US index futures were higher in premarket trading on Thursday as investors reflected on the Federal Reserve minutes released yesterday, in which members did not rule out further tightening to curb inflation.
By 6:45 AM, Dow Jones futures (DOWI:DJI) were up 63 points, or 0.18%. S&P 500 futures were up 0.16% and Nasdaq-100 futures were up 0.15%. The 10-year Treasury yield was at 4.308%.
On Thursday’s American economic agenda, investors will follow, at 8:30 am, the release of unemployment insurance claims for the week, in which analysts expect 240,000 new claims. At the same time, the Philadelphia Fed industrial activity index will be released, which has an estimated retraction of 10 in August.
In the European bloc, there was a surplus in the trade balance in June, reaching 23 billion euros, surpassing the initial expectation of 18.3 billion euros. However, with a monthly drop of 0.5% in exports and 5.6% in imports, the bloc’s economy shows signs of slow recovery.
In Asian markets, there were mixed results after the announcement that the Fed is concerned about inflation in the US, suggesting the possibility of maintaining the upward trend in interest rates.
In Japan, the trade balance figures for July pointed to a deficit of 78.7 billion yen, contrary to expectations that forecast a surplus of 24.6 billion yen. The highlight is the annual reduction of 0.30% in exports and 13.5% in imports in the last month. These Japanese numbers reflect the challenges faced by China, considering that the country is one of Japan’s main trading partners, along with the US, the most robust economy globally.
In commodities markets, West Texas Intermediate crude for September was up 0.82% to trade at $80.03 a barrel. Brent crude for October was up 0.84% at $84.15 a barrel. Iron ore futures traded in Dalian, China, rose 4.34% to $104.67 a tonne, with the rally coming after recent losses caused by concerns over possible reductions in steel production and uncertainty in the Chinese real estate market.
By Wednesday’s close, US stock markets had another day of decline as investors weighed strong comments from Federal Reserve leaders at their latest meeting. The Dow fell 180.65 points or 0.52% to 34,765.74 points. The S&P 500 fell 33.53 points or 0.76% to close at 4,404.33 points, while the Nasdaq fell 156.42 points or 1.15% to 13,474.63 points.
Big tech companies such as Meta (NASDAQ:META), Amazon (NASDAQ:AMZN) and Tesla (NASDAQ:TSLA) have weighed as they are most affected by rising Treasury yields. The yield on the 10-year bond closed at close to 4.3%. Minneapolis Fed President Neel Kashkari pointed out that inflation is still “very high,” a view that is supported by other members, as indicated by the FOMC minutes. After those minutes, the chance of keeping interest rates at the next Fed meeting in September remained the same, around 90%. In Europe, the focus was on UK inflation, which was slightly higher than forecast. Meanwhile, in China, even with several incentive actions by the government, concerns persist.
Ahead of Thursday’s corporate results, traders are watching reports from Walmart (NYSE:WMT), Bili Bili (NASDAQ:BILI), Tapestry (NYSE:TPR), Lumentum Holdings (NASDAQ:LITE), Gambling (NASDAQ:GAMB), among others. After the close, results will be released from Applied Materials (NASDAQ:AMAT), Bill.com (NYSE:BILL), Farfetch (NYSE:FTCH), Ross (NASDAQ:ROST), and more.
Wall Street Corporate Highlights for Today
Alphabet (NASDAQ:GOOGL) – Alphabet’s Verily Life Sciences faces higher-than-forecast operating losses and plans further cost cuts. With losses of $568 million in 2022 and revenues of $559 million, the company has already reduced staff and products. The unit, part of Alphabet’s Other Bets, seeks to control spending and achieve profitability.
Paramount Global (NASDAQ:PARA) – Paramount Global has canceled the sale of a majority stake in BET Media Group, including VH1, BET and BET+. The decision, according to the Wall Street Journal, came after offers of US$ 2-3 billion did not significantly improve its balance sheet.
Sinclair Broadcast Group (NASDAQ:SBGI) – Sinclair is accused in a lawsuit of misappropriating $1.5 billion from its subsidiary Diamond Sports Group prior to its bankruptcy. Diamond, responsible for broadcasting games from major sports leagues, claims that Sinclair practiced a “nefarious strategy”. It is alleged that Sinclair saddled Diamond with debt and embezzled funds, leading to its decline. Sinclair denies the allegations.
Exor (EU:EXO), Philips (NYSE:PHG) – Exor acquired 15% of Philips healthcare group for $2.8 billion without the usual disclosures, using derivative agreements through Goldman Sachs (GS, GSGI34). The transaction, undisclosed under Dutch regulations, was viewed positively by Philips.
Goldman Sachs (NYSE:GS) – Options with expirations of less than 24 hours, known as 0DTE, intensified the slide in the S&P 500, sending it down 0.4% in 20 minutes, according to Goldman Sachs. Goldman’s Scott Rubner pointed out that market makers had to react quickly due to the frantic movement of these options. The growing popularity of these contracts may have magnified market swings. Rubner warns of deteriorating market liquidity, and rising volatility could discourage trend-driven investment strategies.
Nubank (NYSE:NU) – David Velez, co-founder of Nu Holdings Ltd., sold 3% of his stake in Nubank, raising $191 million. Proceeds will fund his foundation focused on education in Latin America. The sale follows the company’s positive quarterly results, whose shares have appreciated 88% this year.
Visa (NYSE:V) – Visa is under investigation by the US Department of Justice over alleged anti-competitive practices regarding its tokenization technology and retailer charges. This technology replaces account information with digital identifiers.
Tesla (NASDAQ:TSLA) – Texas has decided to require Tesla technology at electric vehicle charging stations to access federal funds, moving forward with Elon Musk’s plans to standardize the technology in the US. This decision will influence other states on adoption.
General Motors (NYSE:GM) – General Motors is leading a $60 million investment in startup Mitra Chem to develop more accessible battery chemistry. California-based Mitra Chem uses AI to create materials for lithium-ion batteries. The partnership will focus on active iron-based cathode materials for future GM batteries, seeking more sustainable and affordable alternatives. The new batteries may be used in GM vehicles in the second half of this decade.
Delta Air Lines (NYSE:DAL), American Airlines (NASDAQ:AAL) – Delta Air Lines and American Airlines will expand flights to China, capitalizing on growing demand in the Asia-Pacific region. This follows the US-China decision to double permitted flights. Delta will connect via China Eastern Airlines.
Walmart (NYSE:WMT) – Kathryn McLay, formerly CEO of Walmart’s Sam’s Club unit, has been promoted to lead the company’s $100 billion international business amid the economic downturn in China and global inflation. Succeeding Judith McKenna, who retires after 27 years, McLay will take over on September 11.
Amazon (NASDAQ:AMZN) – Amazon has introduced a 2% fee for sellers who do not use its logistics services, surprising many, especially with the impending US antitrust lawsuit against the company. This fee targets “Seller Fulfilled Prime” merchants. Many sellers interpret this as pressure to use Amazon logistics. This new tariff could significantly affect profit margins, forcing some to raise prices. Critics argue that Amazon wields too much power over its sellers, while the company says the fee helps cover operating costs.
Nike (NYSE:NKE), Adidas (USOTC:ADDYY) – In the final of the World Cup between England and Spain, Nike and Adidas bet on the demand for jerseys of the winning team. Months ago, both predicted production based on historical patterns and trends.
Tyson Foods (NYSE:TSN) – US-based food manufacturer Tyson Foods plans to sell its poultry segment in China. The company, which engaged Goldman Sachs (NYSE:GS) as a consultant, exceeded expectations by reporting annual sales of approximately $1.1 billion. Several multinationals have scaled back their operations in China, facing challenges such as slower economic growth and local competition. Tyson, active in China since 2001, covers the entire production chain, from creation to distribution.
Albertsons (NYSE:ACI), Kroger (NYSE:KR) – Officials in seven US states have requested that Kroger’s $24.6 billion acquisition of Albertsons, valued at $24.6 billion, be halted, citing concerns that it would consolidate nearly a quarter of the market for US food retail.
Ball Corp (NYSE:BALL) – British defense company BAE Systems has agreed to acquire Ball Corp’s aerospace assets for $5.55 billion. Ball Corp intends to use the proceeds to reduce debt and expand its global packaging operations. The transaction is expected to close in the first half of 2024. BAE expects this acquisition to boost its earnings per share and margins.
Hawaiian Electric Industries (NYSE:HE) – Hawaiian Electric shares declined nearly 14.5% in premarket trading on Thursday. The drop happened after an article in The Wall Street Journal informed that the company is talking with companies focused on restructuring. Now, down about 55% for the week, the stock is still reeling from Wall Street’s continuing concerns about the company’s possible responsibility for the tragic Maui fires.
Vinfast Auto (NASDAQ:VFS) – Shares of the Vietnamese maker of electric cars lost approximately 10.4% in pre-market Thursday. After an impressive rally of over 250% on Tuesday, when VinFast made its market debut through a deal with SPAC, there was a correction and the stock fell 18.7% on Wednesday.
ArcelorMittal (NYSE:MTCN), US Steel (NYSE:X) – World’s second-largest steelmaker ArcelorMittal is considering a bid for US Steel Corp after reducing its presence in the US in 2020. While under discussion, the offer has not is certain and would face competition from existing offerings in excess of $7 billion. The US Steel workers’ union favors Cleveland-Cliffs and expresses concerns about ArcelorMittal. ArcelorMittal’s decision challenges its previous strategy of focusing on emerging markets and reducing emissions.
Woodside Energy (LSE:WDS), Chevron (NYSE:CVX) – Woodside Energy and Chevron have reported no new updates on wage disputes at large LNG facilities in Australia. About 99% of offshore workers support union action, possibly leading to strikes. The Offshore Alliance denounced working conditions on the Woodside Angel Platform.
Manchester United (NYSE:MANU) – Manchester United Plc have denied deciding to reinstate Mason Greenwood to the first team following allegations in 2022. The Glazer family, who own the club, have launched an investigation following the allegations against Greenwood. The decision involves consultation with various stakeholders, including fans and sponsors. Fans protested Greenwood’s return, and while sponsors such as Chevrolet and Ecolab had no comment, DHL expressed confidence in the club’s management.
Earnings
Cisco Systems (NASDAQ:CSCO) – Shares in the computer networking company are up 2.8% in premarket Thursday after announcing fourth-quarter results that beat Wall Street forecasts. The company reported adjusted earnings of $1.14 per share, compared with the $1.06 forecast by analysts, according to Refinitiv. Revenue was $15.2 billion, beating the forecast of $15.05 billion.
Synopsys (NASDAQ:SNPS) – Shares rose 1.4% premarket after the automatic electronics design company exceeded fiscal third-quarter earnings forecasts. Synopsys reported adjusted earnings of $2.88 per share, beating analysts’ estimates by 14 cents, according to Refinitiv. Revenue, which hit $1.49 billion, also slightly beat projections. Additionally, on Wednesday, the California-based company named Sassine Ghazi as the new CEO and President, taking up the role on January 1.
Wolfspeed (NYSE:WOLF) – Shares fell 14.2% premarket after the release of Wolfspeed’s fiscal fourth quarter earnings report, which disappointed the market. The company reported an adjusted loss of 42 cents per share, versus analysts’ expectations for a loss of 20 cents per share. Despite that, Wolfspeed had revenue of $236 million, beating analysts’ projection of $223 million, according to Refinitiv data.
Amcor (NYSE:AMCR) – Shares were flat premarket after Amcor, which posted its lowest trading point in a year on Wednesday, reported adjusted earnings of 19 cents a share in its fiscal fourth quarter, beating analysts’ estimate of $0.18, according to FactSet. However, Amcor’s revenue was lower than expected, reaching US$ 3.67 billion, against the forecast of US$ 3.79 billion.
Aegon (NYSE:AEG) – Insurer Aegon reported a net loss of €199m at the end of June, attributing to market volatility in the UK and Netherlands and investments in the US. The solvency ratio dropped to 202%. Despite the losses, operating capital generation exceeded expectations, with growth of 42% in the Americas. The company has recently restructured, shedding business in Central Europe and focusing more on the US. Shares of Aegon were down 3.4% in premarket Thursday.
TJX (NYSE:TJX) – As of Wednesday morning, TJX Cos raised its 2024 outlook due to strong apparel sales and growing demand for home furnishings. Demand at discount retailers such as TJX has grown as inflation has cooled. Sales at Marmaxx and HomeGoods also saw an increase, benefiting from the bankruptcy of Bed Bath & Beyond and reduced freight costs. TJX posted net income of $989 million, or 85 cents per share, up from $810 million, or 69 cents per share, in the prior-year period.
JD.com (NASDAQ:JD) – JD.com beat second-quarter revenue expectations Wednesday morning, benefiting from its emphasis on cheaper products amid an economic slowdown. The company attracted more suppliers due to reduced costs and expanded its product range. While competing with rivals like Alibaba, JD.com has seen repeat customers. Revenue grew 7.6% in the second quarter to $39.7 billion.
Grupo Aval (NYSE:AVAL) – Grupo Aval, the Colombian financial conglomerate, posted a 75.4% drop in net income in the second quarter, despite a 70% increase in interest income. The decline was attributed to the appreciation of the Colombian peso and lower margins.