US index futures were higher in premarket trading on Thursday as
investors reflected on the Federal Reserve minutes released
yesterday, in which members did not rule out further tightening to
curb inflation.
By 6:45 AM, Dow Jones futures (DOWI:DJI) were up 63 points, or
0.18%. S&P 500 futures were up 0.16% and Nasdaq-100
futures were up 0.15%. The 10-year Treasury yield was at
4.308%.
On Thursday’s American economic agenda, investors will follow,
at 8:30 am, the release of unemployment insurance claims for the
week, in which analysts expect 240,000 new claims. At the same
time, the Philadelphia Fed industrial activity index will be
released, which has an estimated retraction of 10 in August.
In the European bloc, there was a surplus in the trade balance
in June, reaching 23 billion euros, surpassing the initial
expectation of 18.3 billion euros. However, with a monthly
drop of 0.5% in exports and 5.6% in imports, the bloc’s economy
shows signs of slow recovery.
In Asian markets, there were mixed results after the
announcement that the Fed is concerned about inflation in the US,
suggesting the possibility of maintaining the upward trend in
interest rates.
In Japan, the trade balance figures for July pointed to a
deficit of 78.7 billion yen, contrary to expectations that forecast
a surplus of 24.6 billion yen. The highlight is the annual
reduction of 0.30% in exports and 13.5% in imports in the last
month. These Japanese numbers reflect the challenges faced by
China, considering that the country is one of Japan’s main trading
partners, along with the US, the most robust economy globally.
In commodities markets, West Texas Intermediate crude for
September was up 0.82% to trade at $80.03 a barrel. Brent
crude for October was up 0.84% at $84.15 a barrel. Iron ore
futures traded in Dalian, China, rose 4.34% to $104.67 a tonne,
with the rally coming after recent losses caused by concerns over
possible reductions in steel production and uncertainty in the
Chinese real estate market.
By Wednesday’s close, US stock markets had another day of
decline as investors weighed strong comments from Federal Reserve
leaders at their latest meeting. The Dow fell 180.65 points or
0.52% to 34,765.74 points. The S&P 500 fell 33.53 points
or 0.76% to close at 4,404.33 points, while the Nasdaq fell 156.42
points or 1.15% to 13,474.63 points.
Big tech companies such as Meta (NASDAQ:META), Amazon
(NASDAQ:AMZN) and Tesla (NASDAQ:TSLA) have weighed as they are most
affected by rising Treasury yields. The yield on the 10-year
bond closed at close to 4.3%. Minneapolis Fed President Neel
Kashkari pointed out that inflation is still “very high,” a view
that is supported by other members, as indicated by the FOMC
minutes. After those minutes, the chance of keeping interest
rates at the next Fed meeting in September remained the same,
around 90%. In Europe, the focus was on UK inflation, which
was slightly higher than forecast. Meanwhile, in China, even
with several incentive actions by the government, concerns
persist.
Ahead of Thursday’s corporate results, traders are watching
reports from Walmart (NYSE:WMT), Bili Bili (NASDAQ:BILI), Tapestry
(NYSE:TPR), Lumentum Holdings (NASDAQ:LITE), Gambling
(NASDAQ:GAMB), among others. After the close, results will be
released from Applied Materials (NASDAQ:AMAT), Bill.com
(NYSE:BILL), Farfetch (NYSE:FTCH), Ross (NASDAQ:ROST), and
more.
Wall Street Corporate Highlights for Today
Alphabet (NASDAQ:GOOGL) – Alphabet’s
Verily Life Sciences faces higher-than-forecast operating losses
and plans further cost cuts. With losses of $568 million in
2022 and revenues of $559 million, the company has already reduced
staff and products. The unit, part of Alphabet’s Other Bets,
seeks to control spending and achieve profitability.
Paramount Global (NASDAQ:PARA) – Paramount
Global has canceled the sale of a majority stake in BET Media
Group, including VH1, BET and BET+. The decision, according to
the Wall Street Journal, came after offers of US$ 2-3 billion did
not significantly improve its balance sheet.
Sinclair Broadcast Group (NASDAQ:SBGI) –
Sinclair is accused in a lawsuit of misappropriating $1.5 billion
from its subsidiary Diamond Sports Group prior to its
bankruptcy. Diamond, responsible for broadcasting games from
major sports leagues, claims that Sinclair practiced a “nefarious
strategy”. It is alleged that Sinclair saddled Diamond with
debt and embezzled funds, leading to its decline. Sinclair
denies the allegations.
Exor (EU:EXO), Philips (NYSE:PHG)
– Exor acquired 15% of Philips healthcare group for $2.8 billion
without the usual disclosures, using derivative agreements through
Goldman Sachs (GS, GSGI34). The transaction, undisclosed under
Dutch regulations, was viewed positively by Philips.
Goldman Sachs (NYSE:GS) – Options with
expirations of less than 24 hours, known as 0DTE, intensified the
slide in the S&P 500, sending it down 0.4% in 20 minutes,
according to Goldman Sachs. Goldman’s Scott Rubner pointed out
that market makers had to react quickly due to the frantic movement
of these options. The growing popularity of these contracts
may have magnified market swings. Rubner warns of
deteriorating market liquidity, and rising volatility could
discourage trend-driven investment strategies.
Nubank (NYSE:NU) – David Velez, co-founder
of Nu Holdings Ltd., sold 3% of his stake in Nubank, raising $191
million. Proceeds will fund his foundation focused on
education in Latin America. The sale follows the company’s
positive quarterly results, whose shares have appreciated 88% this
year.
Visa (NYSE:V) – Visa is under
investigation by the US Department of Justice over alleged
anti-competitive practices regarding its tokenization technology
and retailer charges. This technology replaces account
information with digital identifiers.
Tesla (NASDAQ:TSLA) – Texas has decided to
require Tesla technology at electric vehicle charging stations to
access federal funds, moving forward with Elon Musk’s plans to
standardize the technology in the US. This decision will
influence other states on adoption.
General Motors (NYSE:GM) – General Motors
is leading a $60 million investment in startup Mitra Chem to
develop more accessible battery chemistry. California-based
Mitra Chem uses AI to create materials for lithium-ion
batteries. The partnership will focus on active iron-based
cathode materials for future GM batteries, seeking more sustainable
and affordable alternatives. The new batteries may be used in
GM vehicles in the second half of this decade.
Delta Air
Lines (NYSE:DAL), American
Airlines (NASDAQ:AAL) – Delta Air Lines and American
Airlines will expand flights to China, capitalizing on growing
demand in the Asia-Pacific region. This follows the US-China
decision to double permitted flights. Delta will connect via
China Eastern Airlines.
Walmart (NYSE:WMT) – Kathryn McLay,
formerly CEO of Walmart’s Sam’s Club unit, has been promoted to
lead the company’s $100 billion international business amid the
economic downturn in China and global inflation. Succeeding
Judith McKenna, who retires after 27 years, McLay will take over on
September 11.
Amazon (NASDAQ:AMZN) – Amazon has
introduced a 2% fee for sellers who do not use its logistics
services, surprising many, especially with the impending US
antitrust lawsuit against the company. This fee targets
“Seller Fulfilled Prime” merchants. Many sellers interpret
this as pressure to use Amazon logistics. This new tariff
could significantly affect profit margins, forcing some to raise
prices. Critics argue that Amazon wields too much power over
its sellers, while the company says the fee helps cover operating
costs.
Nike (NYSE:NKE), Adidas (USOTC:ADDYY)
– In the final of the World Cup between England and Spain, Nike and
Adidas bet on the demand for jerseys of the winning
team. Months ago, both predicted production based on
historical patterns and trends.
Tyson Foods (NYSE:TSN) – US-based food
manufacturer Tyson Foods plans to sell its poultry segment in
China. The company, which engaged Goldman
Sachs (NYSE:GS) as a consultant, exceeded
expectations by reporting annual sales of approximately $1.1
billion. Several multinationals have scaled back their
operations in China, facing challenges such as slower economic
growth and local competition. Tyson, active in China since
2001, covers the entire production chain, from creation to
distribution.
Albertsons (NYSE:ACI), Kroger (NYSE:KR)
– Officials in seven US states have requested that Kroger’s $24.6
billion acquisition of Albertsons, valued at $24.6 billion, be
halted, citing concerns that it would consolidate nearly a quarter
of the market for US food retail.
Ball Corp (NYSE:BALL) – British defense
company BAE Systems has agreed to acquire Ball Corp’s aerospace
assets for $5.55 billion. Ball Corp intends to use the
proceeds to reduce debt and expand its global packaging
operations. The transaction is expected to close in the first
half of 2024. BAE expects this acquisition to boost its earnings
per share and margins.
Hawaiian Electric Industries (NYSE:HE) –
Hawaiian Electric shares declined nearly 14.5% in premarket trading
on Thursday. The drop happened after an article in The Wall
Street Journal informed that the company is talking with companies
focused on restructuring. Now, down about 55% for the week,
the stock is still reeling from Wall Street’s continuing concerns
about the company’s possible responsibility for the tragic Maui
fires.
Vinfast Auto (NASDAQ:VFS) – Shares of the
Vietnamese maker of electric cars lost approximately 10.4% in
pre-market Thursday. After an impressive rally of over 250% on
Tuesday, when VinFast made its market debut through a deal with
SPAC, there was a correction and the stock fell 18.7% on
Wednesday.
ArcelorMittal (NYSE:MTCN), US
Steel (NYSE:X) – World’s second-largest steelmaker
ArcelorMittal is considering a bid for US Steel Corp after reducing
its presence in the US in 2020. While under discussion, the offer
has not is certain and would face competition from existing
offerings in excess of $7 billion. The US Steel workers’ union
favors Cleveland-Cliffs and expresses concerns about
ArcelorMittal. ArcelorMittal’s decision challenges its
previous strategy of focusing on emerging markets and reducing
emissions.
Woodside
Energy (LSE:WDS), Chevron (NYSE:CVX)
– Woodside Energy and Chevron have reported no new updates on wage
disputes at large LNG facilities in Australia. About 99% of
offshore workers support union action, possibly leading to
strikes. The Offshore Alliance denounced working conditions on
the Woodside Angel Platform.
Manchester United (NYSE:MANU) – Manchester
United Plc have denied deciding to reinstate Mason Greenwood to the
first team following allegations in 2022. The Glazer family, who
own the club, have launched an investigation following the
allegations against Greenwood. The decision involves
consultation with various stakeholders, including fans and
sponsors. Fans protested Greenwood’s return, and while
sponsors such as Chevrolet and Ecolab had no comment, DHL expressed
confidence in the club’s management.
Earnings
Cisco Systems (NASDAQ:CSCO) – Shares in
the computer networking company are up 2.8% in premarket Thursday
after announcing fourth-quarter results that beat Wall Street
forecasts. The company reported adjusted earnings of $1.14 per
share, compared with the $1.06 forecast by analysts, according to
Refinitiv. Revenue was $15.2 billion, beating the forecast of
$15.05 billion.
Synopsys (NASDAQ:SNPS) – Shares rose 1.4%
premarket after the automatic electronics design company exceeded
fiscal third-quarter earnings forecasts. Synopsys reported
adjusted earnings of $2.88 per share, beating analysts’ estimates
by 14 cents, according to Refinitiv. Revenue, which hit $1.49
billion, also slightly beat projections. Additionally, on
Wednesday, the California-based company named Sassine Ghazi as the
new CEO and President, taking up the role on January 1.
Wolfspeed (NYSE:WOLF) – Shares fell 14.2%
premarket after the release of Wolfspeed’s fiscal fourth quarter
earnings report, which disappointed the market. The company
reported an adjusted loss of 42 cents per share, versus analysts’
expectations for a loss of 20 cents per share. Despite that,
Wolfspeed had revenue of $236 million, beating analysts’ projection
of $223 million, according to Refinitiv data.
Amcor (NYSE:AMCR) – Shares were flat
premarket after Amcor, which posted its lowest trading point in a
year on Wednesday, reported adjusted earnings of 19 cents a share
in its fiscal fourth quarter, beating analysts’ estimate of $0.18,
according to FactSet. However, Amcor’s revenue was lower than
expected, reaching US$ 3.67 billion, against the forecast of US$
3.79 billion.
Aegon (NYSE:AEG) – Insurer Aegon
reported a net loss of €199m at the end of June, attributing to
market volatility in the UK and Netherlands and investments in the
US. The solvency ratio dropped to 202%. Despite the
losses, operating capital generation exceeded expectations, with
growth of 42% in the Americas. The company has recently
restructured, shedding business in Central Europe and focusing more
on the US. Shares of Aegon were down 3.4% in premarket
Thursday.
TJX (NYSE:TJX) – As of Wednesday morning,
TJX Cos raised its 2024 outlook due to strong apparel sales and
growing demand for home furnishings. Demand at discount
retailers such as TJX has grown as inflation has cooled. Sales
at Marmaxx and HomeGoods also saw an increase, benefiting from the
bankruptcy of Bed Bath & Beyond and reduced freight
costs. TJX posted net income of $989 million, or 85 cents per
share, up from $810 million, or 69 cents per share, in the
prior-year period.
JD.com (NASDAQ:JD) – JD.com beat
second-quarter revenue expectations Wednesday morning, benefiting
from its emphasis on cheaper products amid an economic
slowdown. The company attracted more suppliers due to reduced
costs and expanded its product range. While competing with
rivals like Alibaba, JD.com has seen repeat customers. Revenue
grew 7.6% in the second quarter to $39.7 billion.
Grupo Aval (NYSE:AVAL) – Grupo Aval, the
Colombian financial conglomerate, posted a 75.4% drop in net income
in the second quarter, despite a 70% increase in interest
income. The decline was attributed to the appreciation of the
Colombian peso and lower margins.
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