US Index Futures and European markets were lower on Monday
morning after weaker data from China added to pressure for stimulus
on the Asian giant.
By 6:57 AM, Dow Jones (DOWI:DJI) futures were down 70
points, or -0.20%. S&P 500 futures were down -0.12%, while
Nasdaq-100 futures were down -0.02%. The 10-year Treasury
yield is at 3.781%.
In the second quarter, China recorded Gross Domestic Product
(GDP) growth of 6.3%, below analyst expectations of
7.3%. However, there was a positive variation in industrial
production (+4.4%), surpassing forecasts. Retail sales, in
turn, had a positive change of 3.1% in June on the same basis of
comparison, against a forecast of 3.2%. These weaker GDP and retail
sales data put pressure on the Chinese market, leading to
expectations of additional stimulus by the government.
In Europe, markets are also falling due to the slowdown of the
Chinese economy and the impact on the commodity sectors, as China
is a major consumer of base metals.
On Monday’s American economic agenda, the Empire State
Manufacturing Index data for May will be released at 8:30
am. The highlight of the week will be retail sales data,
industrial production and weekly jobless claims, in addition to the
earnings season, which picks up steam this week.
In commodities markets, West Texas Intermediate crude for August
is down -1.42% to settle at $74.35 a barrel. Brent crude for
September is down -1.44% near $78.72 a barrel. Iron ore
futures traded in Dalian, China, fell 0.89% to $115.95 a tonne,
reverberating the weaker data from the Chinese economy.
By Friday’s close, the Dow was up 113.89 points, or 0.33%, to
34,509.03 points. The S&P 500 fell 4.62 points, or 0.10%,
to 4,505.42 points. The Nasdaq Composite dropped 24.87 points,
or 0.18%, to 14,113.70 points. American stock markets recorded
continuous gains boosted by the positive results disclosed by
important banks, such as Citigroup, JP Morgan Chase, BlackRock and
Wells Fargo. These numbers exceeded market expectations,
standing out as the main indicators of the day. In addition,
Michigan’s confidence index also surprised positively, reinforcing
the idea of a “soft landing” in the US economy, that is, a
greater probability that the Federal Reserve (Fed) will be able to
control inflation without causing major damage.
In front of Monday’s corporate results, the earnings of Guaranty
Trust Bank (USOTC:GUAA), First Bank (Hamilton) (NASDAQ:FRBA),
Equity LifeStyle Properties (NYSE:ELS) and Home Bancorp
(NASDAQ:HBCP) will be released.
On Tuesday, Morgan Stanley (NYSE:MS), Bank of America
(NYSE:BAC), Lockheed Martin (NYSE:LMT) and Prologis (NYSE:PLD) will
be the highlights of the day.
On Wednesday, the most anticipated reports will be Tesla
(NASDAQ:TSLA), Goldman Sachs (NYSE:GS), IBM (NYSE:IBM), Netflix
(NASDAQ:NFLX) and United Airlines (NASDAQ:UAL).
Thursday will bring results from Taiwan Semiconductor
Manufacturing (NYSE:TSM), Johnson & Johnson (NYSE:JNJ), Newmont
(NYSE:NEM) and American Airlines Group (NASDAQ:AAL).
American Express (NYSE:AXP) will end the week on Friday.
Wall Street Corporate Highlights for Today
Microsoft (NASDAQ:MSFT) – Microsoft has
reached an agreement to keep Call of Duty on PlayStation following
its acquisition of Activision
Blizzard (NASDAQ:ATVI). This is aimed at
alleviating concerns about the merger’s impact on competition, with
Microsoft pledging to keep the game available on multiple
platforms. In other news, Microsoft claimed that Chinese
hackers stole one of its digital keys and exploited a flaw in the
code to steal emails from US government agencies. The company
is evaluating the incident and new security models, in response to
the criticism received.
Amazon (NASDAQ:AMZN) – Amazon Prime
members spent a record $12.7 billion during the two-day event,
including purchases for goods and services such as food delivery,
travel and healthcare. The expansion into services
demonstrates Amazon’s attempt to add more value and strengthen its
United Parcel Service (NYSE:UPS) – UPS
said Friday that it is committed to reaching an agreement with the
truck drivers’ union before Aug. 1.
Intel (NASDAQ:INTC), Qualcomm (NASDAQ:QCOM)
– The CEOs of Intel and Qualcomm plan to visit Washington this week
to discuss China policy. They will meet with US officials to
address issues such as market conditions and export
controls. Other semiconductor industry CEOs may also be in
attendance. Possible tightening of export rules would hurt
companies, which rely on sales to China for research and
JPMorgan Chase (NYSE:JPM) – According to
strategists at JPMorgan Chase, it is too early to buy eurozone
stocks relative to US stocks. They expect further weakness in
the region, due to declining growth policy and the possibility of
disappointments in economic activity. The team also cited
lower bond yields and falling earnings expectations as possible
downside factors. In addition, the weakness of the Chinese
economy and concerns about stimulus are also cited as obstacles for
UBS (NYSE:UBS) – The committee responsible
for disputes in the CDS (Credit Default Swaps) market has
determined that UBS will be the successor to Credit Suisse after
the banks merge. This implies that UBS will become the new
benchmark entity for outstanding CDSs without major market impacts
unless new credit events occur. In other news, UBS Group has
decided to retain EY as an external auditor, expanding its role to
include Credit Suisse accounts from 2024. PwC will continue to
audit Credit Suisse accounts until 2023.
Santander (NYSE:SAN) – Santander is
accelerating the growth of its investment banking by hiring at
least 50 bankers, mainly in the US. The aim is to become a
relevant player in the sector, focusing on leveraged finance and
corporate services for multinational companies. The bank is
seeking to reduce its reliance on subprime car loans in the US.
Charles Schwab (NYSE:SCHW) – Charles
Schwab is expanding its services to retail customers with account
balances in excess of $1 million. These clients will now have
access to a dedicated financial advisor at no additional cost,
along with additional benefits such as special offers at Schwab
Bank, expanded lending options and access to experts in tax
planning, trusts and estate planning. This change is intended
to prevent Schwab’s high-net-worth clients from being lured away by
competing full-service financial advisors.
Coinbase (NASDAQ:COIN) – Coinbase said in a
blog post on Friday that retail customers in four US states –
California, New Jersey, South Carolina and Wisconsin – will not be
able to pledge new cryptocurrencies for the staking program. This
is due to proceedings initiated by states contesting the
service. However, cryptocurrencies already staked prior to
orders issued on June 6 will not be affected. In June, ten
states accused Coinbase of violating state securities laws through
its staking program. In other news, ARK Invest, led by Cathie
Wood, took profits on the recent rally in Coinbase Global shares, a
record 24.5% surge in Coinbase shares last Thursday, selling nearly
half a million shares. However,
Tesla (NASDAQ:TSLA) – Tesla has finally
built its first Cybertruck at its Austin, Texas factory after two
years of delays. The launch of the electric vehicle will allow
Tesla to compete in the lucrative electric truck market in the US
alongside Ford (NYSE:F) and Rivian (NASDAQ:RIVN). In other
news, Tesla skeptics are rethinking their stance after its
impressive $500 billion gain this year. Bloomberg’s MLIV Pulse
conducted a survey that found that 53.7% of respondents expressed
concerns about competition from rival EV makers over the next two
years. 25.6% of respondents pointed to Elon Musk’s
unpredictable behavior as a risk to Tesla shareholders.
General Electric (NYSE:GE) – Toshiba
(USOTC:TOSYY) plans to establish a domestic supply chain for
offshore wind in partnership with General Electric. Japan is
expanding its renewable energy capacity, with plans to install up
to 45 GW of offshore wind power by 2040. The supply chain will
involve around 100 small and medium-sized
enterprises. Production is expected to start in 2026.
Nikola (NASDAQ:NKLA) – Shares in Nikola
Corp rose 14% on Friday after a short squeeze boosted the electric
truck maker’s share prices. Nikola’s recent deal to sell
electric vehicles and buy low-carbon hydrogen has increased
investor interest, resulting in record stock trading. The
company also saw an increase in EV sales in the second quarter,
indicating a positive sign for the startup.
Chevron (NYSE:CVX) – Chevron is
comfortable buying liquefied natural gas (LNG) from the US on
long-term contracts rather than building its own export
facility. The company has signed agreements with Cheniere
Energy (AMEX:LNG) and Venture Global LNG to diversify its risk and
provide an outlet for natural gas coming from its Permian
holdings. Chevron balances LNG investments with other drilling
opportunities and projects in the Eastern Mediterranean, Argentina
and West Africa. The company is not overly concerned about
Venture Global LNG’s startup issues.
Airlines (NASDAQ:AAL), Jetblue (NASDAQ:JBLU)
– American Airlines and JetBlue Airways announced on Friday that
they will begin the shutdown of their Northeast Alliance on July
21, following a court order in May. The two airlines are
working to minimize customer disruption and allow customers to
accumulate frequent flyer credits for already booked travel.
United Airlines (NASDAQ:UAL) – United
Airlines and its pilots have reached a labor agreement, resulting
in a significant pay increase for pilots. The four-year
contract includes cumulative increases of 34.5% to 40.2% in
salaries, reflecting the pilot shortage in the
industry. Demand for pilots in the United States is expected
to outstrip supply by 2027.
MoonLake Immunotherapeutics (NASDAQ:MLTX)
– MoonLake Immunotherapeutics, a developer of treatments for
inflammatory skin conditions, is considering a sale. The
company is at an early stage of talks with drug makers interested
in a possible acquisition. If successful, MoonLake will break
into a market dominated by larger peers such as Novartis AG
(NYSE:NVS) and AbbVie Inc (NYSE:ABBV). No deal has been
confirmed so far. On Friday’s news, MoonLake stock ended up
8.4% at $54.27, bringing the company’s market value to $3.3
Pfizer (NYSE:PFE) – The United States
Federal Trade Commission (FTC) has requested additional information
and documents relating to Pfizer’s proposed acquisition
of Seagen (NASDAQ:SGEN). Pfizer closed a
$43 billion deal to acquire Seagen, but recent antitrust scrutiny
has investors on edge. Seagen still expects to complete the
merger in late 2023 or early 2024.
Eli Lilly (NYSE:LLY) – Eli Lilly announced
the acquisition of Versanis for up to $1.93 billion to strengthen
its position in the weight loss treatments market. The deal
gives Eli Lilly access to an experimental obesity drug being
jointly tested with rival Novo
Nordisk (NYSE:NVO). The
weight loss drug market is expected to reach $100 billion within a
decade. Versanis’ drug, bimagrumab, acts directly on adipose
cells without reducing appetite or causing loss of lean body mass,
and is also in the early stages of testing for a potential
treatment of heart failure in obesity.
Frontier Communications (NASDAQ:FYBR) –
Frontier Communications is moving toward its goal of connecting 10
million locations with fiber optics, after a tumultuous period that
included bankruptcy and pressure on older technologies. The
company has a new management team and an updated balance
sheet. Frontier is building a high-speed network and cutting
costs, aiming for market penetration of at least 45%.
Chipotle Mexican Grill (NYSE:CMG) –
Chipotle Mexican Grill is testing a new collaborative robot called
Autocado to cut and peel avocados, making guacamole
faster. The company is also developing the Chippy robot to
make tortilla chips.
AT&T (NYSE:T), Telephone
Systems (NYSE:TDS), Frontier
Communications (NASDAQ:FYBR) – AT&T, Frontier
Communications and Telephone and Data Systems have been downgraded
to a “Neutral” rating of “Buy” by Citigroup, due to potential risks
exposure to legacy lead-sheathed cable.
Ericsson (NASDAQ:ERIC) – Barclays
downgraded Ericsson’s “Equal Weight” rating to “Overweight” and
maintained its “Equal weight” rating for Nokia (NOK, NOKI34),
following warnings from both companies.
Chewy (NYSE:CHWY) – Shares in Chewy rose
5,3% in premarket trade to reach $40,00. Analysts at Goldman
Sachs upgraded the online pet retailer’s stock rating from
“Neutral” to “Buy” and also raised the price target to $50 from
Netflix (NASDAQ:NFLX) – UBS analyst John
Hodulik recently raised his price target for Netflix stock from
$390 to $525, suggesting an additional upside potential of nearly
20%. Hodulik is confident that the second quarter results, to
be released on Wednesday, will exceed the company’s
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