S&P 500 futures are up 14 points (0.3% above fair value), Nasdaq 100 futures are up 52 points (0.2% above fair value), and Dow Jones Industrial Average futures are up 105 points (0.2% above fair value).
The third quarter starts with a positive trend. Gains in mega-cap stocks and speculative buying have boosted premarket gains. Chewy (CHWY, Financial) shows an 18% gain after Keith Gill (Roaring Kitty) disclosed a 6.6% passive stake.
Rising market rates haven't stopped the early gains. The 10-year note yield is up seven basis points to 4.41%, and the 2-year note yield is up three basis points to 4.75%.
Today's economic calendar includes:
- 9:45 ET: Final June S&P Global U.S. Manufacturing PMI (prior 51.7)
- 10:00 ET: June ISM Manufacturing Index (expected 49.1%; prior 48.7%) and May Construction Spending (expected 0.1%; prior -0.1%)
In corporate news:
- Amazon (AMZN, Financial) aims to spend over $100 billion on data centers in the next 10 years.
- Boeing (BA) may face fraud charges from the DOJ.
- Verizon (VZ) must pay $847 million for violating 5G patents.
- Chewy (CHWY, Financial) gains 18.4% after Keith Gill disclosed a 6.6% stake.
- Walgreens (WBA) faces delays in selling Boots as an executive departs.
- Visa (V) and Mastercard (MA) can handle a larger settlement with merchants, says a judge.
- Spirit Aerosystems (SPR) will be acquired by Boeing (BA) for $37.25 per share.
Overnight developments:
Today's News
Nvidia (NVDA, Financial) was in focus on Monday as Morgan Stanley raised its earnings estimates and price target on the semiconductor giant, citing "robust" data checks. Analyst Joseph Moore pointed to strong data from Taiwan and China, which supports confidence in near-term numbers. Although shares fell fractionally in premarket trading, the firm remains optimistic about Nvidia's catalyst path, despite the tail end of the Hopper cycle. Moore raised his price target to $144 from $116 and maintained an Overweight rating.
Chewy (CHWY, Financial) soared in premarket trading after Keith Gill, known as Roaring Kitty, disclosed a $245 million position in the online retailer. With his 9,001,000 shares, Gill holds a 6.6% stake in Chewy. The SEC filing followed a cryptic social media post by Gill, which led to rallies for Chewy and Petco Health and Wellness Company (WOOF, Financial). Chewy's shares surged 22.88% in premarket action, while Petco jumped 6.63%. Other highly-shorted stocks to watch include Children's Place (PLCE), Beyond Meat (BYND), and Virgin Galactic (SPCE).
Technology stocks, led by mega caps such as Apple (AAPL, Financial), Google (GOOG, Financial) (GOOGL, Financial), Microsoft (MSFT, Financial), Nvidia (NVDA, Financial), and Meta Platforms (META, Financial), are projected to rise another 15% in the second half of the year, driven by artificial intelligence advancements. Wedbush Securities highlighted the potential for these stocks, with Nvidia's GPU chips seen as crucial in the tech sector. Other top tech stocks for the second half include Palantir (PLTR, Financial), Palo Alto Networks (PANW, Financial), and Zscaler (ZS, Financial).
Amazon (AMZN, Financial) Web Services is nearing a deal with Constellation Energy (CEG) for direct power supply from nuclear plants, as the demand for electricity to power AI data centers surges. AWS had previously purchased a nuclear-powered data center campus in Pennsylvania. This renewed interest in nuclear power could benefit the industry, which has struggled to compete with other renewable sources and cheap natural gas.
GigaCloud Technology (GCT) announced its addition to the Russell 2000 Index, effective June 28. The stock saw a premarket increase of 0.85% to $30.68 following the announcement.
AbbVie (ABBV, Financial) named Robert A. Michael as the new CEO, succeeding Richard A. Gonzalez, who has become executive chairman of the board. Michael, previously president and COO, has been a part of AbbVie's executive leadership team for years. The leadership change aims to continue AbbVie's growth trajectory.
Spirit AeroSystems (SPR) shares soared over 8% after Boeing (BA) announced it would acquire the company in an all-stock deal valued at approximately $8.3 billion. This acquisition represents a premium of 26% over Spirit's closing stock price before the acquisition talks were confirmed.
Sales growth for AI-related megacap stocks is expected to cool in Q2 and continue that trend through the end of the year. Nvidia (NVDA, Financial), Microsoft (MSFT, Financial), Meta (META, Financial), Alphabet (GOOG, Financial) (GOOGL, Financial), and Amazon (AMZN, Financial) are projected to see a slowdown in sales growth, with declines in net margins for all but Amazon.
J.P. Morgan initiated coverage on Amkor Technology (AMKR) with an Overweight rating and a price target of $48. Analysts highlighted Amkor's role as a key supplier in the semiconductor industry, benefiting from strong demand for advanced packaging solutions driven by AI, high-performance computing, and 5G applications.
Nio (NIO) delivered 21,209 vehicles in June 2024, marking a 98.1% year-over-year increase. The company's Q2 deliveries jumped 143.9% year-over-year, reaching 57,373 vehicles. Nio's cumulative deliveries reached 537,020 as of June 30, 2024, with shares up 2% in premarket trading.
Goldman Sachs took a negative view of Charter Communications (CHTR), Altice USA (ATUS), and Lumen Technologies (LUMN), sending their shares lower. However, Frontier Communications (FYBR) received a Buy rating and a $29 price target, attributed to its competitive position and successful pivot to broadband services.
