US index futures were broadly flat in premarket trading on
Wednesday as traders await indicators such as Federal Reserve
minutes and industrial production.
By 6:53 AM, Dow Jones futures (DOWI:DJI) were up 3 points, or
0.01%. S&P 500 futures were up 0.01% and Nasdaq-100
futures were up 0.06%. The 10-year Treasury yield was at
4.186%.
On Wednesday’s US economic agenda, investors will follow at 8:30
am the preliminary building permit for July, which is projected to
have 1.46 million new orders. At 9:15 am, the industrial
production data for July will be released, with the consensus
predicting an increase of 0.30% on a monthly basis. At 10:30
am, the EIA releases last week’s oil inventories, which are
projected to drop by 2.5 million barrels.
The great expectation of the day is for the minutes of the last
meeting of the Open Market Committee (FOMC), which will be released
at 2 pm. At its July meeting, the Fed raised interest rates to
a range between 5.25% and 5.50%. The expectation on the part
of investors is that the document will bring clues about the
trajectory of interest rates, after the publication of recent data
that are used as benchmarks for monetary policy.
Mortgage rates in the US hit a 22-year high, resulting in a 29%
year-on-year drop in application volume. The 30-year average
interest rate rose to 7.16%. Demand for new homes has
increased, particularly among first-time buyers, driven by low-down
payment options. Refinances have dropped due to rising
rates.
In the UK, July inflation fell by 0.4% monthly, less than the
forecast 0.5%. However, core inflation increased by 0.3%,
beating the estimate of 0.2%. These figures raise concerns
that the Bank of England could raise interest rates.
In the euro zone, GDP grew by 0.3% in the second quarter
compared to the previous quarter, in line with
expectations. Annual growth was 0.6%. Contrary to
forecasts of a 0.10% decline, industrial production in June
increased by 0.5% month-on-month.
In Asian markets, the declines reflect concerns about China’s
economy, given recent disappointing numbers. In addition, JP
Morgan (NYSE:JPM) raised its forecast for corporate defaults in
emerging markets due to fears related to the Chinese real estate
sector, compounded by the financial difficulties of Garden
Country.
In the commodities market, West Texas Intermediate crude for
September fell -0.01% at $80.98 a barrel. Brent crude for
October fell 0.07% near $84.83 a barrel. Iron ore futures
traded in Dalian, China, were up 0.52% at $100.95 a tonne.
At the close of Tuesday, global financial markets started the
day on a downward trend, a trend that persisted until the end of
the session. European stock markets reacted negatively to
local economic indicators and tensions with China. The British
job market showed robust figures, raising concerns about possible
increases or maintenance of high interest rates. In China,
retail sales and industrial production disappointed, prompting the
PBoC to cut interest rates.
In the US, indexes took big losses for similar
reasons. Retail sales beat expectations, while the NY Fed’s
Empire Manufacturing Index signaled a sharp decline in
August. The Dow closed with a loss of 361.24 points or 1.02%
at 34,946.39 points. The S&P 500 closed down 51.86 points,
or 1.16%, at 4,437.86 points, and the Nasdaq Composite lost 157.28
points, or 1.14%, at 13,631.05.
Ahead of Wednesday’s corporate results, traders are watching
reports from Target (NYSE:TGT), Zim (NYSE:ZIM), JD.com (NASDAQ:JD),
TJX (NYSE:TJX). After the close, results will be announced for
Cisco Systems (NASDAQ:CSCO), Synopsys (NASDAQ:SNPS), Wolfspeed
(NYSE:WOLF), Stone (NASDAQ:STNE), Paycor (NASDAQ:PYCR), among
others.
Wall Street Corporate Highlights for Today
Apple (NASDAQ:AAPL) – Apple will start
production of the iPhone 15 in Tamil Nadu, diversifying its
manufacturing outside of China. Seeking to speed up
deliveries, the company reduced the difference between Indian and
Chinese operations. In addition to Foxconn, Pegatron and
Wistron will also assemble the iPhone 15 in India. Apple
expands its presence in India, benefiting from government
incentives and sees a growing market.
Amazon (NASDAQ:AMZN) – Amazon Pharmacy
will automatically apply discounts on over 15 insulin and diabetes
medications. Patients will no longer need to manually enter
manufacturer coupons. The aim is to facilitate access to
insulin at reduced prices.
Intel (NASDAQ:INTC), Tower
Semiconductor (NASDAQ:TSEM) – Intel and Tower
Semiconductor ended a proposed $5.4 billion deal due to lack of
regulatory approvals. Tower shares were down more than 10% in
premarket trading on Wednesday. Intel will pay Tower a $353
million termination fee. US-China tensions impact tech
deals. Pat Gelsinger, CEO of Intel, sought approval for the
deal in China and said Intel will continue to invest in its foundry
business. Intel’s foundry sales have grown, but demand for the
chips has declined.
Nvidia (NASDAQ:NVDA) – Shares of Nvidia
rose on Tuesday after two brokerages raised their price
targets. The high reflects optimism with artificial
intelligence and the demand for its components. Analysts
raised price estimates ahead of Nvidia’s quarterly
results. The company predicts higher revenue due to demand for
its AI chips, like those used in ChatGPT.
ASML (NASDAQ:ASML) – Samsung halved its
stake in ASML Holding NV in Q2, selling 3.55 million shares,
raising $2.2 billion. Samsung plans to strengthen its chip
manufacturing, rivaling Taiwan Semiconductor Manufacturing Co
(TSM).
VinFast (NASDAQ:VFS) – Vietnamese electric
vehicle maker VinFast soared on the Nasdaq, doubling its valuation
to $85 billion, outpacing Ford and GM. The debut followed a
merger with SPAC Black Spade. Despite initial slow sales, the
company plans to expand and revise its distribution
strategy. VinFast is developing a $4 billion factory in North
Carolina and faces competition from Tesla and Chinese
companies.
Thomson
Reuters (NYSE:TRI), The New York
Times (NYSE:NYT) – Company X, formerly Twitter, has
temporarily delayed access to links from sites such as Reuters and
The New York Times. The delay was noted and then
removed. The action comes after Elon Musk, new owner,
criticized certain news organizations. The cause of the delay
remains unclear.
Occidental Petroleum (NYSE:OXY) –
Occidental Petroleum has acquired technology provider Carbon
Engineering for $1.1 billion to develop carbon capture
sites. Direct air capture technology aims to remove CO2 from
the atmosphere for various uses, such as in the manufacture of
concrete and fuel.
Woodside Energy (NYSE:WDS) – Woodside
Energy reports “positive progress” in wage disputes at its LNG
facility in Australia, while unions indicate significant
differences. Around 99% of offshore workers voted for union
actions, which could affect LNG shipments and prices.
Chevron (NYSE:CVX) – Negotiations between
Chevron, Woodside Energy (NYSE:WDS) and Australian
unions on wages and conditions at LNG facilities may take time due
to the need for unions to consult their members. Workers at several
facilities consider the possibility of industrial actions,
including strikes. Experts see low risk of prolonged outages.
US Steel (NYSE:X) – Esmark Inc CEO James
Bouchard said he had the funds for US Steel Corp’s $7.8 billion bid
after Cleveland-Cliffs’ (NYSE:CLF) $7.3 billion
bid was rejected. Bouchard was revealed to have $10 billion in
cash, with no debt at Esmark. He receives advice from an
undisclosed international bank. US Steel invited Esmark to join the
negotiation process.
TPG Inc (NASDAQ:TPG) – The TPG Capital
group has expressed interest in buying a stake in Ernst & Young
(EY) consultancy, according to the Financial Times. After
regulatory concerns, EY considered splitting its audit and
consulting units, but later abandoned the idea.
BlackRock (NYSE:BLK) – Investors such as
BlackRock and Allianz own significant holdings in Country Garden,
the Chinese real estate company facing default risk. Although
records show large exhibitions, holdings may have changed. The
company’s potential default could impact Chinese debt markets.
UBS (NYSE:UBS) – A court in Moscow has
banned UBS and Credit Suisse from selling shares in their Russian
branches following a request from Zenit Bank, which fears losses if
they exit Russia over a 2021 loan related to Intergrain and
subsequent sanctions.
Goldman Sachs (NYSE:GS) – Senior managers
at Goldman Sachs openly criticized CEO David Solomon. John
Waldron, chairman of Goldman, became the focus of attention,
pressured to decide whether to support Solomon or differentiate
himself. As dissatisfaction mounts over Solomon’s forceful
leadership and unpopular decisions, Waldron struggles to find his
place, constantly being watched for signs of falling out, according
to Bloomberg.
Bank of America (NYSE:BAC) – The Argentine
peso will face further devaluations, according to strategists at
Bank of America. It is forecast to weaken to 545/dollar in
2021 and 1,193 in 2024. The recent 18% devaluation has caused
increased demand for dollars in the parallel market. The
situation intensifies political and economic uncertainty.
HSBC (NYSE:HSBC) – Bangladesh’s equity
market, buoyed by rising consumption and foreign investment, could
offer big returns, according to analysis by HSBC. Compared to
India and Vietnam in past decades, profits are expected to increase
by 20% over the next three years.
Boeing (NYSE:BA) – Boeing has appointed
Alvin Liu, a former auto industry executive, as head of its China
unit, aiming to improve relations amid geopolitical
tensions. China is a vital aviation market. Liu replaces
Sherry Carbary and has experience with Ford and Chrysler in
China.
Southwest Airlines (NYSE:LUV) – Southwest
Airlines has reached a tentative agreement with the union of 17,120
transportation workers, setting an hourly wage of $36.72. The
contract also provides better retirement medical coverage, 401(k)
benefits, and vacations at premium rates.
Fisker (NYSE:FSR) – Startup Fisker has
reached an agreement
with Tesla (NASDAQ:TSLA) to adopt its
charging standard, allowing access to the Supercharger network by
2025. Many automakers are adopting Tesla’s design, predicted to
lead the market, replacing the CCS standard.
Tesla (NASDAQ:TSLA) – Tesla has cut prices
for its Model S and Model X in China for the second time this week,
intensifying concerns about a price war in the auto
sector. These cuts put pressure on other automakers, such as
BMW and Mercedes-Benz, to adopt similar measures.
Avis Budget Group (NASDAQ:CAR) – Avis
Budget was fined $275,000 by New York for failing to rent vehicles
to customers without a credit card, in violation of state law.
Lordstown Motors (NASDAQ:RIDE) – Lordstown
Motors has agreed to pay $40 million to Karma Automotive after
being accused of stealing proprietary technology. The deal
includes $5 million in royalties from Karma’s intellectual
property. Lordstown faces bankruptcy and the case will go to
trial in September.
Apollo Global
Management (NYSE:APO), Yellow
Corp (NASDAQ:YELL) – Apollo Global Management is
selling a $500 million loan to Yellow Corp, waiving the financing
extension. The loan was acquired by Citadel. Yellow
reviews alternative loan offers and faces debt payments through
2024.
Alibaba (NYSE:BABA) – DingTalk, Alibaba’s
platform, will separate from its cloud division, operating as a
wholly owned subsidiary. Although rumors suggest a possible
IPO, the date has not been confirmed. The separation will not
affect DingTalk’s services or its technology collaboration with the
cloud division.
Bain Capital (NYSE:BCSF) – Bain Capital has
acquired Brazilian steakhouse Fogo de Chão for around $1.1
billion. The sale provided Rhone Capital with a triple return
on its $560 million investment in 2018. Fogo, founded in 1979,
operates in 76 locations globally.
Ralph Lauren (NYSE:RL) – Canadian regulator
CORE is investigating Ralph Lauren’s Canadian unit and GobiMin for
possible links to Uyghur forced labor in China, following
complaints from 28 organizations. Similar investigations
involve Nike Canada and Dynasty Gold.
Roku (NASDAQ:ROKU) – Roku and NBCUniversal have
agreed to launch ad-supported channels for reruns of popular
shows. This deal expands Roku’s free TV streaming and benefits
NBCUniversal. Shares in both companies surged, outperforming
the S&P 500. FAST channels, which offer ad-supported content,
are a growing trend.
FedEx (NYSE:FDX) – FedEx is pushing its
delivery service providers to beef up safety after a surge in
accidents nearly tripled insurance costs over the past
decade. The company requires the installation of cameras and
sensors in vehicles and improvement in training. Providers
with low safety scores may face competition on routes. This
move aligns with CEO Raj Subramaniam’s plan to integrate company
units. But contractors say FedEx doesn’t address high driver
turnover, which can lead to more accidents. Safety has become
a central issue for the company’s bottom line.
Earnings
Target (NYSE:TGT) – Target lowered its
full-year forecast after quarterly sales below expectations. A
drop in comparable sales and earnings per share between $7 and $8
are expected. While in-store sales improved in July, concerns about
inflation and future trends persist. Second-quarter earnings
beat expectations, hitting $1.80 a share.
Tencent Music Entertainment
Group (NYSE:TME) – Tencent Music Entertainment,
compared to Spotify, saw its quarterly revenue grow by 5.5% due to
more subscriptions. However, it projects a drop in future
revenue from tighter controls on live streaming, following China’s
anti-gambling measures. The company reached 100 million paying
users. Shares are up 1.78% in premarket trading on
Wednesday.
Coherent (NYSE:COHR) – Coherent was down
21.8% in premarket trading on Wednesday after delivering
lower-than-expected first-quarter and full-year forecasts. The
company anticipates adjusted earnings of between 5 and 20 cents per
share and revenue of between $1 billion and $1.1 billion,
contrasting with analysts’ expectations of 47 cents per share and
$1.17 billion in revenue. Coherent indicated that his estimate
does not consider a significant improvement in the macroeconomic
scenario, including in China.
DLocal (NASDAQ:DLO), MercadoLibre (NASDAQ:MELI)
– DLocal reported a 24.77% increase in pre-market transactions
after delivering better-than-expected quarterly results and
confirming forecast annual revenue of between $620 million and $640
million. In addition, Pedro Arnt was appointed co-CEO of the
company, having previously served as CFO of MercadoLibre, a major
Latin American e-commerce player.
H&R Block (NYSE:HRB) – After reporting
quarterly earnings of $2.05 a share, beating Wall Street’s forecast
of $1.88 per share according to Refinitiv, tax preparers are
holding steady premarket. H&R Block had revenue of $1.03
billion, above analysts’ estimate of $1.01 billion. In
addition, the company raised its quarterly dividend by 10.3%, from
US$ 0.29 to US$ 0.32, and also revised upward its forecasts for the
full year.
Cava (NYSE:CAVA) – After releasing a
second-quarter report with earnings that beat forecasts, shares in
the Mediterranean restaurant chain rose 11.88% in premarket trading
on Wednesday. The fast-casual company reported revenue of
$172.9 million, above analysts’ forecast of $163.2 million, as per
FactSet data. In relation to earnings per share, US$ 0.21 was
recorded, contrary to the expectation of FactSet analysts who
predicted a loss of US$ 0.02 per share.
Stride (NYSE:LRN) – Stocks were flat in
premarket trading Wednesday after the education technology company
reported better-than-expected results for the fiscal fourth
quarter. GAAP earnings of $1.01 per share exceeded FactSet
analyst expectations by 14 cents. Likewise, revenue of $483.5
million beat the estimate of $460.7 million.
AgEagle Aerial Systems (AMEX:UAVS) – The
company reported in the second quarter a loss per share lower than
that recorded in the same period of 2022. AgEagle had a loss of 5
cents per share, which is 2 cents lower than the previous
year. However, the company’s quarterly revenue of $3.3 million
was lower than last year. Stocks are stable in premarket
trading.
Nu Holdings (NYSE:NU) – Nubank announced
record revenue in the second quarter, adding 4.6 million
customers. Revenue grew 60% to $1.9 billion. The CEO,
David Vélez, pointed out that half of Brazilian adults are
customers. The bank’s shares have rallied, rising 95% this
year, and are up 3.92% in premarket trading on Wednesday.
Mercury Systems (NASDAQ:MRCY) – Defense
stocks were down 12.83% in premarket trading on Wednesday after
fiscal fourth-quarter results missed Wall Street’s
forecasts. Mercury reported earnings of 11 cents a share,
excluding certain items, and revenue of $263.2 million. By
comparison, FactSet had analysts forecast earnings of 52 cents per
share and revenue of $278.8 million for the
quarter. Additionally, Mercury’s full-year estimates were
below FactSet consensus expectations.
Palo Alto Networks (NASDAQ:PANW) – Palo
Alto Networks surprised Wall Street by announcing quarterly results
on a Friday after markets closed. Analysts are divided on what
this indicates. The company, recently added to the S&P 500
index, may have a big DoD contract in the pipeline.
Beam Global (NASDAQ:BEEM) – Sales reached
$17.8 million, up about 380% year-over-year and above the $13.5
million analysts projected. Beam is still unprofitable, but
the company posted a loss per share of 32 cents, slightly better
than the 34 cent loss Wall Street expected. Profitability is
expected around 2026.
MercadoLibre (NASDAQ:MELI)
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