US Index Futures operate slightly lower in the first trading session of the week, after weaker inflation data in China raise doubts about the slowdown of the second largest economy in the world.
By 6:50 AM, Dow Jones Futures (DOWI:DJI) were down 2 points, or 0.01%. S&P 500 futures were down 0.017%, while Nasdaq-100 futures were down 0.33%. The 10-year Treasury yield is at 4.058%.
On Monday’s US economic agenda, Fed Supervisory Vice-Chairman Michael Barr will attend an event at 10:00 am. At 11:00 pm, it will be the turn of San Francisco Fed President Mary Daly and Cleveland Fed President Loretta Mester. Atlanta Fed President Raphael Bostic will address the Cobb Chamber of Commerce at 11:00 am. On Wednesday, US inflation data for June will be released, as measured by the consumer price index.
Investors are also following the meeting of the North Atlantic Treaty Organization (NATO) this week, to be held in Lithuania, amid the possibility of discussing Ukraine’s entry into the bloc – something already ruled out by US President Joe Biden this Sunday.
Elsewhere, the Chinese producer price index fell 5.4% in June, the biggest drop since May. The consumer price index remained stable. Weaker data indicate a weakening of the Chinese economy, encouraging the government to intensify stimuli to boost sectors.
In commodities markets, West Texas Intermediate crude for August fell -0.76% at $73.30 a barrel. Brent crudes for September are down -0.69% near $77.93 a barrel. Iron ore futures traded in Dalian, China, fell 3.5% to $109.94, weighed down by weaker inflation data from the Asian giant.
At the end of Friday, stocks had a slight low day, in front of the Payroll employment data showing numbers below expectations. The Dow Jones fell 187.38 points or 0.55% to 33,734.88 points. The S&P 500 fell 12.64 points, or 0.29%, to 4,398.95 points. The Nasdaq fell 18.37 points or 0.13% to 13,660.72 points. Analysts predicted that 225,000 jobs would be created in June, but the official number was 209,000. Although it was not a very weak result to the point of indicating a recession in the American economy, it was enough to reduce the expectation that the Federal Reserve (Fed) would extend the cycle of increasing interest rates beyond expectations. Most still expect an increase in the next meeting, but the expectation for the next one was reduced to 24%. Chicago Fed President Austan Goolsbee said on Friday that he believes it is possible to control inflation without causing a recession. Future interest rates showed no clear trend, and the dollar weakened globally.
On Monday’s quarterly earnings front, Helen of Troy (NASDAQ:HELE), WD-40 (NASDAQ:WDFC), and PriceSmart (NASDAQ:PSMT) numbers are expected. The second-quarter US corporate earnings season kicks off this week, with PepsiCo (NASDAQ:PEP) and Delta Air Lines (NYSE:DAL) on Thursday, and major banks such as JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) presenting its financial numbers on Friday.
Wall Street Corporate Highlights for Today
TotalEnergies (NYSE:TTE) – A Republican victory in the US could disrupt hydrocarbon exports, causing a global energy shock, warns TotalEnergies CEO. Oil prices may stay high due to the energy transition and lower investments.
Vermilion Energy (NYSE:VET) – Vermilion Energy announced on Monday that it plans to initiate a share buyback program, with the aim of acquiring up to 10% of its shares over the course of one year. The Canadian company received approval to buy back up to 16.3 million shares on the Toronto Stock Exchange. The company expects to begin share buybacks on July 12.
Oneok (NYSE:OKE) – CEO Pierce Norton II purchased a large block of the company’s shares, which declined in 2023. Oneok’s plan to acquire Magellan Midstream Partners was not well received by investors, and the value of the transaction declined along with it with Oneok’s share price. Energy Income Partners also opposed the deal, preferring that Magellan remain autonomous.
Meta Platforms (NASDAQ:META) – The newly launched Meta Threads app has surpassed 100 million users since its launch. European Commissioner Thierry Breton criticized social media platforms such as Snap Inc (NYSE:SNAP) and TikTok for failing to adequately moderate harmful content during the recent riots in France. Breton said that starting in August, platforms will be sanctioned if they don’t remove illegal content properly. He also mentioned that Meta CEO Mark Zuckerberg has hired more moderators and highlighted the importance of ensuring the new Threads app complies with EU law. In other news, comedian Sarah Silverman and authors Richard Kadrey and Christopher Golden have filed copyright infringement lawsuits against Meta and OpenAI, claiming their copyrighted content was used without permission to train intelligence language models.
Boeing (NYSE:BA) – The US National Transportation Safety Board is investigating an engine fire on a Boeing 737-900 MAX aircraft operated by United Airlines (NASDAQ:UAL) at Newark Liberty International Airport. A fire warning indicator came on after landing, leading to the engine being disabled. Evidence of fuel leakage and damage was found on the engine cases. United and Boeing are collaborating on the investigation. The LEAP-1B engine was manufactured by CFM International, a joint venture of General Electric (NYSE:GE) and Safran (USOTC:SAFRY). In other news, private equity firm 777 Partners is in talks with Boeing and ATR for a new order for the jets, looking to expand its presence amid the surge in air travel. 777 Partners has now finalized orders for 60 aircraft and is exploring additional opportunities with ATR.
General Motors (NYSE:GM) – General Motors has cut the starting price of the Cadillac Lyriq by nearly 14% in China, following in Volkswagen’s footsteps in a new round of electric vehicle price cuts. Fierce competition and growth in the Chinese market have driven these reductions as global automakers look to maintain profitability and boost sales.
Tesla (NASDAQ:TSLA) – French Finance Minister Bruno Le Maire has expressed optimism that Tesla CEO Elon Musk will choose France for a significant investment in electric vehicle production in Europe. Le Maire said that several options are being considered and that Musk knows he would be welcome in the country.
Rivian (NASDAQ:RIVN) – Shares in Rivian Automotive rose more than 14% on Friday for an eighth consecutive day of gains on better-than-expected quarterly deliveries. The company delivered 12,640 vehicles in the second quarter, beating estimates. Several analysts raised their price targets for Rivian shares, further boosting its performance in the market.
Fisker (NYSE:FSR) – Fisker missed its Q2 production target due to component shortages. The company produced 1,022 units of its Ocean SUV, down from a planned 1,400-1,700, due to challenges faced by suppliers. Tesla and Rivian beat market expectations for deliveries in the same period.
Uber (NYSE:UBER) – Shares of Uber Technologies are up 74% in 2023, prompting CEO Dara Khosrowshahi to sell shares in the company. He sold 100,000 shares in June for a total of $4.5 million. The transactions were made through a pre-arranged plan and do not necessarily indicate that he believes the stock has peaked. Khosrowshahi has also made stock purchases in the past.
Icahn Enterprises (NASDAQ:IEP) – According to the Wall Street Journal, Carl Icahn has finalized deals with banks to delink his personal loans from the Icahn Enterprises stock price, increase collateral and establish a plan to pay off the loans within three years. Shares of the company were up 4.8% in premarket trade on Monday.
Blackrock (NYSE:BLK) – Republican Attorneys General questioned independence of BlackRock mutual fund directors on ESG matters, in a letter dated July 6. Concerns about financial relationships and representation of shareholder interests were raised.
SVB Financial Group (NASDAQ:SIVB) – SVB Financial Group sued the US FDIC to recover the $1.93 billion seized during its acquisition of failed Silicon Valley Bank. Lack of access to funds was hampering SVB Financial’s reorganization, and the FDIC claimed to have unidentified complaints against the company.
KKR (NYSE:KKR) – KKR is expanding its focus on China, investing in consumer sectors and avoiding technology sensitive sectors. The company has an active presence in the country, with offices in Beijing, Shanghai and Hong Kong. KKR Co-CEO Joseph Bae stresses the importance of exercising prudence in investing given the growing geopolitical complexity between China and the US.
Barclays (NYSE:BCS) – Jim Birchenough has joined Barclays as President of Global Health Investment Bank from Wells Fargo (NYSE:WFC). He will lead the biopharmaceutical investment banking unit alongside Alexis de Rosnay. The hiring strengthens the Barclays health unit, which has suffered with the departure of other executives.
Goldman Sachs (NYSE:GS) – India is on track to become the second largest global economy by 2075, surpassing Japan, Germany and even the US, according to Goldman Sachs. Progress in innovation and technology, capital investment and rising labor productivity are driving this forecast. The Indian government is focused on building infrastructure and encouraging the private sector to create jobs. The country is also standing out in the technology industry, with a forecast of significant growth in the sector’s revenue. However, challenges remain, such as increasing labor force participation and improving export performance.
Ball Corp (NYSE:BALL) – Blackstone (NYSE:BX) and Veritas Capital are competing with defense companies such as BAE Systems, General Dynamics and Textron (NYSE:TXT) to acquire Ball Corp’s aerospace business. The deal could be worth more than $5 billion. Ball is considering options for the aerospace unit, looking to focus on its beverage packaging operations. The sale could result in a heavy tax burden for Ball.
TPG (NASDAQ:TPG) – TPG is acquiring Forcepoint’s government cybersecurity unit for $2.45 billion from Francisco Partners, according to Wall Street Journal sources. Francisco will retain a minority stake in the unit, while Forcepoint will focus on its commercial cybersecurity business.
Alibaba (NYSE:BABA) – Shares of Alibaba Group and Tencent rose in Hong Kong after the $984 million fine imposed on Ant Group. The penalty was seen as a sign of an end to regulatory crackdowns on China’s technology sector. Alibaba announced a share buyback of Ant Group worth up to $6 billion, providing investors with liquidity. The decision to cancel Ant Group’s 2020 IPO triggered a wide crackdown by Chinese authorities.
Bed Bath & Beyond (NASDAQ:BBBY) – Bed Bath & Beyond has ended its efforts to find a buyer for the entire Buy Buy Baby business and will seek US court approval to sell only the brand’s intellectual property. Dream on Me offered $15.5 million for the intellectual property of Buy Buy Baby. Bed Bath & Beyond will seek approval for the sale at a hearing on July 11. The company also sold its own intellectual property to Overstock.com for $21.5 million.
McDonald’s (NYSE:MCD) – McDonald’s restaurants in India have removed tomatoes from their burgers and wraps due to supply shortages and quality concerns as prices hit record highs. The problem is attributed to a poor production season, with monsoon rains disrupting transport and distribution. Some customers are opting for alternatives such as tomato paste.
Taiwan Semiconductor Manufacturing (NYSE:TSM) – TSMC reported better-than-expected sales in the second quarter, driven by rising demand for artificial intelligence chips. Although revenue was down 10% year-on-year, the decline was less than feared. Goldman Sachs analysts raised the company’s price target, highlighting its strong position in the AI market.
Nanobiotix (NASDAQ:NBTX) – Shares in Nanobiotix SA rose 53.3% in premarket trade on Monday following the announcement of a licensing and co-development deal with Janssen Pharmaceutica NV. The agreement involves an investment of up to US$60 million in cash and up to US$1.8 billion related to development and regulatory frameworks. The news boosted Nanobiotix shares, which had already seen a significant rise in May. Year-to-date, Nanobiotix shares rose 41.1%, outperforming the iShares Biotechnology fund and the S&P 500 index.
Biogen (NASDAQ:BIIB) – Medicare will cover treatment for Alzheimer’s Leqembi, allowing greater access for patients. Leqembi is the only drug proven to slow cognitive decline. Medicare will pay most, but patients will face costs. Specific requirements must be met to qualify for coverage. Treatment has significant benefits and risks.
First Solar (NASDAQ:FSLR) – First Solar rose 3.3% on Friday after the solar energy company said it entered into a five-year revolving credit and $1 billion guarantee.