The US Index Futures operate with high, after four consecutive falls of the Dow Jones and S&P 500, when fears of recession returned to the investors’ radar. Market players fear that weaker inflation figures, along with rising jobless claims, the banking crisis and the US debt impasse could lead to an economic slowdown in the world’s largest economy.
The debt ceiling meeting between President Joe Biden and congressional leaders scheduled for this Friday has been postponed until next week.
By 8:03 am, Dow Jones futures were up 124 points, or 0.37%. S&P 500 futures were up 0.33%, while Nasdaq-100 futures were up 0.14%.
Brent crude rose 0.32% to $74.32 a barrel. The 10-year US Treasury yield was at 3.418%. Bitcoin was trading at $26,370, its lowest level since mid-March, reacting to a crackdown by US regulators.
On the economic front, Investors are digesting April’s import prices, released at 8:30 am. The University of Michigan confidence will be released at 10:00 am. At 7:45 pm, two members of the Federal Reserve participate in events. In April, the cost of imported goods in the US rose 0.4%, the first increase this year, exceeding economists’ expectations. In the last 12 months, import costs fell by 4.8%. The cost of imported fuel rose 4.5%, while the cost of imports excluding fuel was flat. Export prices rose 0.2% in April, after falling 5.9% year-on-year.
Iron ore suffered a new drop in view of the discouraging prospects for demand in China. The metal contract on the Chinese Exchange in Dalian fell 3.6% to 685.50 yuan, equivalent to US$99.17 a tonne, its weakest level since May 5, and marking the sixth consecutive weekly drop. On the Singapore Exchange, the June contract is up 1% but has already dropped more than 20% since peaking this year at around $131 a tonne in mid-March, according to Reuters. The Shanghai index, of China’s stock exchange, dropped 1.12%, completing the fourth straight fall.
At the close of Thursday, the performance of US stock markets was mixed. The Dow fell 221.82 points, or 0.66%, to close at 33,309.51. The S&P 500 fell 0.17% to close at 4,130.62 points. The Nasdaq Composite rose 0.18% to close at 12,328.51. The negative performance reflected heightened risk aversion following PacWest’s announcement that its deposits were down 9.5% last week, with regional bank stocks reacting to yet another day of sharp declines. On the other hand, Nasdaq rose on Thursday with the impetus of Big Techs. On the economic front, US data came in weaker. The producer price index, the PPI, increased slightly less than expected, 0.2% m/m, against expectations of 0.3%. The number of unemployment insurance claims rose to 264 thousand (exp: 245 thousand). That way, with weaker-than-expected activity and inflation data, US bond rates declined. At the same time, the dollar strengthened on perceptions of greater risk of recession.
On Friday’s earnings schedule are Crescent Point, Embecta, Spectrum Brands, Delcath Systems, AirSculpt, among others.
Wall Street Corporate Highlights for Today
Getaround Inc (NYSE:GETR) – Shares of the car-sharing company surged 105.4% in premarket trade after the company said on Thursday it plans to buy all of HyreCar Inc.’s assets (NASDAQ:HYRE) for $9.45 million.
Microsoft (NASDAQ:MSFT) – Microsoft Chief Marketing Officer Chris Capossela sold $2.85 million worth of company stock last week and this week. He sold a total of 9,177 shares at an average price of $309.77 per share. Capossela still owns about 105,200 shares of Microsoft. Judson Althoff, Microsoft’s chief commercial officer, also sold shares in the company, selling 30,000 shares at average prices just above $306 on May 1, bringing him $9.2 million.
Apple (NASDAQ:AAPL) – Apple will open its first online store in Vietnam next week, aiming to drive growth in emerging markets with young populations and few iPhones. The company has already opened physical stores in India recently.
Meta Platforms (NASDAQ:META) – Shares in Meta are up 0.9% premarket after the company launched the AI Sandbox for advertisers to experience AI-powered generative ad tools. In addition, it updated Meta Advantage with an automated report of performance comparisons and features to improve audience reach and promote dynamic video ads. The company has invested “tens of billions of dollars” in AI to drive better results.
Amazon (NASDAQ:AMZN) – Amazon shares are on their longest streak since July 2018, ending their eighth straight session of gains on Thursday. Amazon shares have gained more than 9.0% during their current streak. Meanwhile, the Consumer Discretionary sector has had a quieter period, gaining around 1.4% over the past eight sessions.
Tesla (NASDAQ:TSLA) – Tesla shares are up 2.4% premarket after CEO Elon Musk announced that Twitter will have a new CEO, while he will take over as executive chairman and CTO, focusing on products, software and system operations. Tesla shares rose in response to the news, easing investor concerns about its Twitter distraction. Elsewhere, Tesla will roll out software updates to more than 1 million vehicles in China to allow for changes to braking methods and more warnings about using accelerator pedals. In the US, Tesla raised prices for its Model S, X and Y vehicles by modest amounts, but still lower than prices at the beginning of the year. The company raised prices on the most expensive Model S and X variants by $1,000 and all Model Y variants by $250, which is an increase of about 0.5% to 1.1% since the last price change.
Polestar (NASDAQ:PSNY) – Polestar has reduced its production forecast for 2023 and will cut 10% of its workforce. The automaker expects to produce between 60,000 and 70,000 cars this year, down from 80,000 previously forecast. The company blamed the delay in starting production of the Polestar 3 and the challenging environment for the industry.
Southwest Airlines (NYSE:LUV) – Shares of Southwest Airlines were flat in premarket trading after the company’s pilots voted overwhelmingly in favor of an authorization to strike ahead of the summer travel season, the union Southwest Airlines Pilots Association said ( SWAPA), with 99% of the votes in favour. Southwest said the outcome will not affect its operations, while SWAPA pointed to operational issues and a lack of progress in the talks. American Airlines pilots also passed a strike mandate this month.
Air Canada (AC) – Air Canada pilots are eyeing “landmark” gains in the workplace and said on Thursday that full negotiation with the carrier will likely begin this summer before the end of its decade-long contract, according to a letter to union members. American pilots are pushing for higher pay and better scheduling after airmen made significant gains in a recent deal with Delta Air Lines that offers a 34% pay increase over four years.
Embraer (NYSE:ERJ) – Embraer SA will sell up to 250 Praetor 500 aircraft to Berkshire Hathaway‘s NetJets (NYSE:BRK.B) in a deal valued at US$5 billion, with deliveries beginning in 2025. This is the third agreement between the companies, including a service contract.
Goodyear Tire and Rubber Company (NASDAQ:GT) – Goodyear stock was down about -0.6% premarket. Activist investor Elliott Investment Management has disclosed a large stake in Goodyear Tire & Rubber Co, proposing board renewal, store sale and operational overhaul. Elliott owns 10% of the 125-year-old company and has proposed that five new directors join the board. Goodyear can use proceeds from the sale of the chain of stores to pay down debt and improve its balance sheet. All of Elliott’s proposed changes could lift Goodyear’s share price by about $21 to as low as $30, Reuters said.
GSK (NYSE:GSK) – Shares in GSK are up 1.5% premarket. GSK has sold 240 million shares of its Haleon (NYSE:HLN) consumer health business for 335 pence each, raising around $1 billion. The price represents a 2.3% discount, reducing GSK’s stake to 10.3%. Haleon is the world’s largest independent consumer health company selling over-the-counter drugs, vitamins and oral care products.
Johnson & Johnson (NYSE:JNJ) – The Official Talc Claimants Committee has filed a motion in federal bankruptcy court to file a $30 billion fraudulent transfer claim against LTL Management, a unit created by Johnson & Johnson to handle bankruptcy claims, according to SeekingAlpha. The motion seeks to annul and recover this transfer for the benefit of all talc claimants. A hearing on the motion is scheduled for June 7 in Trenton, NJ.
Sony (NYSE:SONY) – Sony shares are up 1.5% premarket. Sony Pictures Entertainment is merging its Pure Flix streaming service with cable rival Great American Media, giving Pure Flix a head start in front of traditional viewers. The combination will allow Pure Flix and Great American Media content to cross each other’s platforms. Sony acquired Pure Flix in December 2020, and as part of the deal, Great American’s new TV networks will have a streaming home.
HSBC (NYSE:HSBC) – US regulators on Thursday imposed civil fines on Bank of Nova Scotia (TSX:BNS) and HSBC Holdings for record-keeping violations through the use of personal devices and apps. HSBC Securities has agreed to pay $15 million to settle the SEC’s charges, while Scotia Capital has agreed to pay $22.5 million in total to settle the US Commodity Futures Trading Commission and SEC charges. Both banks admitted to failing to meet record-keeping requirements for registered dealers with US market regulators.
Bank of America (NYSE:BAC) – Large US creditors will bear most of the cost of replenishing a deposit insurance fund that was drained by $16 billion by the collapse of Silicon Valley Bank and two other creditors. The banking regulator will impose a “special assessment” fee of 0.125% on unsecured creditor deposits in excess of $5 billion, based on the amount of unsecured deposits a bank held at the end of 2022. 113 banks pay the fee. The fee would be charged over eight quarters beginning in June 2024. JPMorgan Chase & Co (NYSE:JPM) is expected to pay an estimated annual fee of $1.3 billion, followed by $1.1 billion by Bank of America Corp. and $898 million for Wells Fargo & Co (NYSE:WFC).
JPMorgan Chase (NYSE:JPM) – JPMorgan Chase CEO Jamie Dimon said the bank is holding weekly meetings to discuss potential implications of a US default. The so-called “war room” could increase to three times a day if the stalemate persists. Dimon also discussed the situation of regional banks and the need for caution when implementing more regulation, in addition to highlighting the importance of analyzing short sales of bank shares and possible collusion through social media posts.
PacWest (NASDAQ:PACW) – Equities gained 2.4% premarket after falling 22.7% in the previous session due to outflows of deposits. Other regional banks followed suit, with Western Alliance (NYSE:WAL) up around 2% and Comerica (NYSE:CMA) up as much as 1%.
Pfizer (NYSE:PFE) – Pfizer shares are up 0.3% premarket. Pfizer CEO Albert Bourla said drug companies are likely to take legal action against the Medicare drug price talks, which begin in September and take effect in 2026. Bourla argued that this will cut pharmaceutical profits and strain thousands of companies to pull back on the development of life-saving drugs.
Peloton (NASDAQ:PTON) – The shares of Peloton Interactive Inc. fell to a new all-time low on Thursday after recalls of 2.2 million of the company’s exercise bikes in the US. The stock closed down nearly 9% to end the session at $6.86, down from the previous closing level of $6.93. Shares are down 50% in the past three months on broader challenges, including a $75 million patent infringement settlement. PTON shares are up 0.73% premarket.
Beyond Meat (NASDAQ:BYND) – Shares in Beyond Meat plunged on Thursday after announcing a share sale of up to $200 million to deal with reduced cash. The company entered into a stock distribution deal with Goldman Sachs (NYSE:GS) to sell $200 million worth of its shares, or the equivalent of about 30% of its market value after Thursday’s slump. The company also reported its fifth consecutive quarter of declining year-over-year revenue and expects improvements in the second half of 2023. The stock is up 0.3% premarket.
Petrobras (NYSE:PBR) – Petrobras approved dividends of R$24.7 billion (US$4.94 billion) for 2021 in two installments. In line with its current shareholder compensation policy, the company suggested future changes, including the possibility of share buybacks, which will be considered by the board by the end of July. Shares are up 0.8% premarket.
First Solar (NASDAQ:FSLR) – Shares in the clean energy company rose 5% in premarket trading after First Solar announced the acquisition of Evolar AB for up to $80 million. Evolar is a European company that develops thin films used in solar panels.
Icahn Enterprises (NASDAQ:IEP) – Hindenburg Research began short selling in Icahn Enterprises after Carl Icahn’s investment firm reported an unexpected loss. Icahn was accused of excessive financial reporting and Ponzi-like structure by Hindenburg Research. Shares are up 5.9% premarket.
BuzzFeed Inc. (NASDAQ:BZFD) – Buzzfeed stock rose 3.5% premarket after the digital media company adjusted metrics for the year and said it was using more AI in its content.
Earnings
Blue Bird Corporation (NASDAQ:BLBD) – Shares in Blue Bird soared 32% in premarket after the school bus maker raised its sales outlook, reported better-than-estimates quarterly earnings and said a turnaround plan to cut costs was in place. before the predicted”.
News Corporation (NASDAQ:NWSA) – News Corp reported fiscal third-quarter results that beat expectations, helped by a “decidedly more positive” economic backdrop, sending shares up 4.5% premarket.
Sanmina Corp (NASDAQ:SANM) – Sanmina Corp shares were flat premarket after the electronics manufacturing service provider’s results and most of its outlook beat Wall Street expectations.
Getty Images Holdings Inc (NYSE:GETY) – Shares of Getty Images were flat premarket after a mixed first quarter, but the full-year sales forecast for the photo and video library service came in slightly above expectations.
Petrobras (NYSE:PBR) – Petrobras had a drop of 14.4% in net profit for the first quarter, hit by lower oil prices, but the result of R$38.16 billion was above expectations of analysts who expected R$31 .96 billion, according to data from Refinitiv. The company attributed the result to declining Brent oil prices, but also cited lower operating expenses as partially offsetting it.
Market view
Fox Corporation (NASDAQ:FOX) – Media stocks fell 2.4% after Wells Fargo downgraded the stock to equal weight of overweight, citing challenges related to demand for linear TV and the costs of sports rights. On Tuesday, the company reported a net loss for the third fiscal quarter due to costs related to Fox News’ deal with Dominion Voting Systems.
Barclays (NYSE:BCS) – Shares in the British bank rose 0.5% following an update from RBC Capital Markets. RBC said Barclays is currently trading at a “good entry point”, creating a promising opportunity for investors. The US-listed shares of the bank are down about 1.5% in 2023.
Pearson (NYSE:PSO) – Shares of the education company were up 1.1% in premarket trading on Friday. Morgan Stanley has lifted Pearson shares to overweight of equal weight , citing the potential value creation of generative AI. Shares are down 10.2% year-to-date.