US index futures are higher in premarket trading on Monday, amid the start of the last trading week in August with a quieter global schedule.
By 6:50 AM, Dow Jones (DOWI:DJI) futures were up 77 points, or 0.22%. S&P 500 futures were up 0.15% and Nasdaq-100 futures were up 0.25%. The 10-year Treasury yield was at 4.233%.
On Monday’s US economic agenda, investors await, at 10:30 am, the Dallas Fed’s industrial activity index for August, in which the consensus expects a retraction of 21.6 points. At 1 pm, the government will announce two Treasury auctions, one with a two-year maturity and another with a five-year maturity.
In Europe, activity should be subdued due to a UK holiday, with the London Stock Exchange closed.
Asian markets ended higher, following China’s decision to launch stimulus to strengthen the economy. On Sunday, the country said it would cut the tax on stock market transactions in half, seeking to bolster investor confidence in the Shanghai exchange, the world’s second-largest. Reports indicate that this tax break, which also applies to stocks in Shenzhen, is the first since 2008 and is already in effect.
In other Asian news, shares in Evergrande, a major Chinese homebuilder, resumed trading after a 17-month lull, falling 87%. The company recently requested court protection in the US to guard against potential lawsuits from international creditors seeking to collect on its debts.
In commodities markets, West Texas Intermediate crude for October was up 0.06% at $79.88 a barrel. Brent crude for October fell 0.17% near $84.33 a barrel. Iron ore futures traded in Dalian, China, rose 0.55% to trade at $112.84, with an eye on further stimulus in China.
At the close of Friday, US markets experienced a favorable day as investors interpreted Jerome Powell’s words in Jackson Hole. The Dow closed with a gain of 247.48 points or 0.73% at 34,346.90 points. The S&P 500 rose 29.40 points or 0.67% to 4,405.71 points, while the Nasdaq Composite closed up 126.67 points or 0.94% to 13,590.65 points.
The Federal Reserve Chairman emphasized that the fight against inflation is not yet resolved and is open to raising interest rates if indicators show an increase in inflation. However, Powell indicated that the Fed may keep rates as they are at the next September meeting, in line with market expectations. Despite this, volatile assets rose as Powell’s tone remained consistent with his previous statements.
Ahead of Monday’s corporate results, traders are watching reports from Nordic American Tankers (NYSE:NAT), BaoZun (NASDAQ:BZUN), among others. After the close, reports will be expected from Heico (NYSE:HEI), Afya (NASDAQ:AFYA), LifeVantage (NASDAQ:LFVN), Noah Holdings (NYSE:NOAH), and more.
Wall Street Corporate Highlights for Today
Apple (NASDAQ:AAPL) – Apple plans to revitalize the tablet market with a redesigned iPad Pro for next year amid declining tablet sales. The iPhone 15 and Apple Watch event is scheduled for September 12th. The company is also gearing up for the release of iOS 17. Last quarter, iPad sales slumped, facing competition from improved Macs and phones with bigger screens. A new Magic Keyboard for the iPad Pro is also in development.
Nvidia (NASDAQ:NVDA) – Nvidia’s profits may boost the Korean won, which recently declined due to economic challenges. With the growing demand for AI chips, suppliers like SK Hynix might benefit. Nvidia’s shares saw a 1% increase in pre-market trading on Monday. Despite a remarkable 215% growth in shares this year, the recent earnings report from the AI chip pioneer made the shares seem cheap. The forward price/earnings metric, which compares the current value of a stock to its expected earnings, typically over the next year, suggests that Nvidia’s shares are more attractively priced now than they were on January 5, even with the significant rise since then.
Jabil (NYSE:JBL) – Chinese automaker BYD (USOTC:BYDDY) has purchased Jabil Inc’s mobile electronics business in China for $2.2 billion, expanding its portfolio and customer base. BYD, initially focused on electronic components, has become a leader in electric vehicles and a supplier to Apple (NASDAQ:AAPL). The deal will potentially increase BYD Electronic’s share of supply to Apple. The form of financing for the acquisition was not disclosed.
Xpeng (NYSE:XPEV) – Chinese electric car maker Xpeng will acquire Didi’s EV unit for up to $744 million, forming a strategic partnership. Xpeng shares are up 4.5% premarket. Xpeng will launch a new model under the MONA brand, targeting the mass market. The cooperation will include marketing, insurance and robotaxis. Didi will acquire 3.25% of Xpeng.
Boeing (NYSE:BA) – Boeing is preparing to resume deliveries of the 737 MAX to China after a 4-year interruption. The first deliveries are expected in weeks. China had suspended the 737 MAX after accidents, but 90% have been operating commercially since June.
UBS (NYSE:UBS) – Credit Suisse, a subsidiary of UBS, reported a loss of US$4.0 billion in the second quarter of 2023, according to the Sonntagszeitung. The bank had already anticipated losses due to the restructuring and exit of non-core businesses.
JPMorgan Chase (NYSE:JPM) – Singapore-based Whampoa Group has hired Ali Moosa, formerly of JPMorgan, to lead a crypto-focused digital bank in Bahrain. The bank, Singapore Gulf Bank, aims to integrate conventional and digital financial services across Asia and the Middle East.
Citigroup (NYSE:C) – Jon Gidney, Vice President of Citigroup Australia, plans to retire after nearly 30 years in finance. Previously, he led mergers and acquisitions at JPMorgan Australia. He announced his retirement on LinkedIn.
McDonald’s (NYSE:MCD) – Chinese private equity firm Trustar Capital plans to create a continuation fund to sell its stake in McDonald’s China at a target valuation of $10 billion. This movement would provide liquidity to current investors. Trustar trades with sovereign wealth funds including GIC and Mubadala. In 2017, McDonald’s sold 80% of its Chinese operations, including to CITIC and Carlyle. Both analyze options for their holdings.
Hostess Brands (NASDAQ:TWNK) – Snack maker Hostess Brands is considering a sale after showing interest from major players such as General Mills (NYSE:GIS), Mondelez (NASDAQ:MDLZ), PepsiCo (NASDAQ:PEP) and Hershey (NYSE:HSY). With a market cap of approximately $4 billion, Hostess has consulted with Morgan Stanley (NYSE:MS) about potential deals.
Horizon Therapeutics (NASDAQ:HZNP), Amgen (NASDAQ:AMGN) – The US FTC has paused its challenge to Amgen’s purchase of Horizon Therapeutics for $27.8 billion through September 18. Amgen expects to finalize the acquisition in December. The FTC had initially sought to block the deal over competitive concerns related to two Horizon drugs.
SentinelOne (NYSE:S) – Cybersecurity startup Wiz is considering acquiring SentinelOne, valued at $4.9 billion. SentinelOne, which faces financial challenges, is exploring options to sell. Both companies have been partnering on cloud security since March.
BlackBerry (NYSE:BB) – Veritas Capital has offered to buy BlackBerry Ltd, which is valued at US$3.1 billion. BlackBerry, famous for its smartphones, now focuses on software for automobiles and cybersecurity. Offer details remain unknown.
3M (NYSE:MMM) – 3M moves closer to a $5.5 billion settlement over defective earplugs, affecting thousands of military veterans. The company was expected to pay around $10 billion. Aearo, a subsidiary of 3M, declared bankruptcy in 2022. Shares of 3M, which have fallen 17% this year, are up 5.1% in premarket trading on Monday.
Alibaba (NYSE:BABA), JD.com (NASDAQ:JD), Baidu (NASDAQ:BIDU) – Chinese companies’ US depositary receipts are up about 1% premarket after the Chinese government’s announcement about the reduction of a transaction tax and other initiatives to boost its financial markets.