US Index Futures operated higher on Wednesday, with investor
expectations that US consumer inflation will reach the lowest level
since 2021.
By 07:01 AM, Dow Jones (DOWI:DJI) futures were up 28
points, or 0.08%. S&P 500 futures were up 0.16%, while
Nasdaq-100 futures were up 0.19%. The 10-year Treasury yield
is currently at 3.95%.
On Wednesday’s American economic agenda, the president of the
Richmond Fed, Thomas Barkin, will talk about inflation at 8:30
am. At the same time, the CPI report for June and the CPI core
will be released.
At 09:45 am, Minneapolis Fed President Neel Kashkari and ECB
Chief Economist Philip Lane will speak on a panel.
At 10:30 am, oil inventories for the week up to 7/7 will be
released.
At 1:00 pm, the president of the Fed of Atlanta, Raphael Bostic,
will participate in an institutional event. At the same time,
the US government will hold another Treasury auction. However,
this time, the offer’s target bonds are 10-year bonds. This
Tuesday, the government placed US$ 40 billion in three-year bond
auctions, with a cut rate of 4.534%.
At 2:00 pm, the Fed will release the Beige Book, and the Senate
Banking Committee will vote on nominees Philip Jefferson, Lisa
Cook, and Adriana Kugler for the council. At 4 pm, Cleveland
Fed President Loretta Mester will join the panel.
European markets are also trading higher. A highlight is
the report from the central bank of England, released before the
market open, which states that British banks are robust enough to
support households and companies during the financial squeeze.
Elsewhere in commodities markets, West Texas Intermediate crude
for August was up 0.19% at $74.97 a barrel. Brent crudes for
September are up 0.04% near $79.43 a barrel. Iron ore futures
traded in Dalian, China, followed the movement seen yesterday and
rose 2.6%, to US$114.69 per tonne, reflecting the expectation of
stimuli from the Chinese government to the sectors.
By Tuesday’s close, international markets posted modest gains
boosted by Chinese media reports of new stimulus and expectations
of a weaker consumer price index (CPI) today. The Dow Jones
jumped 317.02 points or 0.93% to 34,261.42 points. The S&P
500 rose 29.73 points or 0.67% to 4,439.26 points. The Nasdaq
Composite rose 75.22 points or 0.55% to 13,760.70
points. Chinese media have released a series of articles
suggesting that the government is preparing to implement additional
measures to support the Chinese real estate and business sector as
a whole. These measures were well received in the West after
markets opened on Tuesday, resulting in gains in European and US
stocks.
The second-quarter US corporate earnings season kicks off this
week, with PepsiCo (NASDAQ:PEP) and Delta Air
Lines (NYSE:DAL) on Thursday, and major banks such
as JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C) and Wells Fargo
(NYSE:WFC) presenting its financial numbers on Friday.
Wall Street Corporate Highlights for Today
Microsoft (NASDAQ:MSFT), Activision
Blizzard (NASDAQ:ATVI) – Microsoft has overcome
obstacles in its purchase of Activision Blizzard, with a US judge
approving the $69 billion deal and the UK regulator reconsidering
its opposition. The US FTC has until Friday to appeal.
VMware (NYSE:VMW), Broadcom (NASDAQ:AVGO)
– Broadcom is expected to receive conditional EU antitrust approval
for its proposed acquisition of VMware on Wednesday. The
company addressed concerns by offering an interoperability
brokerage to Marvell
Technology (NASDAQ:MRVL). The deal is still
under scrutiny by authorities in the US and UK.
IBM (NYSE:IBM) – IBM is considering using
its own artificial intelligence chips to lower the operating costs
of its cloud computing service. The company plans to use the
AI chip called the Artificial Intelligence Unit in its new
“watsonx” cloud service. IBM hopes to solve past challenges,
such as high costs, with the energy efficiency of its own
chips. The chip is manufactured by Samsung Electronics and IBM
already has working prototypes. The focus is on the inference
phase rather than training the AI systems.
Amazon (NASDAQ:AMZN) – Amazon is
contesting its inclusion as a very large online platform under EU
online content rules. The company has filed a challenge at the
General Court in Luxembourg claiming that it does not fall into
that category. The outcome of the case could influence other
tech giants. In other news, Amazon’s cloud division is looking
to differentiate itself from competitors in artificial intelligence
through competitive pricing, leveraging its own chips and reducing
computing costs. The company is focused on offering a more
affordable solution and highlights its approach towards data
privacy and accuracy.
Nvidia (NASDAQ:NVDA) – Arm is seeking
Nvidia as a key investor in its planned initial public offering
(IPO) as it moves towards becoming a key part of the growth of
artificial intelligence. Valuation discussions are ongoing,
with Nvidia seeking a smaller stake than Arm wants. Japanese
firm SoftBank, which bought Arm in 2016, is seeking to reduce its
stake through the IPO. Both Arm and Nvidia are in contact with
US regulators regarding this significant investment.
Alphabet (NASDAQ:GOOGL) – Google has shut
down an artificial intelligence chatbot aimed at Gen Z. The
project, called “Bubble Characters,” has been deprioritized in
favor of work on Bard. It’s not clear if concerns about the
safety of children were a factor. Google continues to develop
other projects, including a medical chatbot. In other news,
the work of external contractors at companies like Appen
and Accenture (NYSE:ACN) is crucial to the
quality of responses from the Bard AI chatbot powered by
Google. These workers are responsible for reviewing and
improving responses, but they face precarious conditions and tight
deadlines. Google relies on these evaluators to improve its
AI, but workers have raised concerns about their workload and
inadequate pay. The company is focused on pushing AI forward,
but contractors are unhappy with their working conditions.
Meta Platforms (NASDAQ:META) – Adam
Mosseri, head of Instagram, stated that the site is not geared
towards politics or hard news. However, if regulators
challenge the Threads app on antitrust concerns, political concerns
are inevitable. The FTC is focused on making it easy to
unsubscribe, and the difficulty of deleting a Threads account may
attract their attention. In addition, Meta’s data collection
policies are under scrutiny. The FTC is looking into Meta’s
market share in the social media industry, but it’s still unclear
whether Threads poses an antitrust problem. Regulators will
watch the platform before taking any action, which is likely to
come within the next year.
Alphabet , Meta —
Senator Elizabeth Warren and a group of lawmakers are pushing the
Biden administration to investigate illegal sharing of customer
data by tax preparation software companies with Google and
Meta. They allege that tax preparation companies and
technology platforms have been negligent in protecting taxpayers’
sensitive information. Lawmakers called for legal and policy
action to prevent future incidents.
Salesforce (NYSE:CRM) – Salesforce
announced a 9% average price increase for some of its cloud and
marketing tools, marking its first increase in seven
years. The company has invested significantly in research and
development, including generative artificial intelligence
capabilities. The increase comes at a time when revenue growth
for cloud services is slowing and customers are looking to optimize
their spending. The new prices will apply to new and existing
customers.
Applied Materials (NASDAQ:AMAT) – Applied
Materials has released the Vistara system, its first major upgrade
in over a decade, to improve chip manufacturing. The system
allows greater flexibility, combination of vacuum chambers and data
analysis through artificial intelligence to reduce energy
consumption. Vistara has already shipped to memory chip makers
and has attracted interest from computer chip makers.
Shutterstock (NYSE:SSTK) – Shares of
Shutterstock were up 9.1% on Tuesday after expanding their
partnership with OpenAI. The photo repository company has
signed a new six-year agreement to provide high-quality training
data for OpenAI models, cementing its position as a leading
provider in this industry.
Walt Disney (NYSE:DIS) – Walt Disney is
considering selling or finding a partner for its TV and digital
businesses in India. Discussions are at an early stage and
there are no potential buyers or partners yet. The company
faces competitive pressure from Reliance Industries’ JioCinema
platform.
Roku (NASDAQ:ROKU), Shopify (NYSE:SHOP)
– Shares of Roku closed up 11.4% on Tuesday after announcing a
partnership with Shopify to enable direct TV
purchases. Viewers will be able to purchase advertised items
by pressing “OK” on the Roku remote using the Roku Pay payment
platform. The partnership aims to boost direct-to-consumer
e-commerce.
Bank of America (NYSE:BAC) – Bank of
America has agreed to pay $250 million in fines and damages to
settle allegations of double fee charges, withholding credit card
benefits and unauthorized account opening by customers. The
bank also agreed to refund $100 million to affected consumers.
JPMorgan Chase (NYSE:JPM) – JPMorgan Chase
plans to lay off 63 employees in Jersey City, New Jersey, in
September, according to an issued notice. The bank said it is
working to relocate the affected employees and has 560 vacancies
open in the region. The move is part of a regular review and
previous layoffs have taken place across multiple departments.
SoFi Technologies (NASDAQ:SOFI) – SoFi
Technologies CEO Anthony Noto has expressed confidence that his
company will become one of the top 10 financial institutions in the
country. While the company’s stock has risen significantly
this year, it’s still below its debut price. Noto sees strong
growth ahead, focusing on high-income customers. The company
is also exploring the use of artificial intelligence to improve its
products and services.
Merrill Lynch (NYSE:PYT) – Merrill Lynch
was fined $12 million by regulators for failing to report about
1,500 suspicious activities over more than a decade. The
brokerage used a limit of $25,000 for reports instead of the
required amount of $5,000. Merrill Lynch agreed to pay $6
million to settle the SEC’s charges and received an additional $6
million fine from FINRA. The company said it has improved its
processes and training in response to the case.
Coinbase (NASDAQ:COIN) – Cboe Global
Markets modified applications to list and trade shares of bitcoin
funds, including one from Fidelity, with Coinbase surveillance
sharing agreements. The SEC has rejected bitcoin ETFs in the
past, but including the deals could help meet regulatory
standards. Coinbase is contesting an SEC lawsuit. In
other news, ARK Innovation ETF (AMEX:ARKK), a fund led by Cathie
Wood, has sold 132,152 shares of Coinbase amid the cryptocurrency
exchange’s stock price surge. Those shares were worth about
$11.8 million. The sale represents just a small portion of the
fund’s total stake in Coinbase.
Dynasty
Gold (TSXV:DYG), Nike (NYSE:NKE)
– Nike Canada and Dynasty Gold are under investigation in Canada
for allegedly using or benefiting from forced labor in their China
operations. The investigations were initiated following
complaints filed by a coalition of civil society
organizations. This is the first investigation of its kind
launched by the Canadian agency responsible for corporate
ethics. The other complaints are still being
evaluated. Both Nike Canada and Dynasty Gold deny the
allegations.
Coty (NYSE:COTY) – Kim Kardashian is in
talks to buy back her minority stake in SKKN By Kim, the beauty
company she sold to Coty three years ago, according to the Wall
Street Journal.
Shopify (NYSE:SHOP) – Shopify
Inc. launched a cost calculator built into its calendar app to
cut down on unnecessary meetings. The tool estimates the value
of each meeting based on duration and number of
participants. The company hopes to cut thousands of hours of
meetings and encourage a change in mindset. The average time
spent in meetings per employee has already decreased by 14%.
Bed Bath & Beyond (NASDAQ:BBBY) – Buy
Buy Baby stores are on the verge of closing after a final effort to
save the chain fails. Go Global Retail, which owns Janie and
Jack, was looking to buy Bed Bath & Beyond but has not reached
a valuation agreement with Bed Bath & Beyond’s main
lender. Dream on Me Industries acquired Buy Buy Baby’s assets
in an auction. The sale disappointed observers, including the
judge who oversaw the bankruptcy process.
Tesla (NASDAQ:TSLA) – Texas has again
postponed a vote on federally funded grants for electric vehicle
chargers due to resistance from some charging companies to include
Tesla’s standard. The vote is seen as a precedent for other
states, such as Washington and Kentucky, which are also considering
similar measures. The adoption of Tesla’s technology by
automakers such as Ford and General Motors has influenced other
companies to adopt the standard.
Faraday Future (NASDAQ:FFIE) – Faraday
Future announced the resignation of its interim chief finance
officer and disclosed errors in its financial statements for 2022
and the quarter ended March 2023. The company has appointed a new
interim chief financial officer and will provide updated
statements. Faraday Future faces cash issues and governance
disputes.
Ford Motor (NYSE:F) – The US National
Highway Traffic Safety Administration is investigating 346,000 Ford
Escape SUVs for a possible door assembly weld failure. Reports
indicate that the fault could result in doors opening inadvertently
while driving. Ford is cooperating with the
investigation. In other news, Ford executive Franck
Louis-Victor has been arrested on charges of assault and arson
after allegedly attacking his wife and threatening to set fire to
her designer handbags. Louis-Victor held senior positions at
Ford, but the company declined to comment on the incident.
United Airlines (NASDAQ:UAL) – United
Airlines Chief Executive Scott Kirby met with Acting FAA Chief
Polly Trottenberg after criticizing air traffic control. Kirby
struck a more positive tone towards the agency, praising her final
weeks on the job. The FAA is struggling with staffing problems
at air traffic control in New York, and airlines have been asking
for more hires. Kirby also apologized for using a private jet
during bad weather.
Boeing (NYSE:BA) – Boeing recovered from
production problems and delivered 60 passenger jets in June,
bringing the total to 266 aircraft in the first half. Although
it has faced production shortfalls, the company is on track to meet
annual delivery
targets. Rival Airbus (EADSY)
delivered 316 aircraft in the same period.
Ryanair Holdings (NASDAQ:RYAAY) – Ryanair
has decided to pull out of the UK Board of Aviation, citing a lack
of tangible benefits or reforms for passengers. The Council
was set up to address shared challenges, but Ryanair has described
it as a “conversation shop” with no effective action.
L3Harris (NYSE:LHX), Aerojet
Rocketdyne Holdings (NYSE:AJRD) – Senator Elizabeth
Warren and other lawmakers are urging the US Department of Defense
to carefully review L3Harris Technologies’ $4.7 billion contract
for Aerojet Rocketdyne Holdings. They expressed concern about
the influence of large defense contractors and potential damage to
existing operations.
Terex (NYSE:TEX) – Terex, a maker of
equipment for industries including construction, mining and
maintenance, announced that its board approved a 13% increase in
its quarterly dividend, now worth 17 cents a share. This is
the second time this year that Terex has increased its dividend,
following an increase to 15 cents in February.
Illumina (NASDAQ:ILMN) – Illumina was
fined more than $400 million by the European Union for violating
antitrust rules by proceeding with its acquisition of Grail
Inc. before regulatory approval. The European Commission
imposed a fine of 10% of Illumina’s annual revenue, in addition to
a symbolic fine of €1,000 on Grail. Illumina had already
provisioned funds to cover this potential fine.
Acadia Healthcare (NASDAQ:ACHC) – Shares
in Acadia Healthcare fell -2.4% in premarket trading on Wednesday
after the behavioral health services company announced it would
contest a $485 million award in an abuse lawsuit filed against the
company.
Gilead Sciences (NASDAQ:GILD) – Gilead
Sciences recently spent nearly $30 million to increase its stake in
two biotechnology companies. The company acquired further
shares in AlloVir (NASDAQ:ALVR)
and Arcus Biosciences (NYSE:RCUS),
strengthening its position as a major shareholder in both
companies. AlloVir expects to earn significant revenue from
its public offering. Gilead remains one of the largest
shareholders in AlloVir and the main shareholder in Arcus.
Market view
Cinemark (NYSE:CNK) – Research firm B.
Riley raised its rating for Cinemark from “Neutral” to “Buy” and
raised the stock price target to $23, up from $20
previously. As a result, Cinemark shares were up 3.6% in
premarket trade to settle at $16.52.
Affirm Holdings (NASDAQ:AFRM) – Shares in
Affirm Holdings closed up 10% on Tuesday at $16.21 after receiving
an increase in price target from $17 to $20 for Mizuho. The
company, known for its “buy now, pay later” model, is benefiting
from this positive momentum in the market.
Newell Brands (NASDAQ:NWL) – Shares in the
company rose 11% on Tuesday after Sharpie brand pens and Rubbermaid
products were rated “Buy” by Canaccord.
3M (NYSE:MMM) – Bank of America securities
analyst Andrew Obin upgraded 3M stock to “Hold” from “Sell” on
Tuesday. Its price target remains unchanged at $110 per
share. Obin sees some positive catalysts that could ease
pressure on equities.
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