US Index Futures rose slightly premarket on Wednesday on
anticipation of corporate earnings, a day after the Dow Jones hit
its longest streak of gains since 2021.
By 6:52 AM, Dow Jones (DOWI:DJI) futures were up 38 points,
or 0.11%. S&P 500 futures were up 0.03%, while Nasdaq-100
futures were up 0.12%. The 10-year Treasury yield is at
3.752%.
European shares were higher, boosted by Kering shares after
changes in the luxury group’s top management. Furthermore, the
London market stabilized after data revealed a faster-than-expected
deceleration in British inflation. The British consumer price
index changed by 0.1% in June in the monthly comparison, with
market consensus expecting 0.40%. On an annual basis, the data
changed by 7.9% in June, against a market consensus of 8.20%.
On Wednesday’s American economic agenda, the Department of
Commerce will release data on housing construction starting in June
at 8:30 am. Economists polled by Dow Jones forecast a 9.3%
drop in new home construction from the previous month, following a
sharp 21.7% increase. Consensus estimates call for a 0.7% drop
in building permits in June, compared with the 5.2% gain recorded
the previous month. Crude Oil Inventories data for the week to
7/14 will be released at 10:30 AM. In addition, the US
government is going to hold this Wednesday, at 1 pm, the auction of
20-year Treasuries, whose objective is to finance public
expenses.
In commodities markets, West Texas Intermediate crude for August
is up 0.09% at $75.82 a barrel. Brent crude for September is
up 0.38% near $79.93 a barrel. Iron ore futures traded in
Dalian, China, fell 0.60%, at US$115.38 per tonne, once again in
the face of the cooling of the Chinese economy and in anticipation
of stimuli in the country.
At Tuesday’s close, the Dow jumped 366.58 points or 1.06% to
34,951.93 points. The S&P 500 rose 32.19 points or 0.71%
to 4,554.98 points. The Nasdaq Composite advanced 108.69
points or 0.76% to 14,353.64 points. The positive day was
driven by favorable results from Bank of America (NYSE:BAC) and
Morgan Stanley (NYSE:MS). However, economic activity data
disappointed, with retail sales and industrial production below
expectations. The market is now pricing in just one more
interest rate hike by the Fed. In Europe, there was a positive
day in the markets after members of the ECB suggested the
possibility of a pause in interest rate increases.
On the front of Wednesday’s corporate results, due before the
start of trading, earnings from Goldman Sachs (NYSE:GS), ASML
(NASDAQ:ASML), Halliburton (NYSE:HAL), US Bancorp (NYSE:USB) ,
Nasdaq (NASDAQ:NDAQ), Baker Hughes (NASDAQ:BKR), M&T Bank
(NYSE:MTB), among others. After the market close, among the
most highly anticipated reports are Tesla (NASDAQ:TSLA), Netflix
(NASDAQ:NFLX), United Airlines (NASDAQ:UAL), IBM (NYSE:IBM) and Las
Vegas Sands (NYSE:LVS) .
Wall Street Corporate Highlights for Today
Microsoft (NASDAQ:MSFT) – Microsoft stock
closed at a record high on Tuesday after announcing pricing for the
new Microsoft 365 service, which adds AI to the Office
suite. Copilot will cost $30 more per month, increasing
recurring revenue. The service is already being tested by
customers such as Goodyear (NASDAQ:GT)
and General Motors (NYSE:GM).
Alphabet (NASDAQ:GOOGL) – Google is
starting a pilot program restricting some employees’ internet
access to reduce the risk of cyberattacks. The measure aims to
protect data and prevent security incidents. The company seeks
to harden its internal systems against malicious threats.
Meta Platforms (NASDAQ:META) – Meta
announced the commercial launch of its open source AI model, Llama,
in partnership with Microsoft. Called Llama 2, the model will
be distributed through Microsoft’s Azure cloud service and will be
available for direct download and through other
providers. Meta hopes Llama will offer a free alternative to
the proprietary models sold by OpenAI and Google, threatening its
dominance in the generative AI software market.
Teladoc (NYSE:TDOC), Microsoft (NASDAQ:MSFT)
– Teladoc Health is expanding its partnership with Microsoft to
leverage the company’s artificial intelligence services to automate
clinical documentation on its telehealth platform. This
integration will help ease the workload of healthcare professionals
during virtual appointments. The use of AI has been actively
discussed in the healthcare industry as a way to deal with
administrative burden and staff shortages.
Twilio (NYSE:TWLO) – ARK funds continued
to acquire Twilio shares on Tuesday, bringing a total of $11.4
million in new purchases. The Fintech ETF added 18,099 shares,
the Innovation ETF acquired 146,801 shares and the Next Generation
Internet ETF added 26,620 shares, based on the closing price of the
share and corresponding to the dollar amount purchased on
Monday. Twilio represents more than 0.1% of the three
funds.
Tesla (NASDAQ:TSLA) – Tesla has applied
for approval to make changes to its factory near Berlin, with a
view to expanding it to become the largest car factory in
Europe. The company plans to double capacity to 1 million cars
a year and 100 gigawatt hours of battery production. In other
news, the US National Highway Traffic Safety Administration (NHTSA)
is conducting a special investigation into a fatal accident
involving a 2018 Tesla Model 3 that is suspected to have had
advanced driver assistance systems. The accident occurred in
South Lake Tahoe, California on July 5, resulting in two
fatalities.
United Airlines (NASDAQ:UAL) – United
Airlines pilots are turning down captain promotions due to
unpredictable schedules and poor quality of life. The
resulting shortage of captains could reduce the flights available
to travelers, impacting the company’s operation. Airlines are
facing challenges in attracting pilots to positions of greater
responsibility.
American Airlines (NASDAQ:AAL) – Pilots’
ratification of American Airlines’ new contract is in jeopardy as
United Airlines raised the benchmark with its own deal, according
to American’s pilots union. The union is seeking contract
improvements to meet industry standards and avoid falling behind
other airlines.
Altice USA (NYSE:ATUS) – Armando Pereira,
co-founder and former CEO of telecom group Altice, will appear
before a judge in Portugal as part of an investigation into
corruption. Altice tries to isolate the events, stating that
they are isolated to Portugal and individuals without executive
functions. Pereira no longer has a formal role, but his
influence on the group is profound. Altice faces significant
debt due to aggressive acquisitions. Altice USA’s purchasing
director was also placed on leave.
AT&T (NYSE:T) – AT&T has said it
will not immediately remove the lead cables from Lake Tahoe pending
further review, according to its court filing. The company
defended itself against the Wall Street Journal reports, arguing
that the cables represent only a small part of its network.
Rio Tinto (NYSE:RIO) – Rio Tinto has
reported production issues at its operations, citing concerns about
a global economic slowdown. However, the company expects its
iron ore production to be at the upper end of expectations for the
year. The fall in iron ore prices due to China’s real estate
sector may improve with the Chinese government’s momentum
policies. Rio also lowered its expectations for refined copper
production and faced challenges at its iron ore operations in
Canada.
Yum Brands (NYSE:YUM) – Taco Bell, owned
by Yum Brands, has successfully attempted to trademark the phrase
“Taco Tuesday” from competitor Taco John’s. Taco Bell argued
that the phrase was commonplace and that Taco John’s had wrongfully
monopolized it. Taco John’s has abandoned the mark and Taco
Bell is also seeking to cancel a separate trademark relating to the
expression. Taco Bell said it wanted to “clear” the phrase for
use by restaurants across the country.
Chipotle Mexican Grill (NYSE:CMG) – With
the opening of the first franchised restaurants in Kuwait and Dubai
next year, Chipotle is expanding its international
presence. Analysts see this as a good sign for the company’s
value, enabling opportunities for faster growth, although the focus
remains on the domestic business.
Constellation Brands (NYSE:STZ) –
Constellation Brands has agreed to appoint two new independent
directors and share confidential information with Elliott
Investment Management. The agreement aims to facilitate
collaboration and recognizes Constellation’s growth potential.
Pfizer (NYSE:PFE) – Pfizer and Flagship
Pioneering plan to invest $100 million to develop up to 10 new
drugs in areas including internal medicine, oncology, infectious
diseases and immunology. The companies will collaborate in the
discovery and development process, with Pfizer providing funding
and an option to purchase the drugs.
Goldman Sachs (NYSE:GS) – The Goldman
Sachs board expressed support for CEO David Solomon in his focus on
Wall Street’s core businesses and asset management. Despite
rising skepticism, the board is confident in Solomon’s ability to
revive the bank’s stock. The expected arrival of Tom Montag
also indicates internal support for Solomon’s recovery
plans. Though Goldman’s shares have fallen this year, the bank
remains one of the top mergers and acquisitions advisors
globally.
Bank of America (NYSE:BAC) – New York’s
pension authority asked Bank of America’s board to recover
executive pay after the bank agreed to pay a $250 million
fine. The city controller demanded transparency on payment
recovery and internal reporting.
Morgan
Stanley (NYSE:MS), Mitsubishi UFJ
Financial Group (NYSE:MUFG) – Mitsubishi UFJ
Financial Group and Morgan Stanley announced an expansion of their
15-year alliance, combining some operations in their Japanese
brokerage joint ventures. The collaboration will include
equity research, sales and execution services, as well as
reorganizing the equity underwriting business. The two
companies will also collaborate on foreign exchange
trading. The partnership builds on MUFG’s $9 billion
investment in Morgan Stanley in 2008.
Morgan Stanley (NYSE:MS) – Morgan Stanley is
moving more than 200 technology developers from mainland China to
Hong Kong and Singapore in response to the country’s restrictions
on accessing data stored on land. The bank’s remaining team is
building an autonomous system in China to comply with local
regulations. These changes reflect multinationals’ growing
caution about data security in China. In other news, Morgan
Stanley’s expense reduction efforts resulted in termination costs
of $308 million in the second quarter, after eliminating about
3,000 jobs. The investment bank has faced spending pressures,
and similar cuts have occurred at other Wall Street investment
banks. Compensation expenses also increased in the period.
Grab Holdings (NASDAQ:GRAB) – GXS Bank,
Grab Holdings’ new digital bank, has increased the deposit limit on
its Singapore savings account from S$5,000 to S$75,000. This
indicates that the Monetary Authority of Singapore has raised the
limit previously imposed on the company. This change is an
advantage for GXS Bank to compete with traditional
banks. Other Grab-backed digital banks are also pushing for
higher deposit limits.
Blackstone (NYSE:BX) – Blackstone Group LP
will invest $150 million in Astaris Capital Management, a firm
specializing in event-driven investing in Europe. The
investment will be split between Astaris’ existing hedge fund and a
new pool of capital. Blackstone is making the investment
through its Strategic Alliance Fund IV.
Yellow Corp (NASDAQ:YELL) – The
International Brotherhood of Teamsters issued a strike notice
Tuesday, citing Yellow Corp’s failure to make a crucial payment to
health and pension funds. The union warned that benefits could
be suspended if payment is not made, while analysts predict
negative impacts for Yellow and opportunities for competing
companies such as Old Dominion Freight
Line (NASDAQ:ODFL) and ArcBest
Corp (NASDAQ:ARCB).
Cracker Barrel (NASDAQ:CBRL) – Investors
in Cracker Barrel Old Country Store Inc. reacted positively on
Tuesday following the announcement of a leadership change. CEO
Sandra Cochran will step down after 12 years, to be succeeded by
Julie Felss Masino starting in November. The leadership
transition comes after a period in which the company faced
challenges related to financial results and marketing actions.
Earnings
ASML (NASDAQ:ASML) – ASML is up 0.4% in
premarket trading on Wednesday after it posted higher revenue and
profit in the second quarter, but warned of future economic
uncertainties. The company raised its 2023 outlook, driven by
strong demand for its lithography machines. However, the CEO
highlighted macroeconomic uncertainties and possible US export
restrictions to China. The company reported net profit of 1.9
billion euros, against 1.82 billion euros expected, and expects net
sales in the third quarter of this year to be between 6.5 billion
euros and 7 billion euros.
Interactive Brokers (NASDAQ:IBKR) –
Interactive Brokers reported second-quarter results that were below
expectations. According to Refinitiv, the brokerage reported
adjusted earnings of $1.32 per share, below the average estimate of
$1.40 per share.
Carvana (NYSE:CVNA) – The online auto
retailer took a 7.7% drop in premarket trading on Wednesday after
it announced it will delay reporting its second-quarter results to
the previously scheduled August 3 for today.
Omnicom Group (NYSE:OMC) – The global
marketing company reported second-quarter revenue of $3.61 billion,
missing forecasts of $3.67 billion, according to FactSet consensus
estimates. Omnicom slightly beat earnings expectations, with
adjusted earnings of $1.81 per share, compared to consensus
estimates of $1.80 per share.
JB Hunt (NASDAQ:JBHT) – JB Hunt Transport
Services reported second-quarter earnings of $1.81 per share, along
with revenue of $3.13 billion. Analyst expectations polled by
Refinitiv were for earnings per share of $1.92 on revenue of $3.31
billion.
Western Alliance Bancorporation (NYSE:WAL)
– Western Alliance reported earnings of $1.96 per share, below the
consensus estimate of $1.98 per share, according to
Refinitiv. However, revenue for the quarter reached $669
million, beating the forecast of $652 million. The bank also
reported an increase in deposits during the quarter.
United Community Banks
Inc (NASDAQ:UCBI) – United Community Banks
reported lower-than-expected second-quarter
results. Competition for new customers has increased costs,
while higher interest rates have made borrowing more
difficult. Still, the bank recorded an increase in loans and
deposits. Management cited price competition from deposits as
a challenge.
Morgan Stanley (NYSE:MS) – Morgan Stanley
beat second-quarter earnings estimates, driven by growth in the
wealth management business. Net income for the wealth
management unit reached a record $6.7 billion. CEO James
Gorman expressed optimism about the economic environment and
stressed that the choice of successor will not be based solely on
the performance of business units.
BNY Mellon (NYSE:BK) – Bank of New York
Mellon Corp beat second-quarter earnings expectations, boosted by
Federal Reserve tightening policies. Net interest income
increased 33%, while adjusted earnings per share beat analysts’
average estimate. The bank has also seen an increase in assets
under custody or administration.
Charles Schwab (NYSE:SCHW) – Charles
Schwab reported a smaller-than-expected decline in second-quarter
profit, driven by rising asset management fees. While interest
income declined, the company saw an increase in fund inflows,
building confidence in a future recovery. Adjusted earnings
per share beat analyst estimates.
Lockheed Martin (NYSE:LMT) – Lockheed
Martin raised its full-year sales and profit outlook due to demand
for military equipment driven by geopolitical uncertainty. The
company reported second-quarter net income of $6.63 per share,
above Wall Street estimates of $6.45 per share, according to
Refinitiv data. Quarterly net sales increased 8.1% to $16.69
billion, beating expectations of $15.92 billion.
Market view
Joby Aviation (NYSE:JOBY) – JP Morgan
downgraded shares of electric air taxi maker Joby Aviation from
“Neutral” to “Underweight”. However, the price target was
raised from $5 to $6. As a result, the stock fell 8.8% in
Wednesday’s premarket trade to hit $9.17.
Citigroup (NYSE:C) – Citigroup has been
upgraded from “Hold” to “Buy” by Odeon Capital.
UnitedHealth
Group (NYSE:UNH) – UnitedHealth rose
3.3% on Tuesday after the healthcare provider was upgraded to
“Outperform” from “Market Perform” by Bernstein.
Yellow (NASDAQ:YELL)
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