US index futures were higher in premarket trading on Wednesday, moving to recover from recent losses as investors digested the tax cut on banks in Italy and data in China.

By 6:42 AM, Dow Jones futures (DOWI:DJI) were up 62 points, or 0.18%. S&P 500 futures and Nasdaq-100 futures were up 0.25% each. The 10-year Treasury yield is at 4.032%.

On Wednesday’s economic agenda, investors will follow, at 10:30 am, the release of EIA’s weekly oil inventory, with the market projecting a reduction of 233 thousand barrels. Yesterday, API data showed an inventory build of 4.06 million barrels of oil for the week. At 1 pm, the government holds the ten-year Treasury auction. Yesterday, the US Treasury placed US$42 billion in the three-year event, with a cut rate of 4.398%.

In Europe, markets are digesting the recovery of bank shares in Italy, as they fell sharply yesterday after the local government announced a tax on income that could represent around 19%. Today, however, the government backtracked and said the tax will be capped at 0.1%, according to agencies.

In Asia, markets closed with no clear direction, with investors analyzing the inflation data in China, as measured by the consumer price index, which rose 0.20% in July month-on-month – above the consensus of -0.10% – and by the producer price index, which had a retraction of 0.30% on the same basis of comparison – also above the consensus of -0.40%.

In commodities markets, West Texas Intermediate crude for September was up 0.83% to trade at $83.61 a barrel. Brent crude for October was up 0.77% near $86.83 a barrel. Iron ore futures traded in Dalian, China rose 0.07% to $100.19 a tonne, showing some recovery from losses in recent days.

At Tuesday’s close, world markets faced declines due to economic uncertainties and instabilities in the financial system. Financial stocks in the US took the brunt especially after Moody’s downgraded US banks. The Dow Jones dropped 0.45% at 35,314.49 points. The S&P 500 fell 0.42% to 4,499.38 points. The Nasdaq Composite ended down 110.07 points or 0.79% at 13,884.32 points.

Contributing to the decline, Italy announced a tax on bank earnings. In the commodities sector, unfavorable Chinese trade data influenced negatively, marking the worst drop in exports since February 2020. The value of oil reestablished itself amid Ukrainian tensions. Federal Reserve remarks were also analyzed in light of an impending inflation report. Patrick Harker, president of the Fed Bank of Philadelphia, mentioned the chance of pausing rate hikes, while Thomas Barkin of Richmond thought it was premature to discuss a possible hike in September.

Ahead of Wednesday’s corporate results, traders are awaiting reports from Roblox (NYSE:RBLX), Sony , Wendy’s (NASDAQ:WEN), Nuvei (NASDAQ:NVEI), ahead of market opening. After the market closes, reports are expected from Walt Disney (NYSE:DIS), TheTradeDesk (NASDAQ:TTD), Wynn Resorts (NASDAQ:WYNN), Sonos (NASDAQ:SONO), among others.

Wall Street Corporate Highlights for Today

Amazon (NASDAQ:AMZN) – Reuters reported that Amazon is in talks as a key investor in SoftBank Group’s Arm Ltd (USOTC:SFTBY) ahead of the IPO, underlining Arm’s importance in cloud computing. AWS manufactures its own processing chip called Graviton, using Arm’s design. Arm is seeking to raise between $8 billion to $10 billion and is in talks with IntelAlphabet (NASDAQ:GOOGL, Nvidia (NASDAQ:NVDA), Apple (NASDAQ:AAPL) and Samsung Electronics (USOTC:SSNHZ). The IPO will strengthen Arm and help SoftBank recover its Vision Fund. After the failed sale to Nvidia, Arm prospered, focusing on higher royalty servers and PCs.

Alphabet (NASDAQ:GOOGL) – A US judge has rejected Google’s attempt to dismiss a lawsuit for invasion of privacy by secretly tracking the internet usage of millions. Judge Yvonne Gonzalez Rogers stated that there was no explicit consent. $5 billion class action continues in defense of privacy.

Zoom Video Communications (NASDAQ:ZM) – Zoom Video, a former work-from-home favorite, is now taking a hybrid approach, calling employees back to the office twice a week. While many companies opt for more in-person presence, Zoom believes this balance is most effective in driving innovation and global support. After success during the pandemic, the company is looking to expand its software toolset, while facing post-pandemic challenges and changing work trends.

Taiwan Semiconductor Manufacturing (NYSE:TSM) – TSMC’s $3.83 billion investment in Germany promotes a closer relationship between Taiwan and Europe, offering political advantages. Faced with pressure from China, the investment signals Taiwan’s goodwill towards Europe. The investment will also strengthen bilateral relations as TSMC expands globally with factories in the US and Japan. Taiwan seeks continued cooperation in semiconductors, awaiting progress on a bilateral investment agreement with the European Union.

Nvidia (NASDAQ:NVDA) – Nvidia has released the enhanced version of the Grace Hopper Superchip AI chip, providing increased high-bandwidth memory to power generative AI applications such as ChatGPT. This will allow larger AI models to work without interconnecting multiple systems, improving GPU performance. The new configuration will be available in the second quarter of next year.

WeWork (NYSE:WE) – WeWork faces doubts about its operational continuity, with three board members stepping down and its shares falling more than 16% in Wednesday’s premarket. The company warned of the need for additional capital in the next 12 months. Despite past efforts to restructure debt, the departure of top executives and the search for a new CEO persist.

Dell Technologies (NYSE:DELL) – Dell Technologies stock got a boost amid a challenging day for technology stocks following a positive review from Morgan Stanley. Analyst Erik Woodring pointed out that the company is gaining prominence in the server market for generative artificial intelligence applications. While there are constraints on Nvidia’s supply of GPUs, Woodring sees potential for Dell to add up to $7 billion in revenue and improve its bottom line by 4-5%, driven by AI servers.

Walt Disney (NYSE:DIS) – Disney has created a team to explore artificial intelligence in its entertainment empire, despite resistance from Hollywood professionals. The group, formed before the writers’ strike, aims to develop AI applications internally and seek partnerships with startups. The company currently has 11 openings that require AI experience. Technology is seen as a way to control production costs and improve park experiences. Disney has a long history of technological innovation, including advances in mixed reality and animation. AI is also a hot topic in Hollywood.

Penn Entertainment (NASDAQ:PENN) – Disney-owned ESPN and casino owner Penn Entertainment will join forces to create ESPN Bet, a sports betting business. Penn will pay ESPN $1.5 billion in cash and about $500 million in stock for rights and promotion. The ESPN Bet brand will be adopted in legalized states where Penn operates.

Piedmont Lithium (NASDAQ:PLL) – Piedmont Lithium faced resistance in a meeting with North Carolina officials over its proposed lithium mine for Tesla (NASDAQ:TSLA). The project, more than two years on hold, has divided the community, addressing the tension between local resistance and the US quest for independence from Chinese minerals. While the company has expressed openness to helping affected neighbors, the lack of details shared has raised concerns in the community.

Boeing (NYSE:BA) – In July, Boeing delivered fewer aircraft than Airbus due to logistical challenges and supply chain disruptions, particularly affecting the 737 MAX jet. 737 MAX deliveries have dropped to 32 due to support and supply issues. Boeing plans to increase production, but foresees continued challenges. Boeing’s 2023 gross orders total 579. In other news, Boeing said that Brazil, already a world leader in biofuels, can play an important role in supplying sustainable aviation fuel (SAF). With vast agricultural capacity, the country is well positioned to help decarbonize aviation as the industry aims to achieve net zero emissions by 2050. IATA estimates that SAFs could encompass 65% of efforts to meet the target. Gol (NYSE:GOL), a Brazilian airline, sees the provision of SAF as an urgent challenge to achieve this goal.

Ferrari (NYSE:RACE) – Chinese women make up 26% of Ferrari sales in China over the past five years, outpacing other nations. The trend is driven by training events and social media as Ferrari capitalizes on rising demand in the post-pandemic Chinese luxury market.

Stellantis (NYSE:STLA) – United Auto Workers (UAW) union leader Shawn Fain has rejected Stellantis’ proposals, criticizing excessive concessions. The suggestions involve cuts in health care, vacations for new hires and 401(k) contributions. Stellantis’ quest for cutbacks is driven by the electric transition. Current contracts expire in September. In other news, US auto safety regulators are investigating whether 1.1 million older Ram 1500 pickup trucks need to be recalled due to power steering issues. In addition, the Italian government plans to agree a broad plan for the automotive industry until 2030, with Stellantis and other groups by the end of 2023. The proposal seeks to increase vehicle production to one million per year, involving discussions on production, R&D, labor costs, energy and sustainability.

Ford (NYSE:F), BYD (USOTC:BYDDY) – Ford’s factory in Brazil, closed two years ago, could be revived by Chinese electric vehicle maker BYD. BYD’s proposed reactivation of Camaçari illustrates Brazilian President Lula’s strategy of attracting Chinese investment to boost industry and jobs, differing from the US approach.

Yellow Corp (NASDAQ:YELL) – The sale of Yellow’s assets is attracting significant bidders, possibly surpassing the $1.4 billion secured debt. Shareholders can get paid if no significant unsecured debt creditors arise, according to Fox Business. The trucking company filed for Chapter 11 bankruptcy on Monday. The International Brotherhood of Teamsters union called for reforms to US bankruptcy laws after Yellow’s bankruptcy, seeking to protect workers. The union argues that 22,000 members have been left unemployed despite concessions. The proposed legislation would prioritize work and retirement arrangements.

Novo Nordisk (NYSE:NVO) – Novo Nordisk, maker of Wegovy, revealed that an extensive study highlighted the cardiovascular benefits of the highly effective obesity treatment. This gave the Danish company a boost, reinforcing its image beyond just a lifestyle drug. The popular Wegovy has raised Novo Nordisk’s hopes for greater coverage and acceptance. Test results could influence insurers and health authorities to roll out the cost of Wegovy to a wider audience.

Emergent BioSolutions (NYSE:EBS) – Shares of Emergent BioSolutions are down more than 4% in premarket Wednesday after the company opted to eliminate 400 jobs and reduce activity at some facilities, focusing on core products such as Narcan nasal spray and anthrax vaccines. The restructuring aims to move out of contract drug development and save more than $100 million annually.

Carlyle Group (NASDAQ:CG) – The Carlyle Group will acquire a minority stake in Quest Global Services, valuing it at $2 billion. The transaction involves the departure of investors Bain Capital (NYSE:BCSF) and Advent International, with the repurchase of shares by Quest Global. Carlyle will use its own and bank financing.

KKR (NYSE:KKR),  Synovus Financial (NYSE:SNV) – KKR acquired a premium automotive loan portfolio from Synovus Bank worth $373 million. The investment aligns with KKR’s asset strategy. Regional banks are selling loan portfolios to reduce risk and improve liquidity, following the sectoral crisis. Ares Management (NYSE:ARES) also closed a similar deal in June.

Earnings

Rivian (NASDAQ:RIVN) – Rivian Automotive has raised its annual production projections and said it has sufficient funding through 2025, underlining its cost control. Demand for its electric pickup trucks and SUVs holds, setting it apart from smaller competitors that have faced recent bankruptcies. In the second quarter, the company generated revenue of $1.12 billion, beating Wall Street estimates of $1 billion according to Refinitiv data. Rivian posted a smaller quarterly loss. In addition, it delivered 12,640 vehicles between April and June, exceeding analysts’ estimates of 11,000 units. CEO RJ Scaringe indicated a solid financial position, despite the reduction of the cash balance to $9.26 billion. The company seeks to reduce dependence on suppliers, while keeping an eye on supply chain challenges.

Hond Motor (NYSE:HMC) – Honda Motor announced a quarterly profit increase of 78%, driven by US sales and the weaker yen. Operating profit reached $2.76 billion in the three months through June, beating expectations. 

Sony (NYSE:SONY) – Sony reported a drop in first-quarter profit due to weaker performances in its financials and film divisions. Operating profit fell 31% to $1.8 billion, in line with estimates. The film division suffered a two-thirds decline due to lower sales of television content and higher marketing costs for additional film releases. Sony has been focusing on entertainment and is also a leader in image sensors, seeking a partial spin-off in the financial unit and predicting record sales of PlayStation 5 consoles.

Bumble (NASDAQ:BMBL) – Bumble forecast weak quarterly revenue due to competition from Match Group (NASDAQ:MTCH), which owns Tinder. Bumble’s operating costs increased by more than 7%, reflecting investments in development and marketing. Second-quarter revenue grew 23.4% to $208 million. Third-quarter revenue was projected between $274 million and $280 million. Total paying users increased to 3.6 million.

Lyft (NASDAQ:LYFT) – Lyft indicated a competitive price doubling to rival Uber (NYSE:UBER), negatively impacting equities. The competitive pricing strategy reduced Lyft’s revenue per active user by 5%. CEO David Risher envisions profitability through the end of 2023. Second-quarter revenue was $1.02 billion, with adjusted EBITDA of $41 million. On an adjusted basis, it earned 16 cents per share, compared to an estimated loss of 1 cent. The company plans to eliminate primetime pricing for a more consistent structure.

Upstart Holdings (NASDAQ:UPST) – Upstart suffered an 18.1% drop in pre-market trading due to a lower-than-expectation earnings and revenue forecast for the third quarter. The $140 million revenue forecast is below expectations of $155.3 million, and adjusted pre-tax earnings came in at $5 million, below the $9.6 million expected by analysts.

Doximity (NYSE:DOCS) – Doximity is down 25.9% premarket after announcing layoffs of 10% of its staff (approximately 100 employees) and revising its 2024 revenue outlook downwards to $452-468 million, compared to the previous estimate of $500-506 million.

Akamai Technologies (NASDAQ:AKAM) – Akamai Technologies beat estimates with second-quarter adjusted earnings, driven by revenue of $936 million, up 4%. Adjusted earnings were $1.49 per share, up 10% from a year ago and nine cents above Wall Street estimates. Shares are flat premarket despite the company expanding its focus into security software and cloud computing.

Under Armor (NYSE:UAA) – Under Armor beat first-quarter expectations with unexpected earnings and better-than-expected sales due to discounting and lower cost pressures. The discounting strategy helped maintain demand despite lower gross margins. The company maintains its 2024 outlook. Quarterly revenue fell 2.4% to $1.32 billion, just above analysts’ estimate of $1.30 billion. Earnings of 2 cents a share for the quarter beat estimates of a loss of 2 cents a share, according to Refinitiv data.

Marqeta (NASDAQ:MQ) – Marqeta reassured investors by renewing its four-year contract with Block (SQ, S2QU34), boosting its latest earnings. The deal extends the partnership to power the Cash App debit card through June 2027, sending Marqeta shares up 13.5% in Wednesday’s premarket. The company also reported an increase in revenue, with a net loss of $58.8 million and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $824,000.

TakeTwo Interactive (NASDAQ:TTWO) – Take-Two Interactive Software Inc revealed reduced results and predictions, but highlighted the next iteration of “Grand Theft Auto”. The company, known for franchises such as “Red Dead Redemption” and “NBA2K”, predicts a quarterly loss of $1 to 90 cents a share, below estimates indicating the expectation for “GTA VI”. Take-Two also posted a loss of $206 million in the first fiscal quarter, but expects a tipping point in fiscal 2025.

Toast (NYSE:TOST) – Toast Inc. were up 14.2% in premarket trading on Wednesday after the restaurant tech company beat last-quarter revenue expectations and posted positive free cash flow for the first time since its initial public offering. Revenue increased to $978 million and the company reported free cash flow of $39 million, driving sustainable growth.

Super Micro Computer (NASDAQ:SMCI) – Shares in Super Micro Computer were down 10.8% premarket due to the lower-than-expected outlook. The AI-centric server company has forecast increased spending to support artificial intelligence technology. For the first quarter, it estimated adjusted earnings of $2.75 to $3.50 on revenue of $1.9 billion to $2.2 billion. In the last quarter, Super Micro had beaten expectations, buoyed by optimism in AI, with the stock rising 323% in 2023.

Nextdoor Holdings (NYSE:KIND) – Local social media-focused Nextdoor Holdings reported better-than-expected financial results, reversing revenue declines from the previous two quarters. With second-quarter revenue of $57 million, up 4% from last year, and a net loss of $35.4 million, the company beat analysts’ estimates. Nextdoor expects positive revenue growth for the year, with improved adjusted EBITDA margin and accelerated growth in the second half. Stocks are stable in premarket trading.

IAC Inc (NASDAQ:IAC) – IAC reported lower-than-expected financial results due to weak advertising sales as it seeks recovery in its Dotdash Meredith and Angi segments of the home repair services market. Second-quarter revenue was $1.11 billion, down 18% year-over-year. Dotdash Meredith’s revenue was down 15% and Angi was down 27%.

GlobalFoundries (NASDAQ:GFS) – Second-quarter revenue reached $1.845 billion, near the top of the company’s forecast range of $1.81 billion to $1.85 billion, but down 7% year-over-year. Adjusted earnings of 53 cents a share were also close to the forecast of 46 to 54 cents. Adjusted Ebitda totaled $668 million, down 15% year-over-year. Silicon wafer shipments were down 9% year-on-year. For the third quarter, GlobalFoundries projects revenue of $1.825 billion to $1.87 billion, on adjusted earnings of 46 to 54 cents a share, below Wall Street expectations.

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