The inflation rate hit its lowest annual level in about two years in May, with the CPI rising just 0.1% for the month. However, excluding food and energy, core inflation rose 0.4% on the month and 5.3% year-on-year. These numbers are in line with consensus estimates.
At around 8:32 AM, Dow Jones (DOWI:DJI) futures were up 23 points, or 0.07%. S&P 500 futures were up 0.26%, while Nasdaq-100 futures were up 0.67%. The yield on the 10-year Treasury bond was at 3.699%.
China’s announcement of the reduction of one of its short-term interest rates to increase liquidity in the financial system fosters the expectation of more stimulus measures for the Asian giant’s economy and boosted iron ore, in addition to supporting the favorable climate to the risk this morning of waiting for consumer inflation data in May in the United States.
The People’s Bank of China lowered the seven-day reverse repo rate from 2% to 1.9% for the first time in nine months, in a move to inject short-term liquidity. The rate cut is seen as a signal that the Chinese central bank is likely to cut medium-term interest rates at its meeting on Thursday.
Asian stocks rose and the bullish movement continued in European and New York stock markets. Technology and resource stocks, such as mining, led gains in the European market.
In commodities, iron ore rose 0.69%, at 801.5 yuan, or the equivalent of US$112.10 a tonne. The decision by the China’s Central Bank should free up around US$279.68 million for the system and comes in the wake of signs of a slowdown in the economy’s dynamism. Brent crude for August advanced 2.56% to $73.68 a barrel. West Texas Intermediate crude was up 2.34% to settle at $68.69 a barrel.
Defaults in the subprime market have risen sharply this year in the US as the Federal Reserve’s aggressive campaign of interest rate hikes puts pressure on businesses and has driven up borrowing costs at floating rates. There were 18 defaults in the US loan market between January 1 and the end of May, totaling $21 billion – more in number and total amount than in 2021 and 2022 combined, according to a Goldman Sachs analysis of PitchBook LCD data.
By Monday’s close, the S&P 500 and Nasdaq both surged to 13-month highs on expectations that the Fed will take a rate break at Wednesday’s meeting. The Dow rose 189.55 points, or 0.56%, to close at 34,066.33 points. The S&P 500 rose 0.93% to close at 4,338.93 points, The Nasdaq Composite rose 1.53% to close at 13,461.92 points.
Wall Street Corporate Highlights for Today
Manchester United (NYSE:MANU) – Shares of Manchester United rose as much as 30% in premarket trade after reports suggested Sheikh Jassim bin Hamad al-Thani could succeed in his takeover bid. Qatar’s Al-Watan newspaper reported that Sheikh Jassim is about to be announced as the preferred bidder. The club have been in talks for seven months with other bidders, including Jim Ratcliffe.
Oracle (NYSE:ORCL) – Oracle beat fourth-quarter revenue estimates due to growing demand for its AI-enabled enterprise cloud offerings. Oracle’s fourth-quarter revenue jumped about 17% to $13.84 billion, beating analysts’ estimates of $13.74 billion, according to Refinitiv. Cloud revenue increased 54% to $4.4 billion. The company also predicts an upbeat first quarter, rising 8% to 10% in the first quarter. Its foray into cloud computing, including its partnership with Nvidia, is fueling its growth.
Toyota (NYSE:TM) – Toyota plans to introduce high-performance solid-state batteries to improve range and reduce costs for electric vehicles (EVs). In addition, the automaker intends to redesign its factories and launch next-generation lithium-ion batteries from 2026. The company is also developing solid-state batteries and expects to sell them between 2027 and 2028. Toyota seeks to compete in the car market. EVs, where it lags behind rivals like Tesla.
Tesla (NASDAQ:TSLA) – Industry body CharIN has stated that Tesla’s charging model is not yet a standard and does not offer an open ecosystem. General Motors (NYSE:GM) and Ford (NYSE:F) will adopt Tesla’s model starting in 2025. CharIN will convene a task force to standardize the NACS, previously owned by Tesla. The stock is higher in premarket trade on Tuesday after closing higher on Monday for a record 12th consecutive session. Shares in the electric vehicle maker were boosted by optimism over tax credits, its charging network and the Cybertruck. Separately, Cathie Wood’s ARK Invest reported on Monday that it sold 324,511 Tesla shares worth approximately $80 million.
Blink Charging (NASDAQ:BLNK), ChargePoint (NYSE:CHPT), Tritium (NASDAQ:DCFC) – Electric vehicle charging equipment makers Blink Charging, ChargePoint and Tritium have announced that they will offer Tesla connectors as the Combined Charging charging standard System (CCS) is being abandoned by automakers. Tesla’s NACS connector is more compact and lightweight, making it easier to use. Other companies such as EVgo (NASDAQ:EVGO) and ChargePoint are also expanding their connector options. Tesla’s revenue from its charging network is expected to increase significantly in the coming years.
Glencore (USOTC:GLNCY), Stellantis (NYSE:STLA), PowerCo – Glencore, Stellantis and PowerCo have agreed to support a $1 billion deal with ACG Acquisition to acquire two mines in Brazil. The agreement boosts the mining of metals needed for the global green energy transition, with refined nickel being used in the production of batteries for electric vehicles. ACG will become ACG Electric Metals and will have the majority of shares, while the mines consider expansions and use hydroelectric power.
Volkswagen (USOTC:VWAGY) – Volkswagen’s supervisory board will meet today to discuss a cost-cutting program worth at least €3 billion ($3.22 billion) across the Volkswagen, Seat, Skoda and Cupra brands. The aim is to reduce duplicate development work and improve utilization of German factories. The company plans to provide more information during the stock market day on June 21.
General Motors (NYSE:GM) – General Motors announced that it plans to invest $632 million in its Fort Wayne, Ind., assembly plant to prepare it for future production of heavy duty, internal combustion engine light trucks. These investments are part of a broader plan by GM to retool its plants and introduce more efficient internal combustion vehicles. The company also plans additional investments in the coming weeks. GM continues to invest in gasoline-powered vehicles despite its commitment to stop production of these vehicles by 2035 due to stricter emissions requirements.
Harley-Davidson (NYSE:HOG) – Harley-Davidson said it will have limited operations at its motorcycle factory in York due to an issue with parts from a third-party supplier. Production will resume on June 13th, but the company expects full operations by June 26th. Newer motorcycles are not affected.
GlobalFoundries (NASDAQ:GFS), Lockheed Martin (NYSE:LMT) – GlobalFoundries and Lockheed Martin have teamed up to secure domestic supply of semiconductors for defense systems. The partnership aims to manufacture advanced and next-generation chips, strengthening the resilience of microelectronic systems and supply chains. The collaboration supports US government initiatives to bring semiconductor manufacturing back to the country. In addition, companies will pursue government funding and collaboration opportunities, and develop a chiplet ecosystem.
Ryanair (NASDAQ:RYAAY), IAG (USOTC:ICAGY) – Ryanair is interested in acquiring the slots that International Consolidated Airlines Group (IAG) may be required to sell to gain regulatory approval for the planned acquisition of Air Europa. The Irish airline is eyeing growth opportunities in Spain, including slots in the Canary Islands, Balearic Islands and Madrid. The deal is still awaiting antitrust approval from the European Commission.
United Airlines (NASDAQ:UAL) – United Airlines is offering pilots a contract worth more than $8 billion over four years, making it the most lucrative deal in US airline history. Negotiations are ongoing, with the company looking to outbid its rivals’ deals. CEO Scott Kirby said travel demand is strong and the company does not intend to lower flight experience requirements for pilots.
Intel (NASDAQ:INTC) – Intel is in talks to become an anchor investor in the IPO of Arm, a maker of chip designs. Arm plans to raise between $8 billion and $10 billion from the initial public offering. Negotiations between Intel and Arm are ongoing, but there is still no official confirmation.
Taiwan Semiconductor (NYSE:TSM) – Taiwan Semiconductor Manufacturing Co has regained its market value of $500 billion, driven by increased bets on technology leaders to tackle the expected AI boom. The company gained more than 3% on Tuesday, consolidating its position in the top 10 most valuable in the world. Investors are piling on stocks in Nvidia and Oracle, deeming them well positioned to meet demand for the chips and computing power needed for AI. While TSMC has expressed caution regarding the smartphone market, a gradual recovery is expected in the second half and a return to growth in 2024.
Nvidia (NASDAQ:NVDA) – Synthesia, an AI-powered video creation platform, has raised $90 million in funding. The funding round was led by Accel, with participation from Nvidia and other investors. Synthesia develops AI-generated animated avatars, enabling the creation of corporate and training videos. The company plans to expand its technology and make avatars more expressive. Despite ethical concerns about deepfakes, Synthesia maintains a focus on accountability and consent.
Alphabet (NASDAQ:GOOGL) – Sundar Pichai, CEO of Alphabet Inc., discussed the role of artificial intelligence (AI) at Google, including the ethical challenges and competition with other companies such as Microsoft. He stressed the importance of getting AI products right, mentioned the risks associated with the technology, and highlighted the need for proportionate regulation. Pichai also addressed concerns about Google researchers leaving the company to start up competitors and mentioned the importance of responsible AI.
Rio Tinto (NYSE:RIO) – Rio Tinto will invest $1.1 billion to expand its “low carbon” aluminum smelter in Quebec, Canada. The investment will increase annual capacity by around 160,000 metric tons, enough to power 400,000 electric cars. The Canadian government will also support the expansion. Rio Tinto also announced a partnership with Gemco Rail to manufacture iron ore railcars and maintain bearings in the Pilbara region. Rio will invest around A$150 million to acquire 100 locally built railcars over six years. This initiative aims to improve transport infrastructure and reduce carbon emissions in the region.
Blackrock (NYSE:BLK) – BlackRock has launched the “Brown to Green Materials Fund,” targeting undervalued carbon-intensive companies producing energy transition-related raw materials and products. Demand for critical metals for green energy will drive the growth of companies adopting low-carbon technologies. The fund seeks to capitalize on investment opportunities in these growth sectors.
UBS (NYSE:UBS) – About 10% of Credit Suisse employees left before the UBS acquisition, according to UBS Chief Executive Sergio Ermotti. This departure was due to uncertainty and competitors’ recruiting efforts. UBS completed the acquisition and plans to reduce jobs to cut costs and take advantage of synergies.
HSBC (NYSE:HSBC) – HSBC has announced the closure of its wealth and personal banking businesses in New Zealand as part of its strategy to exit less profitable businesses globally. The decision is part of a strategic review and will be implemented gradually over several years. The bank will continue to expand its wholesale banking business in the country.
SoftBank (USOTC:SFTBY) – SoftBank is planning additional layoffs in its Vision Fund to reduce costs. About 30% of the unit’s employees could be impacted, including those in the US. SoftBank faced significant losses on its investments, leading to a reduction in its investment activity. The company seeks to find a balance between defense and attack, indicating possible future investments.
Morgan Stanley (NYSE:MS) – James Gorman, CEO of Morgan Stanley, revealed that the bank is considering expanding its asset management business, regardless of geographic location. He also mentioned that the succession process is ongoing and that the candidates’ business areas will not be a decisive factor in the choice.
Goldman Sachs (NYSE:GS) – David Solomon, CEO of Goldman Sachs, said that the US economy has shown more resilience than feared, despite slightly more rigid inflation. He expects a recovery in capital markets activity and stressed that people cannot put off the need for capital indefinitely. While fundraising and block trading activity recovered, IPO volumes were the lowest since 2019 in the first quarter.
Bank of America (NYSE:BAC) – Bank of America CEO Brian Moynihan said the company would consider acquiring another lender through a deal brokered by the Federal Deposit Insurance Corp. He pointed out that the banking industry is strong and that many concerns are overblown. Moynihan mentioned that the US economic slowdown and interest rate hikes by the Federal Reserve are hurting borrowing and the demand for it. Bank of America faces potential higher capital requirements due to recent bank failures.
KeyCorp (NYSE:KEY) – KeyCorp said at an investor conference that net interest income will be smoother than expected based on funding mix and deposit cost pressures.
Zions Bancorp (NASDAQ:ZION) – Shares fell 1.6% after the regional bank said its net interest income outlook was “diminishing”. The bank’s previous outlook described the outlook as “moderately downsizing,” according to StreetAccount. The update came in a presentation published on Monday afternoon.
Jefferies Financial Group (NYSE:JEF) – Jefferies is about to hire Felicity Chan, co-head of Credit Suisse Group AG for the Asia Pacific capital markets syndicate. The company also plans to hire Rehan Anwer, Credit Suisse’s head of capital markets in Southeast Asia. Jefferies is expanding its presence in Asia, adding senior bankers from various institutions over the past 12 months.
Nasdaq (NASDAQ:NDAQ) – Nasdaq has agreed to acquire Thoma Bravo’s software company Adenza for $10.5 billion, expanding its presence in fintech. Nasdaq shares fell after the announcement on concerns about the deal’s price. The acquisition will help Nasdaq diversify its operations and drive revenue growth. Thoma Bravo will receive a share in Nasdaq as part of the deal.
Activision Blizzard (NASDAQ:ATVI), Microsoft (NASDAQ:MSFT) – The Federal Trade Commission (FTC) has asked a court to temporarily block Microsoft’s acquisition of Activision Blizzard, citing antitrust concerns. The FTC argues that the settlement would give Microsoft the ability to undermine competition and access Activision’s confidential information. Microsoft has offered concessions to alleviate those concerns, but the FTC is seeking to stop the deal from closing before settling the case. The trial is scheduled for August.
Thyssenkrupp (USOTC:TKAMY) – Thyssenkrupp has launched the long-awaited listing of its hydrogen division, Thyssenkrupp Nucera, targeting revenues of up to €600 million through the sale of new shares. The IPO is expected to close before the summer break, driven by increased interest in hydrogen technology.
Verizon Communications (NYSE:VZ) – Verizon Communications is looking for a new chief financial officer and potential candidates to succeed CEO Hans Vestberg, according to sources quoted by the Wall Street Journal. The company reshuffled its senior leadership in March, and Vestberg is actively involved in the search for a CFO, with several candidates still under consideration. Verizon is working with recruitment firm Spencer Stuart.
Anheuser-Busch InBev (NYSE:BUD), Molson Coors Beverage (NYSE:TAP) – Anheuser-Busch InBev and Molson Coors Beverage are expected to gain market share in the US this year as consumers turn to cheaper beers due to to costs. Craft beers suffer a drop in demand, while large breweries benefit from increased sales of more affordable beers.
Domino’s Pizza Enterprises (NYSE:DPZ) – Domino’s Pizza Enterprises announced the closure of 27 stores in Denmark and its construction and supply arm in Australia, leading to an 11.9% drop in the stock. The company seeks to simplify operations and improve earnings before interest and taxes. The restructuring will result in non-recurring costs, and the company expects sales to remain below the annual growth outlook.
Google (NASDAQ:GOOGL), Snapchat (NYSE:SNAP), Meta (NASDAQ:META) – The Danish government plans to raise the age limit for the collection of personal data from children by technology companies such as Google, Snapchat and Meta. They want to raise the age of consent for data sharing to between 15 and 16 years old, instead of the current 13 years old, and will require parental consent for data from younger children. The measure follows similar actions in other European countries and in the United States. In addition, age verification measures are being considered to protect children from inappropriate content.
Amazon (NASDAQ:AMZN) – Amazon is testing an artificial intelligence feature that summarizes product reviews. This can help shoppers get a quick overview of customer reviews. The company has been investing in generative AI to improve the customer experience and fight fake reviews.
Apple (NASDAQ:AAPL) – Shares in Apple closed at an all-time high for the first time in over a year, boosting the tech giant’s lead. Up 1.6%, they reached a high of $183.79 on Monday. Apple’s impressive performance in 2023, with gains in excess of 41%, and its recent results have generated investor confidence and enthusiasm, propelling its market cap to $2.89 trillion. The company is on track to reach a historic $3 trillion valuation.
Salesforce (NYSE:CRM) – Salesforce shareholder support for CEO Marc Benioff increased after a dispute with activist investors. Fewer shareholders backed a proposal to replace Benioff as chairman. Salesforce has won back shareholders after a tumultuous six months, focusing on profit and increasing share value. Benioff promoted the company’s generative AI strategy, highlighting its potential to drive revenue. Although a proposal for an independent president received support from some consulting firms, it did not win a majority vote.
Chegg (NYSE:CHGG) – Chegg Inc plans to cut 4% of its workforce due to increased use of AI chatbots such as ChatGPT by students. The company aims to better position itself to implement its AI strategy by incorporating automated chatbots such as CheggMate into its brand. Chegg shares dropped significantly after recognizing the impact of generative AI on their business. The company’s revenue is generated primarily through sales of subscriptions to help with problem solving and school assignments.
Biogen (NASDAQ:BIIB) – Biogen has received unanimous support for the Alzheimer’s drug by US regulatory advisors, strengthening the case for traditional approval. Concerns about the risks were considered manageable and balanced against the benefits of the drug. Traditional FDA approval is scheduled for July 6.
Catalent (NYSE:CTLT) – Catalent reported quarterly revenue above estimates, $1.04 billion versus $952.7 million expected, despite production issues. The contract drug maker cut its fiscal 2024 revenue forecast to a range of $4.23 billion to $4.33 billion. Although the company reported a higher quarterly loss and lowered its full-year revenue forecast, strength in its biologics unit drove sales above expectations.
Carnival (NYSE:CCL) – Shares in Carnival Corp and Norwegian Cruise Line Holdings Ltd (NYSE:NCLH) rose premarket, buoyed by the prospect of rising demand for travel. Analysts highlighted historic bookings in the cruise industry, driven by pent-up demand from loyal customers. Commercial airlines also saw gains, driven by falling oil prices and increased demand for seats.
Bunge (NYSE:BG) – Bunge fell 2.9% after the agricultural company reached an agreement to merge with privately held Viterra in an equity and cash transaction worth about $8.2 billion. Bunge will assume $9.8 billion of Viterra’s debt under the terms of the deal.
Home Depot (NYSE:HD) -Stock in Home Depot Inc. rose 0.7% in premarket trade on Tuesday after the company reaffirmed its full-year earnings outlook. The company predicts a drop in sales and profits, but expects steady growth once the home improvement market stabilizes. The stock has posted a 4.8% drop this year, while the Dow Jones Industrial Average has gained 2.8%. Home Depot will hold its investor and analyst conference on Tuesday morning.
Market vision
Urban Outfitters (NASDAQ:URBN) – Urban Outfitters rose 3.4% after analysts at Morgan Stanley lifted the retailer’s shares to Overweight from Equal Weight.
Roblox (NYSE:RBLX) – Roblox was up 1.6% after the online gaming company kicked off with a Buy rating on Canaccord.
Ulta Beauty (NASDAQ:ULTA) – Ulta gained 1% after the beauty retailer was upgraded to Buy from Hold by analysts at Loop Capital. The company said that Ulta’s expansion into the luxury category “represents a multi-year comparable sales growth driver” and its partnership with Target “will drive incremental revenue.”
First Horizon (NYSE:FHN) – JPMorgan Chase has assigned a Neutral rating to First Horizon Corp with a price target of $13, following a previous Overweight rating. After the cancellation of the merger with TD, First Horizon held an investor day. First Horizon shares were down 4% in premarket trade.
Apple (NASDAQ:AAPL) – Apple was down 0.7% premarket after UBS downgraded the stock to Neutral from Buy on Monday. The Wall Street company said it sees continued pressure for iPhone demand, even with support from emerging markets.