US index futures rose in premarket Thursday, a day highly anticipated by global investors due to the release of US inflation data.
By 6:43 AM, Dow Jones futures (DOWI:DJI) were up 164 points, or 0.47%. S&P 500 futures were up 0.49% and Nasdaq-100 futures were up 0.58%. The yield on the 10-year Treasury bill was at 4.005%.
On Thursday’s American economic agenda, investors will follow the consumer price index (CPI) at 8:30 am, in which analysts estimate an increase of 0.20% in July in the monthly comparison. On an annual basis, the expectation is for an increase of 3.30%. Also at the same time, monthly unemployment insurance claims will be released, which is projected at 230,000 new claims. At 1 pm, the government holds the 30-year Treasury auction.
In Europe, with a less busy economic schedule, investors are looking at corporate results, including German giant Siemens (XE:SIE), which posted profits below expectations. Meanwhile, drugmaker Novo Nordisk (NYSE:NVO) raised its outlook for this year on the back of increased sales in the first half.
In Asia, markets ended higher. Investors continue to await economic stimulus in China and are looking at Japan’s producer price index, which reflects ex-factory prices of goods. The Index registered a 0.1% increase in July in monthly terms, falling short of the consensus forecast for a 0.2% increase.
In commodities markets, West Texas Intermediate crude for September fell 0.27% to trade at $84.14 a barrel. Brent crude for October fell 0.16% near $87.41 a barrel. Iron ore futures traded in Dalian, China, fell 0.49% at $98.93 a tonne.
By Wednesday’s close, the Dow Jones was down 191.13 points, or 0.54%, to 35,123.36 points. The S&P 500 fell 31.67 points, or 0.70%, to 4,467.71 points. The Nasdaq Composite dropped 162.31 points, or 1.17%, to 13,722.02 points. Technology stocks took significant drops. In addition, there was a sense of caution among investors due to the imminent release of the US inflation index, known as the CPI, scheduled for today.
After the release of last week’s employment data (Payroll), both the market and economists seem to agree that the chances of ending the cycle of interest rate raises have increased. However, if the inflation data do not add to this outlook, there is a possibility that the market will start to again consider the likelihood of a further rate hike. Additionally, yields on US Treasury bonds rose following an auction by the US Treasury.
Ahead of Thursday’s corporate results, investors await reports from Alibaba Group (NYSE:BABA), Novo Nordisk (NYSE:NVO), Ralph Lauren (NYSE:RL), Bakkt (NYSE:BKKT), Yeti (NYSE:YETI), US Foods (NYSE:USFD), before the market opened. After the market closes, reports from Ionq (NYSE:IONQ), Zymeworks (NASDAQ:ZYME), Gevo (NASDAQ:GEVO), Sientra (NASDAQ:SIEN), among others, are expected.
Wall Street Corporate Highlights for Today
Palantir Technologies (NYSE:PLTR) – Palantir stock, after strong performance in AI and early August, faces a sharp drop that could continue. The shares fell 11% to $15.25 on Wednesday, below their 50-day moving average, breaking trends and technical supports. Despite announcing solid gains, the slowdown in growth and outlook revisions led to the drop. The next support is at $15, followed by $14 and possibly its 200-day moving average at $10.
Nvidia (NASDAQ:NVDA) – Shares in Nvidia, known for its AI expertise, faced a decline on Wednesday after peaking in July. While recent announcements about advances in AI chips have not buoyed the stock, similar history shows average recoveries of 18% over the subsequent three months. Concerns may be eased by Nvidia’s earnings expected in two weeks.
WeWork (NYSE:WE) – WeWork stock dropped to zero on Wednesday after the company warned of the possibility of bankruptcy, marking a stunning turnaround for a company once valued at $47 billion. SoftBank-backed WeWork has been in turmoil since its 2019 IPO plans failed, due to heavy losses, governance issues and the management style of its former CEO, Adam Neumann. Despite a later IPO and cost cuts, the company struggled to be profitable. Its market value has dropped to around $260 million.
Yellow Corp (NASDAQ:YELL) – Bankrupt trucking company Yellow Corp opted not to seek court approval for a $142.5 million loan from Apollo Global Management (NYSE:APO). Instead, it will evaluate loan alternatives, including similar proposals from MFN Partners and Estes Express Lines. The company faces disputes with the International Brotherhood of Teamsters union and is looking to sell assets after bankruptcy. The final decision will be taken at the next hearing and aims to improve the financial situation, minimizing the unfavorable terms of Apollo’s offer.
Amyris (NASDAQ:AMRS) – Biotech company Amyris has filed for bankruptcy in the US, planning to sell its consumer brands to improve liquidity. It has secured a funding commitment of $190 million. Non-US entities are not included in bankruptcy. The restructuring aims to improve costs and focus on R&D after job cuts and the appointment of a new CEO.
Illumina (NASDAQ:ILMN) – Illumina lowered its full-year profit forecast due to a funding crunch among its biotech and pharmaceutical customers, impacting sales of its diagnostic and genetic testing tools. Rising interest rates have affected funding, especially in China, exacerbated by the collapse of the Silicon Valley bank. The company seeks to save costs and faces leadership issues and litigation with Carl Icahn.
Novo Nordisk (NYSE:NVO) – Novo Nordisk, the leading Danish pharmaceutical company, announced the acquisition of Inversago Pharma, a Canadian developer of obesity drugs, for up to $1.08 billion. The acquisition follows growing demand for its Ozempic and Wegovy drugs used to treat obesity. The transaction is expected to close in 2023.
Kenvue (NYSE:KVUE) – Kenvue will enter the S&P 500 following the completion of the exchange of Johnson & Johnson (NYSE:JNJ) shares for Kenvue, S&P Dow Jones Indices reported. The trade-in offer ends on August 18th. The addition to the index could encourage investor participation, benefiting J&J. Kenvue is the consumer health company publicly launched by J&J in May, known for brands such as Listerine and Tylenol. Kenvue was up nearly 1.93% in premarket trade.
Norfolk Southern (NYSE:NSC) – US rail regulators have said Norfolk Southern needs to significantly improve its safety culture after an accident in Ohio where a derailment released toxic chemicals. The Federal Railroad Administration (FRA) is also considering enforcement measures due to maintenance, inspection, and regulatory concerns. The FRA commended the positive changes, but noted a lack of priority in Norfolk Southern’s corrective actions. The CEO stated that the company will use the assessments to improve rail safety.
Delta Air Lines (NYSE:DAL), United Airlines (NASDAQ:UAL) – US regulators have temporarily extended cuts to minimum flight requirements at congested New York airports and Washington National Airport through Oct. 28, citing staff shortages of air traffic control. The FAA agreed to a request from Delta Air Lines and United Airlines to temporarily return up to 10% of slots and flights to resolve staffing issues. The resignation helped stability but is not expected after Oct. 28. Airlines are also urged to use larger planes to alleviate pressure on airspace.
Wheels Up Experience (NYSE:UP) – The Wheels Up Experience communicated substantial doubts about its continuity despite short-term funding from Delta Air Lines (NYSE:DAL), sending its stock plummeting. The company, which specializes in aircraft charter, underwent restructuring after the reduction in private jet traffic due to the recovery of commercial travel. Delta provided capital through a secured promissory note.
General Motors (NYSE:GM) – GM is struggling to ramp up production of electric vehicles, including the Cadillac Lyriq and BrightDrop vans, due to problems assembling battery modules. Chief Financial Officer Paul Jacobson revealed that GM produced just over 1,000 Lyriqs in July, below initial expectations. Despite this, the majority-owned Cruise autonomous vehicle operation is on the upswing, targeting $1 billion in revenue by 2025. Additionally, GM unveiled the 2025 Cadillac Escalade IQ, the electric version of its best-selling SUV. The Escalade IQ, priced at $130,000, has 450 miles of range, Super Cruise driver assistance technology and a new interior and exterior design. Production is scheduled to begin in the summer of 2024.
Texas Instruments (NASDAQ:TXN) – Analog chip company Texas Instruments plans to invest up to $1 billion in expanding its facilities in the Philippines, according to the country’s presidential office. The application for the expansion of the North Manila facility will be submitted shortly.
Telefonica (NYSE:TEF) – Spanish telecommunications operator Telefonica has partnered with Elon Musk’s Starlink satellite network to provide internet connectivity in rural areas. Through this agreement, Telefonica will be able to offer broadband via satellite in hard to reach places. The service will be extended to several countries, including Peru, Colombia, Chile, Brazil and Spain.
Verizon Communications (NYSE:VZ) – Verizon, the leading US telecommunications company, will raise prices on certain wireless plans to spur revenue growth following the post-pandemic slowdown. Mix and Match plans will increase by $3 to $5 per line, reflecting the value of the service. Changes will take effect from September.
Viasat (NASDAQ:VSAT) – Viasat announced that problems with its ViaSat-3 Americas communications satellite will delay the growth of its satellite fixed broadband services. An “anomaly” in the spacecraft’s antenna impacts performance. The company is investigating and taking corrective action. While first-quarter results beat estimates, the stock fell because of this issue. Growth in the fixed broadband business will be affected, but Viasat expects to continue to grow through fiscal 2025.
Avid Technology (NASDAQ:AVID) – Symphony Technology Group (STG), a private equity firm, has agreed to acquire Avid Technology, a maker of media editing software, for approximately $1.4 billion, including debt. Avid shareholders will receive $27.05 per share in cash, representing a 32% premium. The transaction is expected to close in the fourth quarter of 2023. STG is a private equity firm focused on technology investments, while Avid provides editing software and hardware to the entertainment industries.
Morgan Stanley (NYSE:MS) – James Gorman, CEO of Morgan Stanley, is sparking speculation about his succession as the bank faces an in-house betting race. With executives guessing their preference for the next leader, Gorman plans a frictionless succession in defiance of Wall Street norms. His goal is to avoid the usual tumultuous changes after a CEO transition. The final decision rests with the board, but according to Bloomberg, Gorman hopes to maintain cohesion and avoid internal dissension.
Moody’s (NYSE:MCO) – Moody’s Investors Service has indicated that Turkey’s credit rating could be upgraded if the orthodox and predictable policies adopted since the re-election of President Recep Tayyip Erdogan continue. The appointment of former Wall Street bankers to economic posts signals an intention to increase credibility and control inflation. While the recent moves have been well received, political and growth concerns still persist, which could affect the country’s economic trajectory.
Capri Holdings (NYSE:CPRI), Tapestry (NYSE:TPR) – Shares in Capri Holdings, owner of Michael Kors, rose premarket after Tapestry, rival brand Coach, announced an agreement to acquire global fashion group Lux. The possible announcement of the merger, which aims to strengthen competitiveness against LVMH and Kering, could take place soon, according to sources. Capri, which also owns Versace and Jimmy Choo, rescheduled its fiscal results for Thursday. Capri shares were up 32.2% in premarket trade.
Penn Entertainment (NASDAQ:PENN) – In February 2020, online casino and gambling operator Penn Entertainment acquired 36% of Barstool Sports for $161 million, later increasing to 100% for $388 million. However, Penn sold the sports and pop culture site back to founder Dave Portnoy for just $1, according to a regulatory filing. Penn walked away from Barstool for a deal with ESPN, predicting a non-cash loss of up to $850 million in the third quarter.
Earnings
Walt Disney (NYSE:DIS) – Disney beat earnings expectations at $1.03 EPS but faced challenges in revenue ($22.33 billion) and subscriber projections. Pricing plans and streaming expansions were also announced. Disney CEO Bob Iger admitted to the immediate challenges facing the entertainment company. Iger revealed progress in streaming, targeting profitability by 2024, although he acknowledged the need to improve film quality and address ESPN issues and Hollywood strikes. Despite that, he highlighted cost-cutting and an emphasis on creativity, driving a 1.5% rise in Thursday’s premarket stock.
Roblox (NYSE:RBLX) – Roblox missed its Q2 booking estimates due to falling demand for its games and increased competition, resulting in a nearly 20% drop in stocks in Wednesday’s regular trading session. The gaming industry faces a slowdown in spending, and Roblox plans to leverage operationally starting in 2024. With 65.5 million daily users, it’s aiming for 1 billion in the long term. Net bookings were $780.7 million, below estimate. The company also embraced advertising to generate revenue and invested in AI innovations.
Canopy Growth (NASDAQ:CGC) – Canadian marijuana grower Canopy Growth continues to grapple with first-quarter losses, raising concerns about its sustainability. The 2018 legalization of marijuana in Canada is off to a strong start, but illegal competition has taken a toll on the industry. The company has taken steps, such as job cuts and divesting businesses, to pursue profitability. Its revenue grew 3%, but it faces an SEC investigation into BioSteel. Canopy seeks to reduce costs and overcome challenges.
Kellogg (NYSE:K) – Kellogg projected that its Kellanova snacks division, which includes brands such as Pringles, Cheez-It and Pop-Tarts, will post annual sales of between $13.4 billion and $13.6 billion after division of the company into two units by the end of the year. Expected adjusted annual earnings for Kellanova are $3.55 to $3.65 per share. The separation aims to sharpen the focus on the snack and cereal businesses.
Carvana (NYSE:CVNA) – Used car retailer Carvana raised its third-quarter adjusted core earnings forecast to above $75 million. The company has sought to strengthen its balance sheet and cash flow by reducing inventory and advertising expenses. While popular during the pandemic, it has faced challenges due to rising used car prices. Recently, it reached an agreement to reduce its debt by more than US$ 1 billion.
Trade Desk (NASDAQ:TTD) – Trade Desk reported second-quarter adjusted earnings of 28 cents per share, beating estimates of 26 cents, and generated revenue of $464 million, also above forecasts. Despite that, shares of the internet advertising platform were down 3.5% in premarket Thursday.
Wynn Resorts (NASDAQ:WYNN) – Shares in casino operator Wynn Resorts rose 1.9% after second-quarter earnings and sales beat expectations. CEO Craig Billings stated that the post-Covid recovery in Macau had a significant pick up during the quarter. Wynn posted adjusted earnings of $0.91 per share, better than analysts’ estimates of $0.64 per share, and better than an adjusted loss of $0.82 per share in the year-ago quarter. Wynn’s revenue of $1.60 billion jumped 76% year-over-year and beat Wall Street estimates of $1.54 billion.
Sonos (NASDAQ:SONO) – Shares of Sonos rose 7.4% after reporting better-than-expected fiscal third-quarter revenue. The company also updated its revenue projections for the fiscal year, estimating a range between $1.64 billion and $1.66 billion, compared to the previous outlook of $1.625 billion to $1.675 billion.
Applovin (NASDAQ:APP) – Applovin, a software developer that uses artificial intelligence to drive customer sales, saw its (APP) stock rise 24.55% premarket after posting better-than-expected earnings. In the second quarter, it posted a profit of 22 cents a share, beating expectations of 8 cents, taking its shares to $36.63. The company predicts sales of between $780 million and $800 million in the third quarter, thanks to the success of its new AI-based advertising engine.
Plug Power (NASDAQ:PLUG) – Plug Power Inc. shares declined -10.5% in premarket Thursday after the alternative energy company reported larger-than-expected second-quarter losses. With a net loss of $236.4 million, or $0.40 per share, and net income of $260.2 million, the company plans to improve profitability in the second half of 2023 by focusing on costs.
Oddity Tech (NASDAQ:ODD) – Oddity Tech, a beauty products company that went public in July, reports solid growth in its first earnings report. For the second quarter, it had adjusted earnings per share of $0.56 and net income of $151.3 million. The company raised annual revenue and earnings forecasts based on the positive performance and plans to launch new products in 2024.