The S&P 500 futures are up 12 points (0.2% above fair value), Nasdaq 100 futures are up 71 points (0.4% above fair value), and Dow Jones Industrial Average futures are up 22 points (0.1% above fair value).
Early trading shows a positive trend after gains in the S&P 500 and Nasdaq Composite yesterday. Mega cap stocks are boosting the market, and lower market rates are also helping. The 10-year note yield is down three basis points to 4.27%, and the 2-year note yield is down two basis points to 4.61%.
Fed Chair Powell will continue his monetary policy testimony before the House Financial Services Committee today.
The weekly MBA Mortgage Applications Index dropped 0.2% after a 2.6% decline last week. Other data today:
- 10:00 ET: May Wholesale Inventories (expected 0.6%; prior 0.1%)
- 10:30 ET: Weekly crude oil inventories (prior -12.16 million)
In corporate news:
- Microsoft (MSFT 461.26, +1.72, +0.4%): Left its observer seat on the OpenAI board; plans to raise Xbox Game Pass prices.
- Apple (AAPL 229.82, +1.17, +0.5%): Will not place observers on OpenAI board.
- Taiwan Semiconductor Manufacturing (TSM 188.78, +4.26, +2.3%): Reported a 28.0% year-over-year revenue increase in June.
- Illumina (ILMN 110.65, +3.97, +3.7%): Acquired Fluent BioSciences.
- Honeywell (HON 210.18, -0.42, -0.2%): Agreed to buy Air Products' liquefied natural gas process technology and equipment business for $1.81 billion in cash.
- UPS (UPS 134.51, +0.23, +0.2%): Appointed Brian Dykes as EVP and CFO.
- Chipotle Mexican Grill (CMG 57.60, +0.12, +0.2%): Announced CFO Jack Hartung will retire on March 31, 2025.
Reviewing overnight developments:
Today's News
Fed Chair Jerome Powell will continue his testimony before the House Financial Services Committee today, following his appearance before the Senate Banking Committee. Investors are keenly watching for any hints on interest rate policies and inflation targets. Powell emphasized that despite significant progress in controlling inflation, a rate cut this month remains unlikely as the Fed seeks more sustainable evidence of inflation moving towards their 2% goal.
Tesla's (TSLA, Financial) CEO Elon Musk announced that the new design for their humanoid robot, Optimus, will be completed later in 2024. Optimus is designed to perform tasks that are considered unsafe, repetitive, or boring. Musk claims that the robot will be less expensive than a car and envisions having over 1,000 robots working within Tesla by next year.
Apple (AAPL, Financial) shares saw a slight increase in premarket trading after Needham raised its price target from $220 to $260. The firm noted that Apple is focusing on share buybacks rather than investing in generative AI infrastructure. Analyst Laura Martin suggested that Apple should consider building an advertising business akin to Amazon's (AMZN) to boost revenue growth.
Bank of America Securities downgraded Visa (V, Financial) and Mastercard (MA, Financial) to Neutral from Buy, citing limited upside potential in their valuation multiples and regulatory headwinds. Mastercard stock fell 1.4% and Visa dipped 1.2% in premarket trading. The analyst stated that the companies' efforts to tap value-added services for revenue growth have resulted in inconsistent new flows growth.
Walmart (WMT, Financial) received an Overweight rating from Piper Sandler, with the firm expecting continued profit growth acceleration. Analyst Peter Keith highlighted Walmart's leveraging of its omnichannel model to drive significant valuation creation through new high-margin revenue streams such as supplier advertising and e-commerce.
Microsoft (MSFT, Financial) has reportedly withdrawn its board observer seat at OpenAI, and Apple (AAPL, Financial) will not take up a similar position. This move comes as tech giants face increasing scrutiny over their investments in AI startups. Microsoft has invested billions in OpenAI, the maker of ChatGPT.
Lenovo (OTCPK:LNVGY) led global PC shipments in Q2 2024, followed by HP Inc. (HPQ, Financial) and Dell Technologies (DELL, Financial). Lenovo's shipments grew 3.7% year-over-year, marking the second consecutive quarter of growth for the traditional PC market after seven quarters of decline.
3M (MMM, Financial) announced the resignation of its president and CFO, Monish Patolawala, effective July 31. The company has begun the search for a new CFO. Shares of 3M fell 2.1% in premarket trading following the announcement.
Taiwan Semiconductor Manufacturing Company (TSM, Financial) reported a 32.9% year-over-year increase in June revenue, driven by strong demand from major tech companies like Apple (AAPL, Financial) and Nvidia (NVDA). The company expects a massive surge in Q2 revenue, up almost 40% year-over-year.
Honeywell (HON, Financial) agreed to acquire Air Products' (APD) liquefied natural gas process technology and equipment business for $1.81 billion in cash. The acquisition will enable Honeywell to offer a comprehensive solution for managing energy transformation, including natural gas pre-treatment and liquefaction.
Baidu's (BIDU) stock surged about 10% in Hong Kong after Beijing authorities announced support for the introduction of robotaxis in ride-hailing and car rental fleets. Baidu operates the robotaxi service Apollo Go, which is set to expand further following this regulatory support.
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