The S&P 500 futures are down 23 points, trading 0.5% below fair value. Nasdaq 100 futures are down 125 points, trading 0.6% below fair value. Dow Jones Industrial Average futures are down 145 points, trading 0.4% below fair value.
Early trading shows a negative trend. Losses in mega-cap stocks are contributing to this. Recent rises in Treasury yields have also pressured stocks, though yields are steady this morning.
The 10-year note yield is down three basis points to 4.45%, and the 2-year note yield is down two basis points to 4.75%.
Today's economic data includes the May Job Openings report at 9:00 ET.
In corporate news:
- Microsoft (MSFT, Financial): aims to consolidate retail channels in China, according to Reuters
- Moderna (MRNA): will be awarded $176 million from the US government to help develop an mRNA bird flu vaccine, according to Bloomberg
- Blackstone (BX): to sell Alinamin to MBK Partners for an estimated $2.2 billion, according to Nikkei
- Paramount (PARA): Barry Diller is considering a bid to take control of Paramount, according to NY Times
- Tesla (TSLA): reporting Q2 deliveries today
- Spirit Airlines (SAVE): announces appointment of Fred Cromer as Executive Vice President and Chief Financial Officer, effective July 8, 2024
- CrowdStrike (CRWD): downgraded to Neutral from Overweight at Piper Sandler
Reviewing overnight developments:
Today's News
The AI rally appears to be here to stay, with Nvidia (NVDA, Financial) emerging as the top pick for the best-performing S&P 500 stock in the second half of 2024. Nvidia garnered 31% of the votes in a recent Wall Street Breakfast poll. Other AI giants like Microsoft (MSFT, Financial) and Apple (AAPL, Financial) also received significant votes, 8% and 6% respectively. Nvidia soared 149% in the first half of 2024, second only to Super Micro Computer (SMCI) which saw a 188% return. Both companies have significantly contributed to the benchmark index's record highs this year.
Amazon (AMZN) gained attention after Mizuho Securities reported acceleration in its cloud computing unit, Amazon Web Services (AWS). Shares rose slightly in premarket trading and have surged over 10.5% in the past month, pushing Amazon's valuation past $2 trillion. Mizuho's survey indicated a strong pipeline for workload migration and upgrades, with generative AI projects nearing commercial deployment within six months.
PayPal Holdings (PYPL, Financial) saw a lift after Susquehanna Financial upgraded the stock, citing profitable growth as a priority. The stock traded up 1.37% pre-market at $58.60. Analyst James Friedman raised the price target to $71, noting that PayPal's recent stock price drop presented a buying opportunity. The company has been focusing on consumer-facing improvements to enhance its value proposition.
Chicken Soup for the Soul Entertainment (CSSE, Financial), parent company of Redbox, filed for bankruptcy with nearly $1 billion owed to creditors, including Sony (SONY), Warner Bros (WBD), Walgreens (WBA), and Walmart (WMT). The company struggled to adapt to changes in the movie industry, reminiscent of Blockbuster's failure to compete with Netflix (NFLX) and other streaming services.
Sea's (SE) stock fell about 3% in premarket trading after its unit PT Shopee International Indonesia accepted an antitrust violation report by the Indonesian regulatory agency KPPU. The company agreed to overhaul its delivery service and pledged not to engage in anti-competitive behavior. Failure to comply could result in another hearing and potential fines.
Johnson & Johnson (JNJ, Financial) announced that its FDA-approved cell therapy Carvykti, developed with Legend Biotech (LEGN), outperformed standard care in a Phase 3 trial for multiple myeloma patients. The interim data showed that Carvykti significantly improved overall survival compared to standard therapies, marking a milestone in cell therapy for myeloma.
Salesforce (CRM, Financial) shareholders voted against the executive pay package, particularly questioning the equity awards granted to CEO Marc Benioff. Around 404.8 million votes opposed the compensation plan. Benioff's total pay for fiscal 2024 was $39.6 million, which included substantial stock and option awards.
The Federal Trade Commission is preparing to block Tempur Sealy's (TPX, Financial) $4 billion acquisition of Mattress Firm. Concerns over potential price increases and discrimination against rival suppliers have been raised. A lawsuit to halt the deal could be filed soon.
BYD (OTCPK:BYDDF) is expanding in Europe through a partnership with French leasing firm Ayvens, majority-owned by Société Générale. The company aims to capture a larger share of the EU market for EVs and PHEVs, despite facing increased resistance from EU governments. BYD is also constructing a factory in Hungary to dodge future EU tariffs.
Rivian Automotive (RIVN, Financial) produced 9,612 vehicles and delivered 13,790 in Q2, aligning with its expectations. The company reaffirmed its full-year production guidance of 57,000 vehicles and is on track for positive gross profit in Q4.
Carrier Global (CARR, Financial) completed the sale of its Industrial Fire business to Sentinel Capital Partners for $1.425 billion. The company plans to use the proceeds to pay down debt and expects to resume stock buybacks in 2024.
Pure Storage (PSTG) was downgraded by UBS due to increased competition in the AI infrastructure market. Shares fell 4.9% in premarket trading. Competitors like NetApp (NTAP) and HP (HPQ) are expected to gain market share, impacting Pure Storage's valuation.
BYD (OTCPK:BYDDF) set a new sales record in Q2, driven by price cuts across most models. The company sold 426,039 pure EVs, coming close to Tesla's (TSLA) estimated 440,000 units. BYD aims to surpass Tesla as the world's top EV seller.
GuruFocus Stock Analysis
- Long Live the Perfect 10 Portfolio by John Dorfman
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