims data showed some market normalization of work.
At around 7:27 AM, Dow Jones (DOWI:DJI) futures were down 72 points, or 0.21%. S&P 500 futures were down 0.03%, while Nasdaq-100 futures were up 0.09%. The yield on the 10-year Treasury bond was at 3.747%. West Texas Intermediate crude was up 0.22% to settle at $71.45 a barrel. Brent oil rose this morning, but headed for the second consecutive week of declines due to concerns about demand.
Another help for local assets comes from iron ore, as the contract for September soared 3.4%, to 812 yuan, or the equivalent of US$114.03 per tonne, on Friday and extended gains to more than 7% for the week on the Chinese Stock Exchange in Dalian. Some state-owned commercial banks have cut lending rates in China, in a move that could herald cuts in the country’s basic interest rate, according to Japanese bank Nomura.
At the turn of dawn, China released data on price dynamics in the country amid signs of uneven economic recovery. The consumer price index rose 0.2% in May, below the consensus 0.3% and after rising just 0.1% in April. The producer price index had the biggest drop since 2016, dropping 4.6% in May, against a consensus that predicted a fall of 4.3%.
On Friday’s economic agenda, the US WASDE report will be released at 12:00 pm, and the Baker Hughes rig count at 2:00 pm.
Former US President Donald Trump has been indicted in an investigation into confidential documents, as he himself announced on his social networks yesterday. The papers were taken from the White House to his home in Mar-a-Lago, a resort in Florida. It is the first time in American history that a former president has faced federal criminal charges while campaigning for another White House bid.
At the close of Thursday, the Dow Jones added 168.59 points, or 0.5%, to close at 33,833.61 points. The S&P 500 rose 0.62% to end the day at 4,293.93 points – its highest closing level of 2023. The Nasdaq Composite rose 1.02% to close at 13,238.52 points. New data released on Thursday showed initial jobless claims hit their highest level since October 2021, indicating a potentially weaker job market. The hike also boosted hopes that the Fed will pause its rate hike campaign at next week’s meeting. Applications for unemployment benefits grew by 28 thousand, to 261 thousand, in the week ended on the 3rd, analists heard by FactSet predicted 240 thousand.
Wall Street Corporate Highlights for Today
Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT) – Google and Microsoft are running ads into AI experiments without offering an opt-out option, which has angered some brands and risks more industry pushback, according to ad buyers. Both tech giants are using artificial intelligence in their search engines to generate written responses. Advertisers are concerned about budget allocation and lack of control over the delivery of ads. While the companies say existing protections apply to AI-generated search results, transparency reporting and preventing ads on false responses are key concerns.
Target (NYSE:TGT) – Amazon (NASDAQ:AMZN) is reducing delivery routes in areas with poor air quality due to wildfires in Canada by providing N-95 masks to couriers. Target may also disable its “Drive Up” service in affected regions. Home Depot (NYSE:HD) is shipping supplies to handle the demand. Schools canceled outside activities and companies encourage working from home.
Walmart (NYSE:WMT) – Walmart launched an HIV specialty pharmacy program, expanding access to antiviral medications and support services. The aim is to combat the HIV epidemic, tackling challenges such as stigma and racial and ethnic disparities. Other pharmacies such as CVS and Walgreens are also involved in the initiative, aiming to improve patient outcomes and act as community health providers. The goal is to expand access to medicines and support services to end the HIV epidemic by 2030.
Amazon (NASDAQ:AMZN) – The adviser to Europe’s highest court said today that Amazon is not obligated to pay €250 million ($268 million) in back taxes to Luxembourg due to errors in the EU regulator’s assessment . The European Commission deemed the tax deal to be illegal state aid, but a lower court threw out the decision in 2021. The EU Court of Justice will rule in the coming months.
Meta Platforms (NASDAQ:META) – Meta Platforms launched WhatsApp Channels on Thursday, aiming to turn the app into a “private broadcast messaging product”. Users in Colombia and Singapore will be the first to gain access, with expansion to other countries in the coming months. Partners such as WHO, FC Barcelona and Manchester City have already joined. In other news, CEO Mark Zuckerberg shared during a meeting on Thursday that Meta is focused on leading the AI race. He highlighted the company’s efforts in the field of generative AI and its unique role in bringing these capabilities to billions of people. Meta is embedding generative AI models in the metaverse and plans to launch services on Instagram, Messenger and WhatsApp that take advantage of artificial intelligence.
Palantir Technologies (NYSE:PLTR) – Alex Karp, CEO of Palantir, has expressed his opposition to a pause in artificial intelligence research, in contrast to an open letter signed by prominent figures in the technology industry. The letter requested a pause in AI research on models larger than the GPT-4. Karp argues that a break would allow adversaries to steal the lead in both commercial and military applications, emphasizing the strategic importance of AI on the battlefield. It highlights Palantir’s role in the technological advantage of Ukrainian forces against invading Russian forces.
Advanced Micro Devices (NASDAQ:AMD) – The exceptional stock performance of Advanced Micro Devices Inc. this year highlights its position as a backup option for investors seeking artificial intelligence trading. While rival Nvidia Corp. posted a stratospheric gain, AMD has a chance to prove itself with new data center chips. AMD is ready to compete with Nvidia, and investors are eyeing its next release, the MI300. AMD’s stock is up 87% this year, and the company is chasing market share in data center hardware suited to AI computing.
Acer (USOTC:ACEIY) – Acer supplied $70.4 million worth of hardware to Russia between April 2022 and March 2023, despite having announced the suspension of business in the country. While Dell (DELL, D1EL34) and HP (HPQ, HPQB34) stopped shipments, Acer continued to ship products through its Swiss subsidiary. While Acer’s actions do not violate Taiwan or Swiss sanctions, this is in stark contrast to its Western competitors. The shipments show how foreign products are still available to Russian consumers despite international sanctions. Acer’s reputation could be damaged by this situation.
SoFi Technologies (NASDAQ:SOFI) – Shares of SoFi are up nearly 50% in the last month, but analyst Michael Perito, an analyst at Keefe, Bruyette & Woods, maintains mixed opinions about the company. Although there are uncertainties about the impact of fair value on earnings, the analyst highlights the progress of cross-selling and the stability of credit performance, which supports the company’s growth prospects. The debt ceiling deal benefits SoFi, but a significant change in expectations for 2023 is not expected. The company’s CEO expressed confidence in the tailwinds and future growth potential.
Bank of America (NYSE:BAC) – Bank of America promoted Alex Bettamio to co-head of global investment banking, along with Thomas Sheehan, in a series of leadership changes. Faiz Ahmad will lead global capital markets, Elif Bilgi Zapparoli will head international client strategy, and other appointments have also been announced.
Credit Suisse (NYSE:CS) – Credit Suisse and a joint venture partner are looking for buyers for their brokerage business in China following acquisition by UBS. Citigroup (NYSE:C) has shown interest in acquiring the Credit Suisse subsidiary. Citi had planned to expand through acquisition but has now opted for organic growth. Chinese regulations prevent an entity from having two majority brokerage licenses. UBS owns a majority stake in another exchange. Credit Suisse owns 51% of the loss-making subsidiary and has closed a deal to acquire its partner, but is still awaiting regulatory approval.
UBS (NYSE:UBS) – The Swiss government has signed an agreement with UBS to cover up to CHF9 billion in losses arising from the acquisition of Credit Suisse. The guarantee will come into effect if losses exceed CHF5 billion, as per the terms of the March takeover.
Kennedy Wilson (NYSE:KW) – Kennedy Wilson announced the initial closing of loans on a $5.7 billion loan portfolio acquisition of Pacific Western Bank. The deal will strengthen PacWest ‘s (NASDAQ:PACW) liquidity and capital, while Kennedy Wilson expands its debt portfolio for substantial future growth. PacWest stock was up 0.7%, while Kennedy Wilson was up 8.9% in 2023.
Blackrock (NYSE:BLK) – BlackRock plans to raise up to $7 billion for its fourth Global Renewable Energy Fund as institutional investors seek climate-friendly opportunities. The fund focuses on renewable energy projects in OECD countries and can invest in wind, solar, battery and grid infrastructure. Demand for sustainable investments has increased due to the transition to a low-carbon economy and financial support from governments. BlackRock expects to make 18 to 22 investments under the new fund.
Visa (NYSE:V), Mastercard (NYSE:MA) – Visa and Mastercard have faced lawsuits over retailer fees, but a London court has ruled that the class-action cases cannot proceed for now. Companies already face a number of lawsuits related to multilateral interchange fees. The court gave a deadline for adjustments in the processes, if they wish to continue. Visa faces over 2,300 applicants in the UK.
General Motors (NYSE:GM) – General Motors will follow Ford in adopting the Tesla Charging Plug Standard (NASDAQ:TSLA), giving GM electric vehicle buyers access to the Tesla Supercharger network. The deal has been well received by investors and challenges the direction of the Biden administration. The alliance between Tesla, GM and Ford could lead to wider adoption of electric vehicles. In other news, GM will invest more than $500 million at the Arlington, Texas plant to produce the next generation of gasoline SUVs. GM plans to invest about $3 billion this month to retool US plants to meet stricter emissions requirements.
ChargePoint Holdings (NYSE:CHPT), EVgo (NASDAQ:EVGO), Blink Charging (NASDAQ:BLNK) – Shares of electric vehicle charging companies fell in premarket after Tesla announced the opening of its charging network to General Motors. Shares in ChargePoint Holdings fell more than 6%, while EVgo Inc. dropped more than 10%. Blink Charging Co. also registered a decrease of 1.8%.
Tesla (NASDAQ:TSLA) – Tesla is in talks with regional government officials in Valencia, Spain, for an automotive investment. Although the government denies a sealed deal, rumors point to a car factory with a potential investment of up to 4.5 billion euros. Spain is seeking to entice automakers to invest in electric vehicles with EU recovery funds. Tesla has yet to confirm investment plans.
BYD (USOTC:BYDDY) – BYD unveiled a new electric vehicle brand called Fang Cheng Bao, covering off-road and sports models, to meet diverse consumer demand. The first model, an SUV internally identified as the SF, will be released this year. BYD is expanding its market presence with additional brands, including a premium one called Yangwang.
Lucid (NASDAQ:LCID) – Luxury electric vehicle maker Lucid Group is preparing to enter the Chinese auto market, planning to sell imported cars and possibly considering local production. The company seeks to bring advanced electric vehicle technology to China amid financial challenges and fierce competition.
Mercedes-Benz (USOTC:MBGAF) – The California Department of Motor Vehicles has approved Mercedes-Benz’s automated driving system on designated highways under certain conditions, making it the first automaker to receive authorization to sell cars with this system to the public in California . The Level 3 ‘DRIVE PILOT’ system will allow drivers to take their eyes off the wheel, but must be ready to take back control.
Toyota (NYSE:TM) – Toyota will invest an additional $328 million at its Mexico plant to convert production of its Tacoma pickup truck into a hybrid electric model. The investment aims to serve the North American market. Mexico is seeking to increase production of electric vehicles to comply with stricter emissions rules.
Harley-Davidson (NYSE:HOG) – Harley-Davidson temporarily halted production at its Pennsylvania assembly plant due to a parts shortage, for the second time in just over a year. Production will resume on June 13. The company did not specify the parts involved.
AstraZeneca (NASDAQ:AZN) – AstraZeneca has signed an agreement with Quell Therapeutics, potentially valued at more than $2 billion, to develop cellular therapies aimed at curing autoimmune diseases. The agreement covers the development, manufacture and commercialization of treatments for type 1 diabetes and inflammatory bowel disease, with an advance of $85 million to Quell and the possibility of additional payment for development and commercialization milestones.
Novartis (NYSE:NVS) – Sandoz, the generics division of Novartis, is focusing on biosimilars to drive its future as an independent company. The company hosted a capital markets day to highlight its pipeline and overcome the difficult global environment. It hopes to increase net sales and margins by investing more in biosimilars.
Gamestop (NYSE:GME) – GameStop suffered a sharp drop on Thursday after the unexpected departure of its CEO assigned to lead its online expansion, raising concerns about the video games retailer’s business. The firing of Matt Furlong and the lack of clear direction raised questions about the future of the company. Analysts say GameStop is facing significant challenges.
Wheaton Precious Metals (NYSE:WPM) – Randy Smallwood, CEO of Wheaton, the precious metals streaming company, said that gold and silver have perpetual market power due to their nature as ancient currencies. He highlighted that gold is a lasting store of value and immune to political influence. Smallwood also mentioned the shortage of silver supply and the company’s expected growth. As a streaming company, Wheaton offers a lower-risk opportunity for investors.
Keyera Corporation (USOTC:KEYUF) – Keyera has resumed operation of its six gas plants that were closed due to wildfires. The production interruption will negatively impact the operating margin of the collection and processing segment by approximately C$13 million. A scheduled stoppage at the Wapiti gas plant has been postponed due to the outage, while recovery at the Rimbey gas plant continues as planned.
Earnings
Planet Labs (NYSE:PL) – Planet shares fell more than 13% premarket after the company cut its full-year revenue outlook. The company lowered its fiscal 2024 revenue forecast to a range of $225 million to $235 million, down from a previous forecast of between $248 million and $268 million, and expects further losses in adjusted EBITDA. . Despite this, Planet still sees strong demand for its data solutions and is focused on the road to profitability. Planet’s customer base increased to 903, up from 882 at the end of the fourth quarter.
Braze (NASDAQ:BRZE) – Cloud-based software company Braze rose 9% after revenue in its fiscal first quarter jumped more than 31% to $101.8 million, and the loss for the period was less than expectations of analysts.
DocuSign (NASDAQ:DOCU) – DocuSign jumped 7.8% in Friday’s pre-market trade after the e-settlement company beat analysts’ expectations for the first quarter. DocuSign posted adjusted earnings of 72 cents per share for the first quarter, beating consensus estimates of 56 cents, according to Refinitiv. It reported revenue of $661 million, beating expectations of $642 million.
Vail Resorts (NYSE:MTN) – Stocks were flat premarket after Vail Resorts missed third-quarter earnings expectations. The mountain resort company reported earnings of $8.18 a share, while analysts polled by Refinitiv were expecting $8.84 a share. The company reported revenue of $1.24 billion, below the estimate of $1.27 billion.
Comtech Telecommunications (NASDAQ:CMTL) – Stocks were flat premarket after Comtech Telecommunications reported fiscal third-quarter results. The satellite communications company reported a GAAP loss of 33 cents per share, higher than the year-ago period when it posted a loss of 6 cents per share. It slightly beat revenue expectations, recording $136.3 million, compared to consensus estimates of $136 million, according to FactSet.
Nio (NYSE:NIO) – The shares of Nio Inc. fell more than 3% premarket after the Chinese electric vehicle maker reported widened first-quarter losses and lower-than-expected revenues. The company also provided a bearish outlook due to falling average selling prices. Net losses increased, while deliveries and gross margin were impacted. Nio expects a reduction in deliveries and revenues in the second quarter. The company’s shares are down 11.4% over the past three months, while the S&P 500 has gained 9.6%.
Carvana (NYSE:CVNA) – Shares in used car retailer Carvana Co closed up 56.0% on Thursday after the company forecast adjusted earnings above Wall Street expectations. The move was also driven by a short squeeze, but the stock is still well below its 2021 peak. Carvana said it expects to report second-quarter adjusted earnings before interest, depreciation and amortization (EBITDA) above $50 millions. This EBITDA forecast exceeded consensus expectations for a $6 million loss.
Market View
Corning (NYSE:GLW) – Shares in specialty glass maker Corning rose 3.19% to $32.69 after analysts at Morgan Stanley raised the stock to Overweight from Equal Weight and raised its price target from $35 to $38.
Target (NYSE:TGT) – Target was downgraded to Neutral from Buy by Citi, and the price target was lowered to $130 from $177. Shares in the retailer were down 1.38% in premarket trade, to $129.46.