US Index Futures were lower in premarket trading on Wednesday, weighed down by investors’ caution in anticipation of Powell’s speech, scheduled to begin at 10:00 AM. Powell will be able to clarify, to investors, the outlook for monetary policy in the second half of this year, after saying, the previous week, that Fed members foresee further hikes in interest rates against persistently high inflation.
By 07:12 AM, Dow Jones futures (DOWI:DJI) was down 22 points, or 0.06%. S&P 500 futures were down 0.05%, while Nasdaq-100 futures were down 0.10%. The 10-year Treasury yield was at 3.748%.
In the commodities market, the iron ore futures contract for September continued to fall, with investors evaluating the possible additional support that China can offer to its economy. ANZ Research said in its quarterly report that steel production in China is likely to decline further due to weakness in the real estate sector. The ore contract closed down 1% at 797.50 yuan per tonne, or US$110.86 per tonne, on the Dalian Stock Exchange. Meanwhile, Brent crude for August traded down -0.22% at $75.73. West Texas Intermediate crude fell -0.11% to $71.12 a barrel.
By Tuesday’s close, the indices ended the day in negative territory, amid an environment of caution on the part of investors ahead of Powell’s testimony. Meanwhile, on the other side of the world, the Chinese BC decided to cut the 1 and 5 year rates by 10 bps. Despite the monetary easing, the market had a negative reaction. The reading that remains is that the cut would be insufficient to contain the expected slowdown in the second largest economy in the world. The Dow Jones fell 245.25 points or 0.72% to 34,053.87 points, the S&P 500 fell 20.88 points or 0.47% to 4,388.71 points and the Nasdaq Composite fell 22.28 points, or 0.16% to 13,667.29 points.
Ahead of Wednesday’s quarterly results, traders are looking at reports from Winebago (NYSE:WGO) and Patterson ahead of market open. After the closing, balance sheets from KB Home (NYSE:KBH), Algoma (NASDAQ:ASTL), Avid (NASDAQ:AVID) and Steelcase (NYSE:SCS) are expected.
Wall Street Corporate Highlights for Today
Alphabet (NASDAQ:GOOGL) – YouTube will launch its first official live shopping channel in South Korea on June 30. The country is already a key market for live streaming trading led by Naver. The new channel will offer a commerce platform for businesses and stream multi-brand shopping content. South Korea expects the live trading market to grow to 10 trillion won this year.
Microsoft (NASDAQ:MSFT), Activision Blizzard (NASDAQ:ATVI) – Microsoft CEO Satya Nadella and Activision Blizzard CEO Bobby Kotick are scheduled to testify at a five-day hearing at the Federal Trade Commission, which seeks to block Microsoft’s acquisition of Activision for $69 billion. Other witnesses include executives from Sony (NYSE:SONY) and Nvidia (NASDAQ:NVDA), among others. The hearing will take place from June 22 to 29.
Amazon (NASDAQ:AMZN) – Analysts at Jefferies raised Amazon’s price target, highlighting its potential in the area of artificial intelligence. While shares have already risen significantly, AI-driven profitability and earnings for its cloud services are seen as added perks. Amazon is also gearing up for Prime Day in July.
Alibaba (NYSE:BABA) – Ant Group Co, backed by Jack Ma, is developing advanced language model technology to enhance ChatGPT-style services, joining other Chinese companies in their pursuit of leadership in artificial intelligence. The project, called “Zhen Yi”, is being developed internally by a dedicated unit. Ant Group has invested significantly in research and development, strengthening its technology in several areas.
Hewlett Packard Enterprise (NYSE:HPE) – Hewlett Packard Enterprise announced the launch of a cloud computing service designed to power artificial intelligence systems similar to ChatGPT. The company is competing head-to-head with Amazon, Microsoft and Google in this fast-growing market, adapting its supercomputer expertise to offer a dedicated service for advanced language models.
PayPal (NASDAQ:PYPL) – KKR has agreed to buy up to €40 billion of PayPal’s “Buy Now, Pay Later” (BNPL) loans in Europe. The deal strengthens PayPal and removes risk, while KKR sees credit risk transfer as positive for payment processors. PayPal will remain responsible for customer-facing operations.
Visa (NYSE:V) – Visa has announced the hiring of Chris Suh, formerly Chief Financial Officer of Electronic Arts (NASDAQ:EA), as its next CFO. Suh will succeed Vasant Prabhu and will take up the position on August 1 amidst a challenging economic environment. The appointment follows the recent appointment of CEO Ryan McInerney.
JPMorgan (NYSE:JPM) – JPMorgan Chase & Co. is carrying out a new round of layoffs in Asia, cutting about 20 investment banking jobs due to lack of business activity. These reductions mainly affected junior employees in specific sectors.
Automakers – Western automakers are securing supplies of graphite, essential for electric vehicle (EV) batteries, outside China. Companies such as NextSource Materials, Talga Group, Syrah Resources, Magnis Energy Technologies, Renascor Resources, New World Graphite, Tirupati Graphite and Westwater Resources are producing or planning to produce graphite to meet growing demand from automakers and battery manufacturers.
Tesla (NASDAQ:TSLA) – Tesla CEO Elon Musk revealed that Indian Prime Minister Narendra Modi is encouraging the automaker to invest significantly in India. Musk said he hopes to bring Starlink, SpaceX’s satellite internet service, to the country. Tesla is considering establishing a car and battery manufacturing base in India as an alternative to reliance on China.
Rivian (NASDAQ:RIVN) – Electric vehicle maker Rivian announced on Tuesday that it will adopt Tesla’s charging standard, allowing its customers to access Tesla’s network of Supercharger chargers in the US and Canada. The decision boosts Tesla’s leadership in the industry and is a win for the company. Rivian will continue to expand its own fast charging network.
Hyundai Motor (USOTC:HYMTF) – Hyundai Motor is considering making its vehicles compatible with the Tesla charging standard in North America. The company is evaluating the possibility of joining Tesla’s standard, but needs to ensure that it is in the interest of its customers. Hyundai will consult with Tesla to explore tweaks to its charging system. This openness to other electric vehicles is a condition of qualifying for US government grants. In other news, the company announced at its annual investor day a significant increase in investment in electrification, totaling $28 billion over the next decade. The company also raised its electric vehicle sales target to 2 million units by 2030. In addition, it plans to restructure its China business to prioritize profitability.
Nio (NYSE:NIO) – Nio has announced that it plans to receive an investment of more than US$1 billion from a fund backed by the government of Abu Dhabi.
General Motors (NYSE:GM) – General Motors is investing $920 million to expand its diesel engine plant in Ohio to produce future powertrain products for heavy-duty trucks with internal combustion engines. These investments total more than $3.2 billion to support production of next-generation vehicles, despite GM’s commitment to stop selling gasoline and diesel vehicles by 2035 in favor of electric vehicles.
Volkswagen (USOTC:VWAGY) – Volkswagen is in discussions with its partner SAIC to conduct an independent audit of its plant in Xinjiang, China, in response to investor pressure over possible human rights abuses in the region. The automaker will address the issue in its capital market day this Wednesday.
Stellantis (NYSE:STLA) – Stellantis and Foxconn (USOTC:FXCOF) have formed a joint venture called SiliconAuto, with a 50% interest each, to design and sell semiconductors to the automotive industry starting in 2026. The new company will supply semiconductors to Stellantis, including its electronic and software architecture ‘STLA Brain’, as well as for other customers. This partnership aims to meet the growing demand for computer-controlled components, especially for electric vehicles. SiliconAuto will be headquartered in the Netherlands and will have a combined management team from the two companies.
Panasonic Holdings (USOTC:PCRFY) – Mazda and Panasonic Energy will begin negotiations to establish a partnership to supply batteries for electric vehicles. Panasonic will supply lithium-ion batteries for the Mazda EVs that will be introduced in the second half of the decade. The goal is to boost the electrification of Mazda vehicles.
General Electric (NYSE:GE) – According to the Kommersant newspaper, General Electric has unexplainedly stopped servicing gas turbines at thermal power plants in Russia, as part of its suspended operations in the country since Moscow’s invasion of Ukraine.
Embraer (NYSE:ERJ) – Embraer is resuming business in China, converting passenger jets into cargo aircraft in partnership with a local group in Lanzhou. The deal for 20 conversions aims to meet the growing demand for cargo aircraft driven by e-commerce. Embraer predicts that China will be responsible for 240 of these aircraft over the next 20 years. Embraer also closed new orders from American Airlines (NASDAQ:AAL) and Binter for its E-Jets, totaling around US$1 billion. Despite this, the company’s shares fell on the Bovespa index due to unmet expectations at the Paris Airshow.
Raytheon Technologies (NYSE:RTX) – Raytheon Technologies has been awarded a $1.15 billion contract by the United States Air Force to supply AMRAAM missiles. The increase in defense budgets reflects the shipment of weapons to Ukraine and the funding of future programs. In addition, the company also received a $264 million contract from the US Navy to produce AIM-9X Sidewinder missiles.
Thyssenkrupp (USOTC:TKAMY) – Thyssenkrupp is considering the sale of its warships division and is exploring options including talks with industrial investors, private equity firms and a possible stock market listing, according to German labor union IG Metall. Thyssenkrupp is scheduled to meet with the union on June 22 to discuss the sale talks.
Softbank (USOTC:SFTBY) – SoftBank Group CEO Masayoshi Son announced a shift to “offensive mode,” driven by advances in artificial intelligence. Despite recent losses, the group intends to focus on investment opportunities, seeking to raise funds through Arm’s Nasdaq listing. Son expressed confidence in his investment choices.
Berkeley (USOTC:BKGFY) – British homebuilder Berkeley forecasts a 20% drop in sales in the new fiscal year due to rising interest rates and difficult business conditions caused by inflation. Demand is concentrated in homes close to delivery, while confidence in the market will depend on the stabilization of interest rates. The company will remain cautious regarding new investments and sales launches. High inflation has led major lenders to re-evaluate their mortgage offerings.
Black & Decker (NYSE:SWK) – US securities regulators have reached a settlement with Stanley Black & Decker over allegations of failing to disclose benefits provided to officers and directors. Former executive Jeffery D. Ansell also settled the allegations related to violating securities laws. Stanley Black & Decker received no civil penalties, cooperated with the investigation and took corrective action.
Starbucks (NASDAQ:SBUX), Shake Shack (NYSE:SHAK) – Three companies, including Starbucks and Shake Shack, have been summoned by Chinese regulators in Shanghai for collecting excessive personal information. Regulators have required companies to comprehensively correct and protect personal data, and reported that Shake Shack has already made initial improvements, while Starbucks is actively making adjustments.
Ball Corp (NYSE:BALL) – Ball Corp is considering options for its aerospace business after reports it plans to sell it for more than $5 billion. Defense and private equity firms have shown interest, but no formal decision has yet been taken. Divestment would allow Ball to focus on beverage packaging and reduce its debt.
GSK (NYSE:GSK) – GSK’s respiratory syncytial virus (RSV) vaccine has shown long-term protection in older adults, according to a phase III trial. The vaccine, called Arexvy, recently gained EU approval and has been shown to be effective against serious respiratory illnesses caused by RSV.
Bayer (USOTC:BAYZF) – Bayer Crop Science announced that new products and services, in addition to its existing businesses, will double the size of the market it serves. The company expects to access more than €100 billion annually through additional business areas such as crop fertility, biofuels and precision agriculture. This will expand the division’s potential market.
Eli Lilly (NYSE:LLY), DICE Therapeutics (NASDAQ:DICE) – Dice Therapeutics rose 37% on Tuesday to hit $46.44 after agreeing to be acquired by Eli Lilly for $48 a share, totaling about $2.4 billion. Eli Lilly shares rose 1% in response to the announcement.
Arcellx (NASDAQ:ACLX) – Shares in Arcellx fell 7.2% on Tuesday after the company announced that the Food and Drug Administration had clinically suspended its investigational new drug for the treatment of relapsed or refractory multiple myeloma , due to the death of a patient.
Titan Medical (NASDAQ:TMDI) – Shares in Titan Medical fell after the company announced it will seek revenue through licensing its patent portfolio as the strategic review did not attract bids. The company has signed licensing agreements with companies in the surgical robotics industry.
FedEx (NYSE:FDX) – FedEx reported fourth-quarter net income of $1.54 billion, or $6.05 per share, compared to $558 million, or $2.13 per share, in the same quarter of last year. Revenue fell to $21.9 billion from $24.4 billion in the year-ago quarter. The company issued disappointing guidance for the next fiscal year, predicting “low to single-digit” sales growth, with earnings per share of $16.50 to $18.50. FedEx announced that it plans to ground an additional 29 aircraft due to continued demand challenges, and will also merge its Canadian ground delivery operations with its Express unit, converting contractors into employees. The latest change will result in cost savings of more than $100 million annually upon completion in 2025.
La-Z-Boy (NYSE:LZB) – Furniture maker La-Z-Boy forecast fiscal sales of between $470 million and $490 million in the first quarter, down from $604.1 million a year ago and coming in below analysts’ expectations, which were expecting around US$522 million.
Vodafone (NASDAQ:VOD) – Vodafone has retained Morgan Stanley (MS) to evaluate options for its Spanish unit, as reported by the Expansion newspaper. The company is undertaking a strategic review and is open to “structural changes”, according to its CEO.
Civitas Resources (NYSE:CIVI) – Civitas Resources announced the acquisition of oil and gas operations in the Permian basin for $4.7 billion, expanding its activities into the lucrative shale sector. The agreement will increase the company’s production by 60% and represents a transformation in its operating strategy.
NiSource (NYSE:NI) – NiSource announced the sale of a minority stake in its NIPSCO unit for $2.15 billion to Blackstone. This transaction will help the company reduce debt and finance its transition to renewable energy. Completion is scheduled for the end of 2023.
Rio Tinto (NYSE:RIO) – Rio Tinto said it has reopened a rail line at its Western Australia operations following the derailment of an iron ore train near the port of Dampier over the weekend. The line is still subject to speed restrictions while the cleanup and investigation continues.
Disney (NYSE:DIS) – Latondra Newton, chief diversity officer and senior vice president at Disney, is stepping down after more than six years. She plans to join a corporate board and focus on her personal creative enterprise. Julie Merges will take over Newton’s responsibilities on an interim basis.
VF Corp (NYSE:VFC) – VF Corp announced on Tuesday that Bracken Darrell, former CEO of Logitech (NASDAQ:LOGI), will become the company’s new CEO. The shoe and apparel maker faces weak demand for its Vans sneakers and Timberland boots. Darrell, known for his successful restructuring at Logitech, will take over on July 17th. The company’s former CEO Steve Rendle retired in December 2022, and interim CEO Benno Dorer will remain on the board, while Richard Carucci will take over as chairman permanently.
Dollar Tree (NASDAQ:DLTR) – Dollar Tree Inc. has set future-year goals targeting earnings of $10 or more per share through fiscal 2026. invest in technology. The stock is down 3.5% this year, while the S&P 500 has gained 14%.
Philip Morris (NYSE:PM) – Philip Morris has announced that it will open a new $30 million production facility in the Lviv region of Ukraine in the first quarter of next year. The company expects to create 250 jobs with this facility. The investment reflects Philip Morris’ long-term commitment as Ukraine’s economic partner, even in the midst of war and a significant drop in the country’s gross domestic product.
Peloton (NASDAQ:PTON) – Premarket shares of Peloton Interactive fell 2.5% to $8.05 after Wolfe Research rated the digital exercise company an “Underperform” and set a price target of $8.05. 6, according to the Fly report.
Allied Properties Real Estate (USOTC:APYRF) – Allied Properties Real Estate Investment Trust has announced the sale of its Toronto urban data center portfolio for C$1.35 billion to KDDI, a Japanese telecommunications operator. The company will use most of the proceeds to pay down debt and fund development activities.
IAC (NASDAQ:IAC) – The IAC announced two leadership changes. Brad Wilson will take over as CEO of Care.com, succeeding Tim Allen, who will become CEO of the company’s Ask Media Group. Both changes will be effective immediately.
Madison Square Garden Entertainment (NYSE:MSGE) – Sphere Entertainment Co., a provider of live entertainment, will sell 5.25 million shares of Madison Square Garden Entertainment Corp. MSG Entertainment will buy back approximately $25 million of its own Sphere shares. BofA Securities, Goldman Sachs and JP Morgan act as joint ledgers.