The S&P 500 futures are down 10 points, the Nasdaq 100 futures are down 32 points, and the Dow Jones Industrial Average futures are down 70 points. Each is trading 0.2% below fair value.
Stock futures suggest a lower open, mainly due to losses in the semiconductor sector. NVIDIA (NVDA, Financial) is down nearly 2% pre-market. Micron (MU, Financial) is down almost 6% despite better-than-expected earnings and revenue, along with in-line Q4 EPS and revenue guidance.
Walgreens Boots Alliance (WBA, Financial) is also under pressure, with shares down 15% pre-market after disappointing earnings and guidance.
Treasury yields are slightly up from yesterday, adding to the downward pressure on stocks. The 10-year note yield is up one basis point to 4.33%, and the 2-year note yield is up one basis point to 4.76%.
In corporate news:
- Financial Select Sector SPDR Fund (XLF): Down 0.1% after Fed Stress Test showed 31 large banks have sufficient capital.
- Levi Strauss (LEVI): Down 15.4% after beating earnings by $0.05, in-line revenues, reaffirming FY24 guidance, and increasing dividend.
- Micron (MU, Financial): Down 5.7% after beating earnings by $0.14, beating on revenues, and providing in-line Q4 guidance.
- Walgreens Boots Alliance (WBA, Financial): Down 14.6% after missing earnings by $0.05, beating on revenues, and lowering FY24 EPS guidance.
- AeroVironment (AVAV): Down 7.1% after beating earnings by $0.21, beating on revenues, and providing in-line FY25 guidance.
- Int'l Paper (IP): Down 14.6% after Suzano (SUZ) decided not to pursue an acquisition.
- Apogee Enterprises (APOG): Up 7.0% after beating earnings by $0.40, in-line revenues, and guiding FY25 EPS above consensus.
- McCormick (MKC): Up 1.7% after beating earnings by $0.10, in-line revenues, and reaffirming FY24 guidance.
- Concentrix (CNXC): Up 2.2% after beating earnings by $0.06, beating on revenues, and providing mixed guidance.
Reviewing overnight developments:
Today's News
Amazon's (AMZN, Financial) Amazon Web Services could face a potential ban in Germany due to a patent dispute with R2 Semiconductor. This follows a similar injunction against Intel (INTC, Financial) earlier this year. R2 Semiconductor, largely owned by Dan Loeb's Third Point Ventures, is confident in winning the injunction against AWS as the technical arguments are identical to those in the Intel case. The lawsuit was filed in March, with a decision expected next year. R2’s lawyer, Volkmar Henke, stated that they have been winning all decisions so far.
Walgreens Boots Alliance (WBA, Financial) announced plans to close a significant number of underperforming stores and reduce its stake in primary-care provider VillageMD. CEO Tim Wentworth emphasized the need to focus on profitable parts of the business. This strategic shift includes launching a U.S. Retail Pharmacy action plan to enhance customer experience and realigning its U.S. Pharmacy and Healthcare segments.
Micron Technology (MU, Financial) shares fell 6% in premarket trading after issuing guidance in line with estimates, despite benefiting from the AI spending boom. Analysts noted that expectations were already high, making it difficult for Micron to impress. The company highlighted a multi-billion-dollar opportunity in high-bandwidth memory, particularly from its association with Nvidia (NVDA, Financial) and the use of HBM3e technology.
Apple's (AAPL, Financial) services business continues to bolster its gross margins, with Bernstein predicting a 50 basis points annual increase due to the shift towards services. Analyst Toni Sacconaghi noted that improving margins within services could add another 0-30 basis points, driven by the strength of the App Store, Advertising, and iCloud. Sacconaghi has an Outperform rating and a $240 price target on Apple.
Chewy (CHWY, Financial) struck a deal to repurchase $500 million worth of equity from BC Partners, in addition to its existing $500M share buyback program. Mizuho Securities analyst David Bellinger views this as an indicator of improving free cash flow, which could lead to capital returns. The company aims to achieve sustainable new customer growth as a key catalyst.
Rite Aid (OTC:RADCQ) is seeking bankruptcy court approval for its restructuring plan to cut $2B in debt and emerge from Chapter 11. The plan aims to pay creditors and resume operations. The company has closed over 500 stores and sold its Elixir business to MedImpact for $575M. A NJ bankruptcy judge will review the case on Thursday.
BP (BP, Financial) has implemented a hiring freeze and paused new offshore wind projects under new CEO Murray Auchincloss, who is shifting focus back to oil and gas operations. Auchincloss aims to prioritize projects that generate immediate cash flow, such as offshore wind in Britain and Germany, and expand investments in oil and gas assets in the Gulf of Mexico and U.S. shale basins.
Amazon's (AMZN, Financial) Amazon Web Services could face a potential ban in Germany due to a patent dispute with R2 Semiconductor. This follows a similar injunction against Intel (INTC, Financial) earlier this year. R2 Semiconductor, largely owned by Dan Loeb's Third Point Ventures, is confident in winning the injunction against AWS as the technical arguments are identical to those in the Intel case. The lawsuit was filed in March, with a decision expected next year. R2’s lawyer, Volkmar Henke, stated that they have been winning all decisions so far.
Micron Technology (MU, Financial) shares fell 6% in premarket trading after issuing guidance in line with estimates, despite benefiting from the AI spending boom. Analysts noted that expectations were already high, making it difficult for Micron to impress. The company highlighted a multi-billion-dollar opportunity in high-bandwidth memory, particularly from its association with Nvidia (NVDA, Financial) and the use of HBM3e technology.
Apple's (AAPL, Financial) services business continues to bolster its gross margins, with Bernstein predicting a 50 basis points annual increase due to the shift towards services. Analyst Toni Sacconaghi noted that improving margins within services could add another 0-30 basis points, driven by the strength of the App Store, Advertising, and iCloud. Sacconaghi has an Outperform rating and a $240 price target on Apple.
Chewy (CHWY, Financial) struck a deal to repurchase $500 million worth of equity from BC Partners, in addition to its existing $500M share buyback program. Mizuho Securities analyst David Bellinger views this as an indicator of improving free cash flow, which could lead to capital returns. The company aims to achieve sustainable new customer growth as a key catalyst.
Rite Aid (OTC:RADCQ) is seeking bankruptcy court approval for its restructuring plan to cut $2B in debt and emerge from Chapter 11. The plan aims to pay creditors and resume operations. The company has closed over 500 stores and sold its Elixir business to MedImpact for $575M. A NJ bankruptcy judge will review the case on Thursday.
BP (BP, Financial) has implemented a hiring freeze and paused new offshore wind projects under new CEO Murray Auchincloss, who is shifting focus back to oil and gas operations. Auchincloss aims to prioritize projects that generate immediate cash flow, such as offshore wind in Britain and Germany, and expand investments in oil and gas assets in the Gulf of Mexico and U.S. shale basins.
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