S&P futures are up 5 points, trading 0.1% above fair value. Nasdaq futures are up 117 points, trading 0.6% above fair value. Dow Jones futures are down 122 points, trading 0.1% below fair value.
Contracts tied to the S&P 500 and Nasdaq 100 are higher after yesterday's record close, thanks to good inflation data and the Fed's latest move. Early gains are supported by pre-market rises in big tech and semiconductor stocks, following strong earnings from Broadcom (AVGO, Financial).
Broadcom (AVGO, Financial) is up 13% in pre-market trading. NVIDIA (NVDA) is also up 2.0% in sympathy.
Treasury yields are mostly unchanged. The 10-year note yield is up 2 basis points to 4.32%, still 11 basis points lower than earlier this week. The 2-year note yield is up 1 basis point to 4.76%, also 11 basis points lower for the week.
Investors will get the weekly jobless claims report and the May Producer Price Index at 8:30 ET.
Commodity futures are down: WTI crude oil is down 0.7% to $77.92/bbl, natural gas is down 1.9% to $2.99/mmbtu, and copper is down 0.8% to $4.53/lb.
In corporate news:
- Broadcom (AVGO, Financial) is up 13.4% after beating earnings and revenue estimates, guiding FY24 revenues above consensus, and announcing a 10-for-1 stock split.
- Tesla (TSLA, Financial) is up 6.9% as CEO Elon Musk says resolutions on his pay package and moving incorporation to Texas are passing by wide margins. Tesla aims to increase Model 3 pricing due to tariffs.
- Dave & Buster's (PLAY) is down 10.5% after missing earnings and revenue estimates, with comparable store sales decreasing 5.6%.
- Disney (DIS) is down 0.03% after reaching a 15-year expansion deal with Florida Governor Ron Desantis.
- Oxford Industries (OXM) is down 4.0% after missing earnings and revenue estimates, and guiding lower for Q2 and FY25.
- RTX (RTX) is up 0.1% after being awarded a $293 million US Special Ops Command contract.
- Microsoft (MSFT, Financial) is down 0.3% as OpenAI's annualized revenues double since late 2023.
- Signet Jewelers (SIG) is down 1.3% after beating earnings estimates, reporting in-line revenues, and reaffirming FY25 EPS guidance.
Reviewing overnight developments:
Today's News
Tesla (TSLA, Financial) saw a significant boost in early trading after Elon Musk hinted at the outcomes of key shareholder votes. Wedbush Securities' Dan Ives noted that the approval of Musk's 2018 compensation package and the company's move to Texas could eliminate a $20 to $25 overhang on the stock. The official results of the votes are expected later today, with an overwhelming retail presence likely playing a crucial role in the approvals.
Broadcom (AVGO, Financial) shares surged over 14% following its fiscal second-quarter results and guidance, which exceeded expectations. The semiconductor company also announced a 10-1 stock split, effective July 15, and raised its FY2024 revenue outlook to $51 billion, surpassing the consensus estimate of $50.58 billion. The company's board of directors declared the stock split, which further fueled investor optimism.
Apple (AAPL, Financial) has integrated OpenAI's ChatGPT into its devices without financial terms, believing the value offered to iPhone users outweighs monetary payments. This partnership, announced at Apple's annual developer's conference, could become costly for OpenAI, which pays Microsoft (MSFT, Financial) to host its chatbot on Azure. The integration is optional for users but could eventually add significant value to Apple's ecosystem.
Warren Buffett (Trades, Portfolio)'s Berkshire Hathaway (BRK.A) (BRK.B) continues to expand its stake in Occidental Petroleum (OXY, Financial), purchasing another 1.75 million shares at an average price of just above $60 per share. This brings Berkshire's total holdings in Occidental to over 252.3 million shares, representing a nearly 28.5% stake. Buffett's strategic acquisitions come as Occidental's shares trade near three-month lows.
IBM (IBM, Financial) has refiled its HSR notification with U.S. antitrust regulators for its planned $6.4 billion acquisition of HashiCorp (HCP, Financial). Following informal discussions with the DOJ and FTC, IBM withdrew and refiled its premerger notification, with the HSR waiting period now set to expire on July 12. HashiCorp shares ticked higher amid comments from IBM about the likelihood of antitrust approval.
AbbVie (ABBV, Financial) has signed a licensing agreement with Chinese biopharma FutureGen to develop FG-M701, a potential treatment for inflammatory bowel disease (IBD). AbbVie will receive an exclusive global license to develop, manufacture, and commercialize FG-M701 in exchange for $150 million in upfront and near-term milestone payments, with potential additional payments up to $1.56 billion.
Amazon (AMZN, Financial) has committed to investing $230 million in Amazon Web Services (AWS) credits for AI startups. This initiative aims to provide mentorship and education to early-stage generative AI startups, furthering their use of AI and machine learning technologies. The commitment will also support the second group of the AWS Generative AI Accelerator, offering up to $1 million in credits to top startups.
DraftKings (DKNG, Financial) announced the appointment of Erik Bradbury as its new chief accounting officer, effective August 12. Bradbury, who previously served as the senior vice president and chief accounting officer at IAC, will replace Alan Ellingson, who is leaving the company. The change is not due to any disagreement, according to DraftKings.
Sarepta Therapeutics (SRPT) traded higher following Pfizer's (PFE) announcement that its candidate for Duchenne muscular dystrophy (DMD) failed in a Phase 3 trial. Pfizer's gene therapy candidate did not meet the primary endpoint, while Sarepta's Elevidys, developed with Roche, is under FDA priority review. The FDA's decision on full approval for Elevidys is expected by June 21, 2024.
eBay (EBAY) is adding PayPal's (PYPL) Venmo as a payment option at checkout, expanding its payment method options. This move comes after eBay announced it would stop accepting American Express (AXP) cards due to high fees. Venmo will be available to U.S. buyers on eBay.com and the eBay app in the coming week, offering a popular payment method among Gen Z and Millennials.
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