US Index Futures are lower on the prospect of tighter restrictions on AI technology exports to China. Investors are also looking forward to Federal Reserve Chair Jerome Powell joining a panel with other central bank leaders seeking insights on US monetary policy.
By 7:05 AM, Dow Jones (DOWI:DJI) futures were up 18 points, or 0.05%. S&P 500 futures were down 0.10%, while Nasdaq-100 futures were down 0.23%. The 10-year Treasury yield was at 3.737%.
Elsewhere in commodities markets, West Texas Intermediate crude for August rose 0.03% to trade at $67.75 a barrel. Brent crude for August was up 0.07% to $72.31 a barrel. Iron ore renewed its three-month high even after data showed China’s industrial profits slumped by 18.8% year-on-year.
Wednesday’s US economic agenda:
- US Mortgage Market Index – 07:00 am
- Wholesale stocks – 08:30 am
- Change in oil inventories EIA – 10:30 am
- The chairman of the Federal Reserve (Fed), Jerome Powell, speaks at 9:30 am on a panel at the economic policy forum of the European Central Bank (ECB).
Tuesday was governed by the economic agenda in the US, and American stock markets recorded a strong recovery. The Dow Jones rose 212.03 points, or 0.63%, to 33,926.74 points. The S&P 500 jumped 49.59 points or 1.15% to 4,378.41 points. The Nasdaq Composite rose 219.89 points or 1.65% to 13,555.67 points. As the main highlight of the day, a better than expected reading for the consumer confidence index (C. Board) reinforced bets on a more resilient American economy, which is slow to show signs of weakness for consumption and the job market. The data corroborates the view that, despite the prospect of higher interest rates for longer, the world’s main economy contemplates a “soft landing”, with reduced chances of a recession of greater proportions.
Ahead of Wednesday’s quarterly results, traders will be watching reports from General Mills and UniFirst ahead of market opening. Post-closing reports are expected from Micron, BlackBerry, Concentrix, HB Fuller, Culp, among others.
Wall Street Corporate Highlights for Today
Alphabet (NASDAQ:GOOG) – Google has announced that it is cutting jobs at mapping app Waze by merging its advertising system with Google Ads technology. The company did not release details on the number of layoffs, but said the transition is aimed at improving the experience for advertisers. In other news, the Google Brazil executive stated that the company supports the dialogue on the regulation of digital platforms in the country, and is in negotiations with Brazilian authorities and legislators in order to change the Fake News Law project. Elsewhere, a Russian court fined Google $47 million for failing to pay an earlier fine for alleged abuse of a dominant position. TASS said Google must pay the fine within 60 days.
Microsoft (NASDAQ:MSFT) – A Russian-linked hacker group has attacked Microsoft and other targets in Israel and Sweden, according to Bloomberg. Under the name “Anonymous Sudan”, they present themselves as Muslim hacktivists, but researchers have discovered that they are a front to promote Russian interests. The attacks aim to create anti-Western tensions and narratives. The group has also teamed up with other Russian hackers to carry out cyberattacks against European banks in support of Ukraine.
Nvidia (NASDAQ:NVDA), AMD (NASDAQ:AMD) – The US Department of Commerce will stop chip shipments to China starting in July, according to the Wall Street Journal. Nvidia, Micron and AMD are involved in tensions between China and the Biden administration. The new restrictions would even prohibit the sale of A800 chips without a special US export license.
Micron Technology (NASDAQ:MU) – Micron Technology will announce fiscal third quarter results after today’s close, providing an update on demand for memory chips. Despite China’s ban, Wall Street advises investors to focus on the company’s long-term opportunities. Analysts polled by FactSet estimate that Micron will report revenue of $3.65 billion with an adjusted loss per share of $1.61 for the quarter ended in May.
Unity Software (NYSE:U) – Shares in Unity rose more than 15% on Tuesday, following the launch of a new artificial intelligence market and recognition of opportunities stemming from a recent acquisition, highlighted by an analyst. The introduction of the AI market and positive outlook boosted Unity’s share value, which closed at $42.38. Analysts have given the stock a favorable rating, which is up 48.2% for the year, and the company continues to stand out in the software sector.
Tesla (NASDAQ:TSLA) – Analysts say Tesla is on track to achieve another record quarter of sales in China, despite growing local competition such as BYD. Tesla is estimated to sell 155,000 cars in China in the second quarter, up 13%. Tesla’s global sales figures will be released over the weekend, while China sales data will be available in the first week of July. In other news, Volvo Cars (VLVLY) has signed a deal with Tesla to allow its electric vehicles to access the Supercharger network in the US, Canada and Mexico.
Ford Motor (NYSE:F) – Ford has announced layoffs of engineering jobs in the US and Canada as part of its restructuring. Although it did not specify the exact number, it is estimated that at least 1,000 employees will be affected. The measure is part of the Ford+ growth plan and seeks to align the team with the company’s priorities.
Stellantis (NYSE:STLA) – Stellantis launched the ‘Charging & Energy’ business unit to facilitate the maintenance of electric vehicles and profit from services related to sustainable mobility. The company will offer the Free2move Charge platform, providing access to a wide network of charging points across Europe. Stellantis is evaluating Tesla’s charging standard and plans significant investments to expand its charging network and offer additional services to customers.
Harley-Davidson (NYSE:HOG) – Harley-Davidson announced the appointment of Jonathan Root as its new Chief Financial Officer, succeeding Gina Goetter.
Spirit AeroSystems (NYSE:SPR) – Spirit AeroSystems and its machinists’ union have reached an interim contract agreement, ending a strike at its Wichita, Kansas, plant. The four-year contract includes salary increases, annual bonuses and cost-of-living adjustments. Workers will return to work if the contract is approved.
Embraer (NYSE:ERJ) – Investors were disappointed by weaker-than-expected order numbers for Embraer at the Paris Airshow. However, analysts remain bullish on the company due to the post-pandemic recovery and the prospect of new business, including supply from China and interest in Embraer’s electric aircraft unit.
Ryanair (NASDAQ:RYAAY) – Ryanair predicts an increase of at least 50% in passenger numbers in Central and Eastern Europe (CEE) over the next ten years, targeting a less developed market also disputed by Wizz Air. The airline plans to use competitive fares, punctuality and route expansion to stand out. Ryanair hopes to avoid union disputes and strikes.
Delta Air Lines (NYSE:DAL) – Shares of Delta rose 3% on Tuesday, boosting a 14-month high, after the company raised its 2023 forecasts and showed confidence in its 2024 targets at an investor event. Delta highlighted pent-up demand for air travel, strengthening employment and the shift from goods to services as positive factors. The company has also updated its fleet plans to retire older aircraft and replace them with more efficient models with more premium seating.
United Airlines (NASDAQ:UAL) – United Airlines Chief Executive Scott Kirby has expressed frustration with the Federal Aviation Administration (FAA) over the cancellation of thousands of flights caused by storms. More than 150,000 United customers are estimated to have been affected. Storms and FAA outages resulted in significant delays on the US East Coast. The FAA reduced arrival and departure fees, leading to major delays and cancellations. The disruptions affected around 26,000 flights over the past weekend.
BHP Group (NYSE:BHP) – BHP Group is calling for Australia’s ban on nuclear power to be lifted as the country seeks to decarbonize its electricity system. The company believes that nuclear energy should be considered as part of the solution to a safe and reliable energy mix, complementing other renewable sources. Although Australia has had a ban in place since the 1990s, BHP produces uranium and sees potential in nuclear power.
Rio Tinto (NYSE:RIO) – The Rio Tinto Group will build a laboratory in Melbourne to experiment with clean energy technologies. The mining company plans to become a major producer of lithium and other metals for batteries. The laboratory will make it possible to test minerals in real applications, such as electric vehicle batteries, and will be operational from November. Rio has said it will not be a commercial battery maker, but is seeking acquisitions to boost its growth in the sector.
Manchester United (NYSE:MANU) – Manchester United have raised their full-year revenue and profit projections, driven by strong trade and matchday income, as they return to the UEFA Champions League. The club is in talks for a sale, with several bids received, but there have been no updates on the deal at this time. In the third quarter, the net loss was reduced significantly.
ACI Worldwide (NASDAQ:ACIW) – Nebraska payment processor ACI Worldwide was fined $25 million by the US Consumer Financial Protection Bureau for improperly processing more than $2 billion in unauthorized mortgage payment transactions. The incident affected nearly 500,000 homeowners. ACI Worldwide consented to the penalty, claiming that it took control of a newly acquired electronic payments platform which led to the error. The company claimed that consumers’ funds and data were safe.
UBS (NYSE:UBS) – According to Bloomberg News, UBS Group plans to cut more than half of Credit Suisse’s workforce starting next month as a result of the bank’s acquisition. Around 35,000 people, including bankers, traders and support staff in London, New York and parts of Asia, could be affected. Merging Swiss domestic businesses would result in up to 10,000 jobs cut.
Bank of America (NYSE:BAC) – Bank of America is expanding its national presence in the United States, opening consumer branches in Nebraska, Wisconsin, Alabama and Louisiana, closing in on rival JPMorgan Chase. This expansion is part of a four-year plan that includes nine markets. Over the past decade, BofA’s network has shrunk to 3,800 branches from 6,100, while its consumer deposits have nearly doubled to $1 trillion.
JPMorgan Chase (NYSE:JPM) – JPMorgan said on Tuesday that it remains cautious on the Chinese yuan despite its recent decline, and suggested that China’s central bank could intervene to prevent an acceleration of movement. The yuan rallied after stronger daily fixings, indicating a possible change in policy stance towards the currency’s weakness.
Jefferies Financial Group (NYSE:JEF) – Jefferies Financial Group beat expectations for second-quarter earnings, driven by solid performance in the capital markets business despite a slump in trading. The New York-based company faced challenges stemming from the regional banking crisis and other events, but reported positive results. In addition, Jefferies attracted new talent and strengthened partnerships, such as the merger with Sumitomo Mitsui Banking Corp, aimed at offering more loan resources.
Bed Bath & Beyond (NASDAQ:BBBY), Overstock.com (NASDAQ:OSTK) – A US bankruptcy judge has approved the purchase of Bed Bath & Beyond’s brand, intellectual property and e-commerce platform by Overstock.com for $21. 5 million. Bed Bath & Beyond filed for bankruptcy in April and is holding separate auctions for other assets. The company faces challenges from its creditors regarding a bankruptcy loan.
Costco (NASDAQ:COST) – Costco plans to take stricter measures regarding sharing membership cards. The bulk retailer will now require customers to provide a photo ID along with their membership card when using the self-service process.
Johnson & Johnson (NYSE:JNJ) – Johnson & Johnson’s proposed $8.9 billion settlement to settle thousands of talc-related lawsuits faces a hurdle as a bankruptcy judge decides whether the company’s LTL subsidiary can declare bankruptcy for the second time. The first attempt was scrapped in April. Arguments will be heard this week and a decision will be made in August.
Rite Aid (NYSE:RAD) – Rite Aid Corp. fell to a record low on Tuesday after concerns raised by reports of debt reorganizations. Analysts at Deutsche Bank predict a challenge for the company, which has a large amount of outstanding debt, and believe shareholders could be hurt. The company’s cash position is considered vulnerable, and the prospect of a return to positive cash flow is seen as unattainable. The company needs to face challenges in its core business and its acquisition of Elixir, while dealing with an adverse environment in the pharmaceutical sector.
Regeneron Pharmaceuticals (NASDAQ:REGN) – The FDA rejected Regeneron Pharmaceuticals’ application to approve a new, higher-dose version of the Eylea treatment for eye conditions. Shares of the company are down premarket, following an 8.7% drop on Tuesday.
Orange (NYSE:ORAN) – The planned merger between Orange and MasMovil in Spain faces objections from EU antitrust regulators, who have warned of possible reductions in competition and price increases. Operators may have to offer significant solutions to gain approval. The European Commission has expressed concerns about the reduction in the number of operators and the elimination of an innovative competitor in the Spanish market for telecom services. Orange will continue to defend the benefits of the settlement before the Commission.
AeroVironment (NASDAQ:AVAV) – Drone maker AeroVironment reported fourth-quarter revenue that beat analyst expectations. In addition, the company expects adjusted fiscal year earnings of between $2.30 and $2.60 per share on revenue of $630 million to $660 million, also beating forecasts. As a result, the stock was up 5.2% premarket.
AST SpaceMobile (NASDAQ:ASTS) – Shares of AST SpaceMobile are down 24.6% premarket at a price of $4.80 after announcing the start of a tender offer for 12 million shares of A.
Constellation Brands (NYSE:STZ) – Constellation Brands will report its fiscal first quarter results, and investors’ main concern is focused on the performance of Modelo Especial, which overtook Bud Light as the top-selling beer in the US. Analysts raised Constellation’s revenue estimates and consider the outlook positive, highlighting the growth of Modelo Especial.
Circor International Inc (NYSE:CIR) – Circor shares are up 7.8% premarket after Arcline Investment Management LP submitted a takeover offer of $57 per share in cash, beating the bid from KKR & Co. Arcline has set a deadline for Circor’s response.
Market view
Pinterest (NYSE:PINS) – Pinterest rose 3.7% in premarket Wednesday to hit $27.37 after shares of the social media platform received a rating update from “Equal Weight ” to “Overweight” in Wells Fargo, with the price target raised to $34 from $23.
Alibaba (NYSE:BABA) – Shares of Alibaba were downgraded by analysts at Bernstein to “Market Perform” from “Outperform” on Monday, citing “value trap” risk. Wall Street remains bullish on Alibaba due to the company’s plan to split, with an average “Buy” rating.