The S&P 500 futures are up 11 points, 0.2% above fair value. Nasdaq 100 futures are up 94 points, 0.5% above fair value. Dow Jones Industrial Average futures are flat, trading roughly in line with fair value.
The market starts the new month with a positive bias. NVIDIA (NVDA) is up 3.0% after announcing product updates, boosting the broader market. Meme stocks are seeing solid pre-open gains due to speculation that Keith Gill might have a large position in GameStop (GME, Financial), which is surging 80% before the open.
Treasury yields are slightly lower, supporting equities. The 10-year note yield is down four basis points to 4.47%, and the 2-year note yield is down three basis points to 4.86%.
Today's economic calendar includes:
- 9:45 ET: Final S&P Global U.S. Manufacturing PMI (prior 50.0)
- 10:00 ET: April Construction Spending (prior -0.2%) and May ISM Manufacturing Index (prior 49.2%)
Overseas, final May Manufacturing PMI readings from China, Japan, South Korea, and India showed ongoing expansion, while Australia's reading remained in contraction. Final May Manufacturing PMI readings indicated ongoing contraction in most major European economies, with Spain and the U.K. showing modest growth.
In corporate news:
- GameStop (GME 41.22, +18.17, +78.5%): Up sharply premarket due to speculation that Keith Gill could have a large position in the specialty retailer.
- NVIDIA (NVDA 1,129.99, +33.64, +3.1%): Announces several product updates; Bank of America reiterated its Buy rating and maintained a $1,500 price target.
- Waste Management (WM 206.85, -3.88, -1.8%): To acquire Stericycle (SRCL, Financial).
- CAVA Group (CAVA 90.50, -2.05, -2.2%): Downgraded to Neutral from Overweight at JPMorgan.
- Best Buy (BBY 87.00, +2.18, +2.8%): Upgraded to Buy from Sell at Citigroup.
- AMD (AMD 169.37, +2.47, +1.5%) and Taiwan Semiconductor Manufacturing (TSM 154.54, +3.50, +2.3%): Working on new chip design.
Reviewing overnight developments:
Today's News
Meme stock GameStop (GME, Financial) surged more than 70% in early premarket trade on Monday as influential trader Keith Gill, known online as Roaring Kitty, revealed a significant stake in the company valued at around $115.7 million. Other meme stocks also rallied, with AMC (AMC, Financial) +25%, Koss (KOSS, Financial) +13%, BlackBerry (BB, Financial) +7%, and Tupperware (TUP, Financial) +9% higher. Gill shared a screenshot on Reddit showing he'd bought 5 million GameStop shares at $21.27 apiece, as well as 120,000 call options worth $65.7 million with a strike price of $20 set to expire on June 21. The trader also posted an image of a green reverse card from the popular card game Uno on social media platform X.
J.P. Morgan weighed in on the restaurant sector, upgrading Krispy Kreme (DNUT, Financial) to an Overweight rating. The firm believes increased accessibility will allow the company to fully participate in the $650 billion global indulgence market. J.P. Morgan also recommended investors add to positions in McDonald's (MCD, Financial), citing its financially strong franchisees who can navigate through challenging sales cycles.
Analysts at Bernstein lowered their estimates of Boeing’s (BA, Financial) free cash flow due to reduced plane deliveries to China, delays with the 787 Dreamliner, and a grimmer outlook for its defense business. The analysts now expect Boeing to burn through $3.6 billion in 2024, though $1.2 billion will be recovered the following year. Despite the challenges, Boeing delivered 21 of its popular 737 Max jets from production in May, double the average from February to April. Bernstein cut its price target on Boeing to $215 a share from $230.
Advanced Micro Devices (AMD, Financial) unveiled its latest artificial intelligence processors and provided a roadmap for AI chip development over the next two years. CEO Lisa Su introduced the AMD Instinct MI325X accelerator, available in Q4 2024, and the MI350 series accelerators based on AMD CDNA 4 architecture, expected in 2025. AMD also previewed the 5th Gen AMD EPYC server processors and introduced the AMD Ryzen AI 300 Series and Ryzen 9000 Series processors for mobile and desktop PCs, respectively.
Pershing Square Capital Management, controlled by billionaire Bill Ackman (Trades, Portfolio), sold a 10% common equity stake in Pershing Square Holdco for $1.05 billion to a group of investors including Arch Capital Group (ACGL, Financial). The sale is seen as a precursor to an IPO that could take place as soon as next year. The company completed an internal reorganization of its ownership structure in connection with the sale.
Virgin Galactic Holdings (SPCE, Financial) rose in premarket trading, influenced by a broad push higher by meme stocks. The stock moved directionally with GameStop (GME, Financial) due to its high short interest position. Shares of Virgin Galactic rallied 6.28% in premarket action to $0.92, with volume more than 5X normal premarket activity. Short interest stands at 27.8% of the total float.
Macquarie downgraded UiPath (PATH, Financial) to Neutral from Outperform, reducing the price target to $12 from $29. The downgrade follows the sudden departure of CEO Rob Enslin, a guidance cut, and underperformance in the company's go-to-market strategy. Analysts also raised concerns about the impact of Generative AI on traditional robotic process automation (RPA).
OneWater Marine (ONEW, Financial) is in discussions to purchase its larger rival MarineMax (HZO, Financial) in an all-cash deal. MarineMax soared almost 20% in premarket trading, while OneWater dropped 5%. OneWater has made a $40 a share offer for MarineMax, representing a 40% premium to MarineMax's closing price on Friday. The combined company would be valued at $2.5 billion, including debt.
Paramount Global's (PARA, Financial) stock rose over 6% after Skydance Media offered a 26% premium for nonvoting shares, with an option for shareholders to roll into the deal. The $15 per share offer allows Skydance and its backers to contribute funds to purchase National Amusements and add cash to the balance sheet.
Stericycle (SRCL, Financial) surged 16.4% pre-market after Waste Management (WM, Financial) agreed to acquire the provider of regulated medical waste and compliance services for $62/share in cash, representing a total enterprise value of ~$7.2 billion. The acquisition is expected to generate more than $125 million in annual run-rate synergies.
Google (GOOGL, Financial) completed the expansion of its cloud infrastructure and data center in Singapore, bringing its total investment in the country to $5 billion. The data center employs over 500 people and powers services like Google Search and Maps. Google also plans to invest $2 billion in Malaysia to build its first data center and a Google Cloud hub in the country.
