S&P 500 futures are up by 2 points, Nasdaq 100 futures are up by 6 points, and Dow Jones Industrial Average futures are up by 24 points, all trading slightly above fair value.
Contracts tied to the S&P 500, Nasdaq 100, and Dow Jones Industrial Average are mostly flat. This follows record highs last week for the S&P 500 and Nasdaq Composite. Investors are cautious ahead of major events, particularly the start of earnings season later this week, with large banks like JPMorgan Chase (JPM), Wells Fargo (WFC), and Citigroup (C) set to report results.
This week's schedule also includes new inflation data from the June Consumer Price Index and Producer Price Index.
Treasury yields are rising, which could limit gains for stocks. The 10-year note yield is up to 4.31%, and the 2-year note yield is up to 4.63%.
In corporate news:
- Boeing (BA, Financial) will plead guilty in a criminal case related to 737 MAX crashes.
- Paramount Global (PARA) and Skydance Media have signed a merger agreement. PARA class A stockholders will receive $23/share in cash/stock, and class B stockholders will get $15/share.
- NVIDIA (NVDA, Financial) had its price target raised to $150 from $120 and was reiterated as a Buy at UBS.
- JPMorgan Chase (JPM) was downgraded to Peer Perform from Outperform at Wolfe Research.
- ServiceNow (NOW, Financial) was downgraded to Sell from Neutral at Guggenheim.
- Exxon Mobil (XOM) expects Q2 upstream earnings of $5.7 billion and non-GAAP total earnings of $8.2 billion.
- Corning (GLW) sees Q2 EPS at the high end or slightly above prior range and has raised Q2 revenue guidance.
Reviewing overnight developments:
Today's News
Microsoft (MSFT, Financial) has informed its staff in China that they will only be able to use iPhones for work starting from September, removing Android-based devices from the workplace. This move is part of Microsoft's global Secure Future Initiative and is aimed at ensuring all staff use the Microsoft Authenticator password manager and Identity Pass app. Apple's (AAPL, Financial) iOS store availability in China, unlike Google's (GOOGL, Financial) Play Store, is a critical factor in this decision.
Nvidia (NVDA, Financial) was in the spotlight on Monday after UBS reiterated its Buy rating and raised its price target, citing exceedingly robust demand for its upcoming Blackwell line. The investment firm noted that Nvidia could earn roughly $5 per share in 2025, with the order pipeline for NVL72 and NVL36 being materially larger than expected. Shares rose fractionally in premarket trading.
Devon Energy (DVN, Financial) announced a $5 billion acquisition of Grayson Mill Energy's Williston Basin business. The deal, consisting of $3.25 billion in cash and $1.75 billion in stock, expands Devon's position in the Williston Basin with 307,000 net acres and expected production of 100,000 boe/day in 2025. The company anticipates up to $50 million in annual cash flow savings from operational efficiencies and marketing synergies.
Eli Lilly (LLY, Financial) announced a deal to acquire biopharmaceutical company Morphic Holding (MORF, Financial) for $57 a share in cash, totaling approximately $3.2 billion. The acquisition, aimed at strengthening Eli Lilly's immunology pipeline, has been approved by the boards of both companies and is expected to close in the third quarter of 2024. Shares of Morphic Holding jumped around 77% premarket following the announcement.
Paramount Global (PARAA, Financial) has agreed to a merger with David Ellison's Skydance Media, aiming to revive the Hollywood icon that has struggled since the recombination of Viacom and CBS in 2019. The company has faced cash troubles with its streaming business, Paramount+, and a decline in linear TV viewership. The merger hopes to stabilize the company's financial situation and improve its market value.
Boeing (BA, Financial) has agreed to plead guilty to a criminal charge of conspiracy to defraud the U.S. government after violating a settlement over two fatal 737 MAX crashes. The proposed plea deal includes a maximum criminal fine of $487.2 million, with credit for a previously paid penalty, resulting in an additional $243.6 million payment. Boeing will also invest $455 million to enhance its compliance and safety programs and will be on probation for three years.
Accenture (ACN, Financial) has acquired India-based semiconductor design services provider, Excelmax Technologies. The deal, whose terms were not disclosed, will bring approximately 450 professionals to Accenture, enhancing its silicon design and engineering capabilities in areas such as emulation, automotive, physical design, analog, logic design, and verification.
Devon Energy (DVN, Financial) announced a $5 billion acquisition of Grayson Mill Energy's Williston Basin business. The deal, consisting of $3.25 billion in cash and $1.75 billion in stock, expands Devon's position in the Williston Basin with 307,000 net acres and expected production of 100,000 boe/day in 2025. The company anticipates up to $50 million in annual cash flow savings from operational efficiencies and marketing synergies.
ServiceNow (NOW, Financial) saw its stock fall about 3% premarket after Guggenheim downgraded the shares to Sell from Neutral, citing future risks that don't match the current valuation. The firm introduced a price target of $640 and noted that while the second quarter of 2024 should be fine, the second half of the year presents risks to consensus Subscription revenue.
Greenbrier (GBX, Financial) reported Q3 GAAP EPS of $1.06, missing estimates by $0.07, and revenue of $820.2 million, which was down 21.1% year-over-year and missed by $100.7 million. The company grew its lease fleet by 600 units to 15,200 units with nearly 99% utilization. Greenbrier updated its fiscal 2024 guidance, projecting deliveries of 23,500 to 24,000 units and revenue of $3.5 to $3.6 billion.
Passenger car sales in China fell for the third consecutive month in June, despite price reductions and government incentives. Sales dropped 6.9% year-over-year, totaling approximately 1.77 million vehicles. However, New Energy Vehicles (NEVs) accounted for a record 48.1% of domestic auto sales, with plug-in hybrid sales growing by 67.2% and electric vehicle sales increasing by 9.9%.
Amarin Corporation (AMRN) announced that its commercial partner in Mainland China, EddingPharm, received regulatory approval for VASCEPA from China’s National Medical Products Administration. The approval allows VASCEPA to be used to reduce cardiovascular events as an adjunct to statin therapy in adults with elevated triglycerides and established cardiovascular disease or diabetes mellitus with additional risk factors.
StoneCo (STNE) stock rose 2.2% premarket as UBS upgraded the firm to Buy from Neutral, citing improving fundamentals and an attractive valuation following recent underperformance. UBS expects the company's return on equity, adjusted by goodwill, to reach 19% by 2025. StoneCo has been upgraded by multiple analysts recently, despite a weaker-than-expected first-quarter earnings report.
HilleVax (HLVX) shares plummeted as much as 89% premarket after announcing that its NEST-IN1 study for HIL-214 in infants did not meet primary or secondary endpoints. The company decided to discontinue further development of HIL-214 in infants but is exploring the potential for continued development in adults.
Apple's (AAPL, Financial) iPhone is showing signs of stabilization across various markets, according to Wedbush Securities. The investment firm believes that the June quarter will be the last negative growth quarter for China, with growth expected to resume in the September quarter. Analyst Dan Ives has an Outperform rating and a $275 price target on Apple, citing optimism around the tech giant's future prospects.
