US Index Futures rose in premarket trading on Friday as traders eyed recent corporate earnings results and the Dow Jones on course to extend its bullish streak for a 10th straight session.
By 6:55 AM, Dow Jones (DOWI:DJI) futures were up 38 points, or 0.11%. S&P 500 futures were up 0.26%, while Nasdaq-100 futures were up 0.49%. The 10-year Treasury yield is at 3.843%.
European markets operate without a single direction, with an eye on quarterly results and elections in Spain.
In June, UK retail sales increased by 0.70% from the previous month, beating expectations of 0.20%. In the annual comparison, there was a drop of 1.0%, less than the estimated retraction of 1.5%. These weaker economic data indicate the possibility of a less restrictive monetary policy in the country and in Europe. Meanwhile, shares in Swedish steelmaker SSAB fell more than 1% due to a lower-than-expected second-quarter profit and warning of a slowdown in European steel demand in the third quarter.
On Friday’s American economic agenda, investors will follow the disclosure of the number of oil rigs by Baker Hughes at 1:00 pm.
In commodities markets, West Texas Intermediate crude for September is up 1.12% at $76.50 a barrel. Brent crude for September is up 1.12% near $80.53 a barrel. Iron ore futures traded in Dalian, China, fell 0.12% to $117.86 a tonne in a week marked by wide swings on weak data from China.
At Thursday’s close, the Dow closed up 163.97 points, or 0.47%, at 35,225.18 points. The S&P 500 fell 30.85 points, or 0.68%, to 4,354.87 points. The Nasdaq Composite dropped 294.71 points or 2.05% to 14,063.31 points. The weekly Unemployment Insurance data showed greater resilience in the job market and helped to raise expectations for further US rate hikes.
Ahead of Friday’s corporate results, traders are awaiting reports from American Express (NYSE:AXP), Schlumberger (NYSE:SLB), Huntington Bancshares (NASDAQ:HBAN), Roper Technologies (NASDAQ:ROP), AutoNation (NYSE:AN), Autoliv (NYSE:ALV), IPG (NYSE:IPG), among others.
Wall Street Corporate Highlights for Today
Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL), Meta (NASDAQ:META), Microsoft (NASDAQ:MSFT) – Leading artificial intelligence companies have agreed to comply with safeguards brokered by the Joe Biden administration. Commitments include security testing by independent experts, public reporting on vulnerabilities, and use of digital watermarking to detect deepfakes. Some experts call for tighter regulations, while the Senate plans to legislate AI regulation. The White House is looking at ways to ensure that AI products are safe before launch, while other countries are also looking at regulations to govern AI.
Apple (NASDAQ:AAPL) – Apple is late to the buy now, pay later (BNPL) shopping market, but is quickly gaining ground. Nearly 20% of users tried Apple Pay Later during the first three months, beating offers from more established competitors like PayPal (NASDAQ:PYPL) and Afterpay. Brand trust and ease of use are key factors that benefit Apple in this competitive industry.
Alphabet (NASDAQ:GOOGL) – YouTube, Google’s video streaming service, has raised prices on its premium plans in the US for the first time since 2018. The YouTube Premium plan is now priced at $13.99/month and $139.99/year. Older members get three months at the old price. YouTube Music has also increased to $10.99/month.
Microsoft (NASDAQ:MSFT) – Microsoft has faced a new antitrust complaint from German company alfaview over Teams, part of Office, and is under the radar of the European Commission. Alfaview claims the integration gives an unfair advantage, calling for a formal investigation. Microsoft has offered solutions, but regulators want more price cuts.
Amazon (NASDAQ:AMZN) – Soon, Whole Foods Market customers will be able to pay with just the palm of their hand, thanks to Amazon One payment technology. Amazon plans to expand this biometric solution to all of the grocery store’s 500+ locations by the end of 2023, offering ease and privacy for customers. The technology is already present in more than 200 stores and has aroused interest from other potential partners, such as Panera Bread and the Colorado Rockies stadium.
Taiwan Semiconductor Manufacturing (NYSE:TSM) – President Joe Biden faces a significant setback in his strategy to bring high-tech jobs to the U.S., as Taiwan Semiconductor Manufacturing has delayed production at its Arizona plant until 2025. The delay is cited due to a lack of skilled labor and costs in the U.S. The chipmaker is one of the main pieces of the Bidenomic push to revitalize semiconductor manufacturing in the country, but the delay could affect its political image in a key state in next year’s elections.
Tesla (NASDAQ:TSLA) – Detroit automakers and the United Auto Workers union will not alone negotiate terms for the transition to electric vehicles. Tesla and Toyota (TM) will also have hidden roles in the talks. Tesla’s profitability per vehicle outpaces that of traditional automakers, thanks to advantages in labor, distribution and technology costs. Competition with Tesla drives the search for “competitive” deals to transition to electric vehicles in the US.
Carvana (NYSE:CVNA) – Shares were down 0.7% in premarket trade on Friday. On Thursday, analysts at Piper Sandler downgraded the stock from “Overweight” to “Neutral,” followed by a downgrade from “Sector Perform” to “Underperform” by RBC Capital Markets. As a result, shares of the used car retailer fell 16% on Thursday.
Delta Air Lines (NYSE:DAL) – US Transportation Secretary Pete Buttigieg is investigating why Delta Air Lines passengers sat for hours on a plane on the Las Vegas in extreme heat. Delta is reviewing the incident and offering compensation to affected passengers.
Ryanair Holdings (NASDAQ:RYAAY) – Ryanair plans to base up to 30 new Boeing 737 MAX aircraft at major airports in Ukraine and carry more than five million passengers a year when the fighting eventually ends. The Irish airline plans to expand its operations to include Kiev, Lviv and Odesa airports, connecting them to more than 20 European capitals with 600 weekly flights. The company expects the 30 new Ukraine-based jets to be worth more than $3 billion. Ryanair has committed to resuming low-fare flights to Ukraine eight weeks after the reopening of Ukrainian airspace.
Sirius XM Holdings (NASDAQ:SIRI) – Shares in Sirius XM Holdings were down 9% in premarket trading on Friday, after rising 42% on Thursday, driven by an apparent combination of short coverage, the unfolding of a spread trade involving Liberty SiriusXM and a potential buy related to a Nasdaq 100 index rebalancing.
Arista Networks (NYSE:ANET) – Exane BNP Paribas analyst Karl Ackerman began coverage of Arista stock with a “Buy” rating and a price target of $210, indicating a 19% upside potential. He sees the company benefiting from increasing investments in AI by the cloud giants and projects solid sales growth through 2025.
Goldman Sachs (NYSE:GS) – Goldman Sachs has added senior executive Tom Montag to the board, seeking to reverse an ill-fated foray into retail banking. Montag, an ally of CEO David Solomon, will reinforce the bank’s refocusing on the core businesses of investment banking, trading and asset management.
JPMorgan Chase (NYSE:JPM) – A $1.4 billion fund from JPMorgan Asset Management is bullish on Asian chip stocks, expecting them to match US counterparts. Artificial intelligence growth in Asia could drive valuations through the second half of 2023. Asian companies are bouncing back in the AI race after Nvidia’s upbeat outlook. Korean vendors can benefit from potential DRAM shortages in 2024, while future earnings estimates for Asian semiconductors have increased significantly relative to those in the US.
Bain Capital (NYSE:BCSF) – Bain Capital has raised its offer to acquire SoftwareOne Holding AG by approximately CHF 3.2 billion ($3.72 billion), offering around CHF 20 per share, a premium of 43.6% over the last close. SoftwareOne’s board rejected an earlier offer from Bain last month. The Swiss company assists in the management of software purchases from large suppliers.
Nasdaq (NASDAQ:NDAQ) – The rebalancing of the Nasdaq 100 is adding complexity to stock trading with a number of options expiring on Friday. The index will undergo changes to reduce the dominance of technology megacapitals, impacting the market with an estimated US$ 60 billion in transactions.
Pfizer (NYSE:PFE) – A tornado damaged a Pfizer plant in Rocky Mount, NC, raising the threat of critical drug shortages. The facility is one of the largest producers of sterile injectable medications in the US. Experts warn that shortages of existing products could be made worse by damage. Pfizer is assessing the impact on production after the tornado. The full extent of impact will depend on the degree of damage to production lines.
Eli Lilly (NYSE:LLY) Novo Nordisk (NYSE:NVO) – Morgan Stanley (NYSE:MS) increased its annual weight loss drug sales forecast to $77 billion due to high demand driven by interest in social media. Analysts predict an expanding market, with emphasis on the injectable drug Wegovy, from Novo Nordisk, which also benefits diabetic patients. Pharmaceutical companies such as Eli Lilly and Novo Nordisk will be the main beneficiaries, while other companies are developing drugs to enter the market.
Lowe’s (NYSE:LOW), Home Depot (NYSE:HD) – Lowe’s is ramping up its same-day delivery strategy to compete with Home Depot. Going forward, all Lowe’s US customers will have access to the same day delivery option for orders placed before 2pm. This initiative is part of Lowe’s Total Home strategy to enhance its digital capabilities and become an omnichannel retailer. Home Depot has offered same-day delivery for five years and has expanded those capabilities by partnering with Walmart’s GoLocal.
Macy’s (NYSE:M) – Macy’s is revamping its private label brands to increase sales and improve margins. The “On 34th” collection is the first label under the new strategy. The company plans to upgrade all 24 existing private labels over the next 2 1/2 years. Shares are down 21% this year, reflecting concerns about sluggish earnings and margin growth.
AMC Entertainment (NYSE:AMC) – AMC has said it will not proceed with its controversial rollout of premium-priced seating in its theaters. The testing of the pricing plan, which charged more for better seats, will end soon and will not roll out across the country. The company plans instead to lure patrons to the theater’s front row by investing in more comfortable seats with recliners. The move was taken after some online outrage when the plans were announced. The stock is up 6.4% this year but has fallen 59% over the last 12 months.
Chewy (NYSE:CHWY) – Chewy announced Thursday that its chief financial officer, Mario Marte, has decided to retire effective July 28. As the specialty retailer looks for a permanent CFO, Chief Accounting Officer Stacy Bowman has been appointed as the interim CFO. Chewy shares are flat premarket after closing down 7.5% on Thursday.
Earnings
Intuitive Surgical (NASDAQ:ISRG) – Intuitive Surgical beat expectations for quarterly sales and earnings, but its stock declined as the base of da Vinci robotic surgery installed fell short of forecasts. The company increased its global installs by 12.5% to 8,042, but expectations were higher. Sales of instruments and disposable accessories had a strong growth of 20%. Sales advanced 15% overall to $1.76 billion, and adjusted earnings increased nearly 25% to $1.42 per share. However, Intuitive Surgical did not provide a perspective for the future.
CSX (NASDAQ:CSX) – Rail operator CSX reported second-quarter revenue of $3.69 billion, down 3% year-over-year and below Wall Street expectations. The company attributed the shortfall to lower fuel and coal prices. As a result, the stock is down 4.9% in premarket trading on Friday.
Knight-Swift Transportation (NYSE:KNX) – Knight-Swift Transportation announced a 21% drop in second-quarter revenue due to weaker demand in its trucking business. As a result, Knight-Swift shares were down 5.3% in premarket trade.
Newmont Corp (NYSE:NEM) – Newmont missed second-quarter earnings estimates due to reduced production and higher costs due to the strike at its Penasquito, Mexico mine and wildfires in Quebec. The company withdrew its annual forecast for the mine and expects cost improvements by the end of the year. Quarterly gold production fell 17.3% to 1.24 million ounces, and total forecast annual production is 5.7 million to 6.3 million ounces. Its total cost of holding gold increased nearly 23% to $1,472 per ounce for the quarter. Adjusted earnings per share were 33 cents, below analysts’ average estimate of 44 cents.
Abbott Laboratories (NYSE:ABT) – Abbott Laboratories beat quarterly earnings expectations as recovery in surgical procedure volumes boosted demand for medical devices. Adjusted earnings were $1.08 per share, above the average analyst estimate of $1.05. Abbott maintained its annual earnings per share forecast of between $4.30 and $4.50.
Kenvue (NYSE:KVUE) – Kenvue, Johnson & Johnson’s former consumer health unit, forecast full-year profit above Wall Street estimates, buoyed by resilient demand for skin care and self-care products such as Neutrogena and Tylenol. However, shares fell on Thursday after J&J announced a possible public offering to sell its stake. The company’s quarterly net sales increased 5.4%, but the adjusted gross profit margin declined due to factors including a strong dollar and higher labor and raw material costs.
Philip Morris International (NYSE:PM) – Philip Morris beat quarterly profit expectations, driven by rising demand for its smokeless products such as Zyn and IQOS, and falling tobacco and labor costs. The company raised its full-year earnings forecast, with second-quarter adjusted earnings per share hitting $1.60, beating analysts’ estimates. IQOS devices and Zyn nicotine pouches helped protect the company’s margins.
Capital One Financial (NYSE:COF) – Capital One reported second-quarter earnings that beat analyst estimates, driven by higher borrowing income due to rising benchmark lending rates. Net interest income increased 9% to $7.11 billion. Total deposits increased 12% to $343.71 billion in the second quarter. The bank earned $3.52 per share on an adjusted basis, beating analyst expectations of $3.23 per share.
Blackstone (NYSE:BX) – Blackstone Inc reached the $1 trillion mark in alternative investment management assets but faced a 39% drop in distributable earnings in the second quarter. The company pursues growth opportunities in a variety of areas, including private credit and insurance, infrastructure, energy transition and wealth management. Blackstone is also establishing banking partnerships and expanding its products to retail and wealthy investors.
PPG Industries (NYSE:PPG) – PPG Industries reported second-quarter results that beat Wall Street estimates and raised its full-year profit forecast. However, management warned of continued “lukewarm” industrial production and falling home sales.
SAP (NYSE:SAP) – SAP reported second-quarter financial results that were below Wall Street estimates. Despite CEO Christian Klein emphasizing the potential of generative AI, revenue and adjusted profit were below consensus. SAP also slightly lowered its full-year cloud revenue forecast. The company is investing in generative AI software and has made investments in language model companies. US-listed SAP shares fell 6.3% to $133.93 on Thursday.
The Travelers (NYSE:TRV) – The Travelers posted a second-quarter loss of $14 million, or seven cents a share, down sharply from the $551 million in revenue, or $2.27 a share, posted in the year-ago quarter. This was mainly due to multiple and intense wind and hail storms in different states. In the second quarter, US$ 1.5 billion was disbursed in damages resulting from catastrophes, double the amount registered in the same period of the previous year (US$ 746 million).
Scholastic Corp (NASDAQ:SCHL) – Scholastic beat earnings per share expectations and announced a $100 million increase in its share repurchase program. Scholastic posted earnings per share of $2.26, above a FactSet analyst’s $1.70 forecast. However, revenue came in below expectations, coming in at $428.3 million, compared to analysts’ forecast of $541.8 million.