US Index Futures rose in premarket trading on Friday after last night’s earnings and on the lookout for indicators. European markets operate without a defined direction reflecting the most recent releases of GDPs in the region, and with an eye on the economic policy of the Bank of Japan.
By 7:08 AM, Dow Jones (DOWI:DJI) futures were up 74 points, or 0.21%. S&P 500 futures were up 0.42%, while Nasdaq-100 futures were up 0.82%. The 10-year Treasury yield was at 3.961%.
Germany’s second-quarter GDP was stable, frustrating the consensus that expected growth of 0.10%. In Spain and France, however, activity advanced, but brought mixed feelings. In the first, the high was 0.40%, but the expectation was higher, 0.60%. In the second, the expectation of 0.10% was surpassed, with an increase of 0.40% of GDP. Finally, consumer confidence in the euro zone remains negative at -15.10, in line with market expectations.
Over there, investors are still waiting for the release, at 8:00 am, of the German consumer price index. The market consensus projects a variation of 0.30% in the monthly data for July.
In Asia, the markets closed the trading session this Friday in a fall, reverberating from the decision of the Bank of Japan to maintain the economy’s basic interest at -0.10%. On the other hand, the BOJ made adjustments in the way it controls its forward yield curve, the so-called Yield Curve Control.
On Friday’s American economic agenda, investors will follow at 8:30 am the release of data on personal income and personal expenses for June, which have a consensus of 0.50% and 0.40%, in that order. In addition, investors will get to know the June inflation data, as well as the cost of labor. At 10:00 am, the Michigan consumer confidence for July will be released, which has a consensus of 72.6 points.
In commodities markets, West Texas Intermediate crude for September is down 0.32% at $79.83 a barrel. Brent crude for September is down -0.42% near $83.89 a barrel. Iron ore futures traded in Dalian, China, fell 2.68%, at US$ 116.52 per tonne, on doubts about new Chinese stimuli in the economy.
At Thursday’s close, the Dow Jones was down 237.40 points, or 0.67%, to 35,282.72 points, ending a 13-day winning streak. The S&P 500 fell 29.34 points, or 0.64%, to 4,537.41 points. The Nasdaq Composite dropped 77.17 points or 0.55% to 14,050.11 points. The American market had a day of losses after the Fed announced financial stabilization measures that generate greater restrictions on large banks. Earlier, the GDP data for the second quarter showed annual growth of 2.4%, above estimates of 1.8% growth. Virtually all components came in with stronger numbers than expected. However, it was private sector investment that led the rise. The stronger data revealed a greater chance that the Fed will have to raise interest rates again, if inflation does not help.
Treasury yields rose yesterday. Regarding the Fed’s decision, the measure brings greater capital requirements on the part of banks, especially among the large ones. This generated some criticism among Wall Street bankers, since, according to them, there was no need for such a restrictive capital requirement. Finally, in Europe, the ECB raised interest rates by 0.25 pp, in line with forecasts, but signaled that it might rise again in the next meetings. Meanwhile, the Nasdaq 100 index performed slightly better, following a positive result released by Meta.
Ahead of Friday’s corporate results, traders await reports from Exxon Mobil (NYSE:XOM), Chevron (NYSE:CVX), AstraZeneca (NASDAQ:AZN), Procter & Gamble (NYSE:PG), Colgate-Palmolive (NYSE:CL), Charter Communications (NASDAQ:CHTR), Centene (NYSE:CNC), Newell Brands (NASDAQ:NWL), among others.
Wall Street Corporate Highlights for Today
Meta Platforms (NASDAQ:META) – Meta Platforms executives focus on Threads retention after losing more than half of users. Zuckerberg highlights growing retention, seeks to add features and invest in the metaverse to compete with Apple (NASDAQ:AAPL), Google (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT). The artificial intelligence model called Llama 2 has received more than 150,000 download requests in the week since its launch. The Reels Meta app has been growing rapidly in both users and advertisers, catching up with TikTok in daily video views. The annual revenue rate reached US$10 billion. While Reels attracts advertisers with ease of use, TikTok leads in time spent per user.
Microsoft (NASDAQ:MSFT) – The European Union has launched an antitrust investigation against Microsoft over its bundling of Teams with Office, risking a hefty fine. The company has accumulated 2.2 billion euros in antitrust fines previously. The European Commission accuses Microsoft of abusing and restricting competition in the market for communication and collaboration products. Microsoft must cooperate to find solutions to the Commission’s concerns.
Advanced Micro Devices (NASDAQ:AMD) – Advanced Micro Devices has announced an investment of around US$400 million in India over the next five years to build its largest design center in Bengaluru. The new 500,000 square foot campus will create 3,000 new engineering roles, bolstering the Indian chip industry.
American Airlines (NASDAQ:AAL) – The American Airlines pilots union has reached an agreement in principle with the airline on improvements to a new employment contract, aligning with earnings for United Airlines pilots (NASDAQ:UAL). The deal needs board approval and will be voted on in August.
Toyota Motor (NYSE:TM) – Toyota has announced that it will sell about $1.80 billion of its stake in KDDI Corp to accelerate vehicle electrification. The automaker is seeking funds for its plans to develop future electric vehicles with greater autonomy and cost reduction. The sale will reduce Toyota’s stake in KDDI from 14.68% to 11.71%, ending a longstanding partnership.
General Motors (NYSE:GM) – GM has warned that changes to vehicle emissions rules proposed by the Biden administration could lead to hundreds of billions of dollars in fines for the auto industry by 2031. The Biden administration disputed that estimate, stating that it is pure speculation and inaccurate. The National Highway Traffic Safety Administration will release its proposal to increase Corporate Average Fuel Economy (CAFE) requirements on Friday. GM said it intends to increase technical dialogue with the EPA and the White House to resolve compliance issues.
TotalEnergies (NYSE:TTE) – TotalEnergies does not believe it overpaid for seabed leasing in Germany, despite criticism from the industry. CEO Patrick Pouyanne said they are in line with their goals and confident in electricity prices in Germany by 2030. The company won the bid along with BP (NYSE:BP), while Orsted withdrew due to price concerns. The initial amount paid was 582 million euros.
First Solar (NASDAQ:FSLR) – First Solar plans to invest up to $1.1 billion in a new U.S. factory, driven by the Biden Inflation Reduction Act. The plant will produce 3.5 gigawatts of solar power per year starting in 2026. With tax breaks, the company has committed $2.8 billion to expand production in the country, reaching 14 gigawatts annually in the US and 25 gigawatts globally. President Biden hailed the investment as a boost to domestic manufacturing and building domestic supply chains.
Tupperware (NYSE:TUP) – Shares in Tupperware, a maker of home and kitchen products, have seen surprising and unexplained gains, rising more than 50% and nearly 350% in the past five days. This comes despite recent concerns about its business, including poor sales and misstatements in past financial reports. The stock is still down about 28% year-to-date.
Walgreens Boots Alliance (NASDAQ:WBA) – Walgreens Chief Financial Officer James Kehoe will step down in mid-August to pursue opportunities in the technology sector. The company has named Manmohan Mahajan as interim head of global finance as it seeks to fill the role. Walgreens has been looking to expand beyond its core business with acquisitions of health services companies. To regain market share lost during the pandemic, the company plans to close the wage gap and increase automation in call centers by the end of fiscal 2023.
GameStop (NYSE:GME) – GameStop CFO Diana Saadeh-Jajeh will resign on Aug. 11, resulting in the second major departure in two months. Shares are down -0.5% premarket. The company has struggled to implement Chief Executive Ryan Cohen’s vision of becoming a leader in e-commerce for video games and related products. Since the peak of meme stocks in 2021, the company’s stock has dropped about 82%.
AMC Entertainment (NYSE:AMC) – A federal lawsuit accuses AMC of illegally sharing customer information with Facebook (NASDAQ:META) whenever customers purchase tickets on the AMC website. The lawsuit alleges violation of the Video Privacy Protection Act.
Overstock (NASDAQ:OSTK) – Shares in Overstock.com rose 1.9% in premarket trading on Friday after reporting a smaller-than-expected loss and positive indications on the move to the Bed Bath & Beyond brand. CEO Jonathan Johnson expects long-term growth with the acquisition and rebranding of the company, already successful in Canada.
UBS Group (NYSE:UBS) – UBS reorganized its equity leadership in Singapore following the acquisition of Credit Suisse. Senior banker Jacky Ang will leave to pursue other interests, and Alain Bernasconi will take over as manager of the Singapore branch, subject to regulatory approvals. The restructuring accompanies the administrative changes resulting from the mega merger in Asia. Dominique Boer will now oversee Credit Suisse’s wealth management business in the city-state. David Leung will take over as Senior Corporate Director at another entity in Singapore.
Bank of America (NYSE:BAC) – Brian Moynihan, CEO of Bank of America, warned of careful implementation of new Basel III capital requirements to prevent US banks from losing global competitiveness. He stressed the importance of leveling the playing field for smaller banks. Bank of America expects a “mild” recession next year and predicts the first interest rate cut will come in mid-2024. In other news, Bank of America warns of frenzy in artificial intelligence (AI) stocks, calling it a “baby bubble”. Strategists recommend assets such as emerging markets and commodities for summer bets, while they point to technology and credit as “fall negative games”.
Citigroup (NYSE:C) – Citigroup has informed UK employees that it will monitor office attendance to assess the effectiveness of the hybrid working policy. Data will be used for disciplinary actions against consistent absences, from bonus adjustments to terminations. Most of the bank’s approximately 240,000 employees are considered hybrids, but Wall Street has taken a stricter approach to remote work. Monitoring will begin in August.
Dime Community Bancshares (NASDAQ:DCOM) – Stuart Lubow has been named to succeed Kevin O’Connor at the helm of Dime Community Bancshares, a banking company in Hauppauge, New York. O’Connor, CEO since the 2021 merger with Bridge Bancorp, will step down on August 31. Lubow, current president and COO, will take over as CEO on the same date, and will also join the board. O’Connor will remain as director until the end of the year.
Unilever (NYSE:UL) – Unilever has announced the appointment of Ian Meakins as its designated President, succeeding Nils Andersen. Meakins will take up the role on December 1, bringing successful experience in a variety of executive and non-executive roles at a variety of companies, including Diageo (NYSE:DEO), Bain & Company and Procter & Gamble (NYSE:PG). Andersen will leave the board in May 2024.
McDonald’s (NYSE:MCD), Domino’s (NYSE:DPZ), Chipotle (NYSE:CMG) – Major U.S. restaurant chains saw profit margins driven by lower costs for ingredients like chicken, cheese and avocado. Wholesale prices have dropped in recent months, allowing fast-food chains to consider lowering menu prices later this year.
Earnings
AstraZeneca (NASDAQ:AZN) – AstraZeneca posted better-than-expected Q2 earnings and sales, driven by performance in cancer drugs, despite declining sales of Covid-19 vaccines. The drugmaker reported adjusted earnings of $2.15 per share, up 25%, on revenue of $11.4 billion, up 6%. Analysts had expected EPS of $1.98 on revenue of $10.97 billion. Shares were up 4.5% in premarket trading on Friday. The company anticipates growth in China and plans to file data with the US regulator for its experimental drug. The Alexion unit has acquired a Pfizer (NYSE:PFE) gene therapy portfolio for up to $1 billion, plus royalties.
Sanofi (NASDAQ:SNY) – French drugmaker Sanofi has raised its full-year profit forecast, boosted by sales of Dupixent treatment and new drug launches. The outlook includes expected one-time revenues from Covid-19 vaccines in the second half. Dupixent drug revenue increased by 34%. Sanofi posted second-quarter earnings of $1.56 billion, or 63 cents a share. Revenue of $10.85 billion missed forecasts of $11.47 billion.
Intel (NASDAQ:INTC) – Shares of Intel are up 6.9% in premarket trading on Friday, boosted by investor celebrations at the return to profitability and bullish outlook. Intel forecast third-quarter adjusted earnings of 20 cents a share, beating Refinitiv’s estimates of 16 cents a share. Intel posted EPS of 13 cents on revenue of 12.9 billion in the second quarter. Analysts had expected a loss of 3 cents on revenue of 12.13 billion.
Harley-Davidson (NYSE:HOG) – Harley-Davidson saw an 18% drop in second-quarter profit, below Wall Street expectations, due to slowing demand in North America. The company revised its annual revenue target and forecast steady sales growth. Stocks are stable in premarket trading. Production was temporarily halted due to a lack of parts. Chief Executive Jochen Zeitz cited tighter consumer credit and price increases as factors impacting demand. Net income fell to $178 million, or $1.22 a share, missing analysts’ forecasts of $1.25 a share. Motorcycle and related product revenue reached $1.2 billion, down 4% year-over-year.
Ford Motor (NYSE:F) – Ford posted a premarket decline of 2% although it raised its full-year forecast and beat second-quarter expectations. The company reported adjusted earnings of 72 cents per share on $42.43 billion in revenue, beating Refinitiv analysts’ estimates of 55 cents per share and $40.38 billion in revenue. Ford Chief Executive Jim Farley outlined a significant shift in the automaker’s product strategy, focusing on gas-electric hybrids and high-margin Ford Pro commercial vehicles.
Enphase Energy (NASDAQ:ENPH) – Enphase shares were down 14.3% in premarket Friday after the mixed financial report. The company reported adjusted earnings of $1.47 per share, beating Refinitiv analysts’ estimates of $1.25 per share. However, revenue of $711 million was short of the consensus estimate by $11 million.
First Solar (NASDAQ:FSLR) – Shares in the solar energy company rose 9.0% in premarket trading on Friday after beating Wall Street expectations for the second quarter. First Solar reported earnings of $1.59 per share and revenue of $811 million, beating forecasts by Refinitiv analysts, who had expected a gain of 96 cents per share on revenue of $721 million.
T-Mobile (NASDAQ:TMUS) – Shares were down 0.5% premarket due to a mixed second-quarter earnings report. T-Mobile posted earnings of $1.86 per share, beating the analysts’ consensus estimate of $1.69, according to Refinitiv. However, revenue was below expectations, with T-Mobile reporting $19.2 billion while Wall Street forecast $19.31 billion.
Roku (NASDAQ:ROKU) – Shares of the streamer were up 9.2% premarket after surprising quarterly report. The company lost 76 cents a share for the second quarter, less than the consensus estimate of $1.26 by Refinitiv. Roku’s revenue also beat expectations, totaling $847 million against the forecast of $775 million.
Dexcom (NASDAQ:DXCM) – Shares in the medical device company rose 3.3% in premarket trading on Friday after delivering better-than-expected quarterly earnings and future prospects on Wall Street. The company reported earnings of 34 cents per share, excluding items, on revenue of $871.3 million. Analysts polled by FactSet were expecting 23 cents a share and revenue of $841.2 million. Dexcom raised its full-year revenue forecast to a range of $3.5 billion to $3.55 billion, while the average analyst estimate was $3.5 billion.
Boston Beer (NYSE:SAM) – Stocks were flat premarket after the spirits company reaffirmed its full-year outlook and delivered a robust quarterly report. Boston Beer posted earnings of $4.72 per share and revenue of $603 million, beating analysts polled by Refinitiv who were expecting $3.43 per share and $593 million in revenue.
Mastercard (NYSE:MA) – Mastercard posted better-than-expected second-quarter earnings, buoyed by robust spending that brought the payments company back to growth after a lukewarm start to the year. Customers returned to spending on travel and entertainment, even as interest rates rose. Adjusted profit was $2.7 billion, up 10% year-over-year. Earnings per share of $2.89 also beat estimates. Gross dollar volumes increased 12% to $2.3 trillion, while international volumes increased 24%. Net revenue grew 14% to $6.3 billion.
Mondelez International (NASDAQ:MDLZ) – Mondelez International has raised its full-year growth forecasts after strong demand for its snacks and chocolates despite price increases. The company reported revenue growth in all regions, highlighting its strong performance in China. However, it faced volume declines in Europe as it closed price talks with retailers. Mondelez now expects adjusted earnings per share growth of more than 12% for the full year. It also sold its stake in Keurig Dr Pepper (NASDAQ:KDP) for $704 million. In the second quarter EPS was $0.76, $0.07 better than the analyst estimate of $0.69. Revenue for the quarter came in at $8.5 billion, versus the consensus estimate of $8.22 billion.
Southwest Airlines (NYSE:LUV) – The outlook for the current quarter and full year disappointed investors, raising concerns about domestic travel demand. Revenue per available seat mile (RASM) is expected to decline as much as 7% in the September quarter. The company is facing ever-changing travel patterns and plans to adjust flight frequency to adapt to the changes. Second-quarter adjusted earnings were $1.09 per share, below analysts’ estimates of $1.10.
Sweetgreen (NYSE:SG) – The salad restaurant chain was down 10.7% in premarket trading on Friday after missing second-quarter revenue expectations. The company reported revenue of $153 million, while analysts polled by Refinitiv had forecast $157 million.
S&P Global (NYSE:SPGI) – S&P Global missed second-quarter earnings estimates due to weakness in its index and commodity insights units, despite gains in its market intelligence business. Market intelligence segment revenues increased 5%, driving total revenue to $3.1 billion. The company recently completed the divestment of its Engineering Solutions business to KKR (NYSE:KKR).
Teck Resources (NYSE:TECK) – Teck Resources is considering several proposals, including the partial sale of its coal business, after Glencore offered up to US$8.2 billion for the unit. The company is betting on its limited coking coal mines to ensure a better valuation. The company missed second-quarter profit estimates and lowered its full-year copper production outlook. Glencore’s offer initially to acquire all of Teck Resources was rejected, but they came back with an offer to buy just Teck’s coal business.
Live Nation (NYSE:LYV) – Shares in Live Nation were flat in premarket trading on Friday after beating estimates on net income of $331.3 million, or $1.02 per share, and revenue of US$ 5.63 billion. The company predicts “record” results for 2023, driven by more than 117 million tickets sold this year. Chief Executive Michael Rapino highlighted the strong growth of live music worldwide. Live Nation has also faced regulatory scrutiny, but analysts believe the risks have eased following efforts to increase transparency.
Centene (NYSE:CNC) – Centene posted profit in the last quarter, driven by significant growth in membership. Net income was $1.06 billion, or $1.92 per share, compared with a loss in the prior-year period. Revenue of $37.61 billion beat analysts’ expectations. Premiums and services revenue increased 3% to $34.84 billion. The proportion of health benefits increased to 87% due to strong growth in market membership.
Juniper Networks (NYSE:JNPR) – Shares of Juniper Networks were flat premarket after the company forecast revenue of approximately $1.385 million for the third quarter, with a possibility of variation of $50 million. The expectation is based on continued weakness in bookings, especially in the cloud segment and, to a lesser extent, service provider customers. Analysts expect revenue of around $1.48 billion.
Evotec (NASDAQ:EVO) – Evotec cut its annual forecast due to a cyberattack in the second quarter. Estimated revenue for 2023 has been reduced to €750m to €790m, and adjusted earnings before interest, tax, depreciation and amortization has been downgraded to €60m to €80m. The attack impacted productivity in the second quarter, but the company maintains its 2025 Action Plan with expected revenue above €1 billion and adjusted Ebitda of over €300 million. The costs related to the cyberattack were around €25 million.
NatWest Group (NYSE:NWG) – NatWest Group reported better-than-expectations pre-tax earnings for the second quarter of 2023 and lowered its net interest margin guidance for the full year. The bank also released an independent review of the closure of Nigel Farage’s account at Coutts, its private bank. The review will be conducted by the law firm of Travers Smith and will examine the circumstances of the account closures in question. NatWest shares were up 2.9% in premarket trading on Friday.
Sleep Number (NASDAQ:SNBR) – Shares in SNBR plunged 26.9% in premarket trading on Friday after second-quarter sales fell 16% to hit $459 million, below the consensus forecast of $471 million. The bedding and mattress company forecast earnings of $1.25 to $1.75 per share in 2023, assuming a single-digit sales drop from the prior year.