The S&P 500 futures are down 28 points (0.5% below fair value), Nasdaq 100 futures are down 58 points (0.3% below fair value), and Dow Jones Industrial Average futures are down 291 points (0.7% below fair value).
Early trading shows a negative bias due to ongoing consolidation and political uncertainty around the French election, which has also pushed European indices lower.
Treasury yields are slightly down due to a flight-to-safety bid. The 10-yr note yield is down four basis points to 4.20%, and the 2-yr note yield is down one basis point to 4.68%.
Today's economic releases:
- 08:30 ET: May import prices (prior 0.9%) and nonfuel import prices (prior 0.7%); May export prices (prior 0.5%) and nonagricultural export prices (prior 0.7%)
- 10:00 ET: Preliminary June Univ. of Michigan Consumer Sentiment (consensus 73.0; prior 69.1)
Corporate news:
- Adobe (ADBE, Financial) 521.50, +62.76, +13.7%: Beats by $0.09, reports revenues in-line, guides Q3 EPS above consensus, revenues below consensus, guides FY24 EPS above consensus, revenues in-line
- RH (RH) 244.19, -32.86, -11.9%: Misses by $0.27, reports revenues in-line, guides Q2 revenues below consensus, reaffirms FY25 revenues guidance
- Tesla (TSLA, Financial) 185.15, +2.68, +1.5%: Shareholders approve moving incorporation to Texas and CEO Elon Musk's $56 billion pay package
- Gamestop (GME) 28.78, -0.34, -1.2%: Roaring Kitty increased Gamestop stake
- Microsoft (MSFT) 438.39, -3.19, -0.7%: President Brad Smith said the company is responsible for recent security failures; decided against introducing "recall" AI feature next week
- Boeing (BA, Financial) 178.69, -2.01, -1.1%: FAA investigating counterfeit titanium in some Boeing and Airbus jets
Overnight developments:
Today's News
Tesla (TSLA, Financial) shareholders have overwhelmingly approved CEO Elon Musk's massive corporate pay package, with 77% voting in favor. This translates to 1.76 billion votes for the package, 528.9 million against, and 20.6 million abstaining. Additionally, Tesla's proposal to re-domesticate to Texas from Delaware was also approved by a significant margin. The decision now rests with the Delaware Court of Chancery.
MicroStrategy (MSTR, Financial) has successfully priced its private offering of $700 million in convertible senior notes due 2032, up from the initially planned $500 million. The notes will bear interest at 2.25% per annum and can be converted to cash, shares, or a combination thereof at the company's discretion. The initial conversion price is set at approximately $2,043.32 per share.
Nucor (NUE, Financial) has issued downside guidance for its Q2 earnings, citing weaker performance at its steel mills segment due to lower average selling prices and slightly reduced volumes. The company expects Q2 EPS to be between $2.20 and $2.30, significantly lower than the $5.81 reported last year and below the analyst consensus of $3.00.
Adobe (ADBE, Financial) shares surged 14% following its impressive Q2 results and strong outlook for Q3 and FY2024. The company expects Q3 revenue to be between $5.33 billion and $5.38 billion, slightly below the consensus of $5.4 billion, and non-GAAP EPS between $4.50 and $4.55, beating market expectations.
Bank of America (BAC, Financial) received an upgrade to Outperform from Market Perform by Keefe, Bruyette & Woods. Analyst David Konrad expects a net interest income inflection in Q4 2024, driven by back book repricing and commercial yields. The analyst raised his 2024 EPS estimate to $3.37 and 2025 EPS estimate to $3.65.
FedEx (FDX, Financial) and Caterpillar (CAT, Financial) announced increased dividend payouts this week. FedEx raised its dividend by 9.5% to $1.38 per share, while Caterpillar increased its dividend by 8.5% to $1.41 per share. Oracle (ORCL, Financial) and Dell Technologies (DELL, Financial) also declared dividends.
Twilio (TWLO, Financial) saw its shares fall 3% in premarket trading after Morgan Stanley downgraded the stock to Equal-Weight from Overweight. Analyst Meta Marshall cited a lack of top-line catalysts over the next 12 months and noted that the majority of operating leverage has already been achieved.
Visa (V, Financial) and Mastercard (MA, Financial) are facing a likely rejection of their proposed $30 billion settlement in a long-running dispute over swipe fees. Judge Margo Brodie indicated that the settlement does not appear to provide sufficient relief and plans to issue a written decision soon.
Boeing (BA, Financial) and Airbus (OTCPK:EADSF) are under investigation due to concerns over the authenticity of titanium components used in some recently manufactured jets. Spirit AeroSystems (SPR) and the FAA are investigating the issue, which involves falsified documents verifying the material's authenticity.
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