The S&P 500 futures are up two points, trading 0.1% above fair value. The Nasdaq 100 futures are down nine points, trading 0.1% below fair value. The Dow Jones Industrial Average futures are up 28 points, trading 0.1% above fair value.
Contracts linked to the S&P 500, Nasdaq 100, and Dow Jones Industrial Average are flat in early action. Investors are looking at earnings from big banks. JPMorgan Chase (JPM, Financial) and Wells Fargo (WFC) are down after reporting earnings, while Citigroup (C, Financial) is up.
Today, the market will get another look at inflation with the June Producer Price Index report at 8:30 ET. Treasury yields are higher ahead of the report. The 10-year note yield is up three basis points to 4.22%, and the 2-year note yield is unchanged at 4.51%.
Other data today includes the preliminary July University of Michigan Consumer Sentiment survey at 10:00 ET.
In corporate news:
- JPMorgan Chase (JPM, Financial): 204.10, -3.35, -1.6%. Beats by $0.24 on GAAP EPS; beats on revenue.
- Wells Fargo (WFC): 56.50, -3.66, -6.0%. Beats by $0.04, beats on revenue.
- BNY Mellon (BK): 61.80, +0.33, +0.5%. Beats by $0.09, beats on revenue.
- Fastenal (FAST): 65.58, +1.41, +2.2%. Reports EPS in-line, revenue in-line.
- AT&T (T): 18.48, -0.38, -2.0%. Provides cybersecurity update; does not expect a material impact on financial condition or results.
- Estee Lauder (EL): 102.63, +1.02, +1.0%. CFO to retire.
- Lockheed Martin (LMT): 461.86, +1.48, +0.3%. Sikorsky awarded $251 million U.S. Army contract modification.
- Boeing (BA): 183.88, -0.03, -0.02%. Warned 737 Max customers of additional delays.
Reviewing today's economic data:
Today's News
The Producer Price Index (PPI) rose 0.2% month-over-month in June, surpassing the expected 0.1% increase, according to the Department of Labor. On a year-over-year basis, PPI increased 2.6%, higher than the 2.3% consensus. The core PPI, which excludes food and energy, increased 0.4% compared to the 0.2% consensus. Prices for final demand services rose 0.6% month-over-month, while prices for final demand goods slipped 0.5%.
JPMorgan (JPM, Financial) reported mixed Q2 results, with net income surging 25% year-over-year to $18.15 billion, or $6.12 per share. However, on an adjusted basis, the bank earned $4.40 per share, missing the consensus estimate by 11 cents. JPMorgan's results included a net gain of nearly $8 billion from a share exchange deal with Visa (V, Financial). CEO Jamie Dimon noted that while market valuations seem optimistic, inflation and interest rates may stay higher than expected.
Citigroup (C, Financial) stock gained 2.9% in premarket trading as Q2 earnings topped Wall Street expectations. The bank's GAAP EPS of $1.52 beat the average analyst estimate of $1.39. Revenue of $20.1 billion rose from $19.4 billion a year ago. CEO Jane Fraser highlighted that services continued to grow, driven by solid fee growth and increased activity in cross-border payments.
AT&T (T) disclosed a data breach involving customer call logs from 2022. The telecom giant's stock fell about 2% premarket. The breach, which occurred on a third-party cloud platform, affected records between May and October 2022. The third-party platform was identified as Snowflake (SNOW), whose stock also fell about 5% premarket.
UBS downgraded Tesla (TSLA, Financial) to a Sell rating, citing concerns about the sustainability of its premium valuation. The analysts noted that while Tesla is investing heavily in AI, the payoff may be long-dated, and market enthusiasm for AI could impact the stock's multiple. Tesla's valuation for its core auto business, energy business, and robotaxi business were estimated to be significantly lower than its current trading price.
Microsoft (MSFT) received a price target increase from BMO Capital Markets due to rising expectations for its cloud business. Analyst Brian Pitz now expects Azure to report 31% year-over-year growth in constant currency. The price target was raised to $500 from $465.
In other earnings news, Wells Fargo (WFC) reported Q2 EPS of $1.33, beating the $1.28 consensus. However, the bank's stock dropped 5.7% premarket as it failed to change its 2024 guidance for net interest income. The guidance for noninterest expenses increased to approximately $54 billion from the prior view of $52.6 billion.
Amgen (AMGN, Financial) emerged as a potential new player in the obesity drug market, according to a recent poll. While Eli Lilly (LLY, Financial) and Novo Nordisk (NVO, Financial) remain leaders, Amgen's shares surged in May, indicating growing investor interest.
Sony Group (SONY, Financial) will not be making a bid during Paramount Global's (PARA) 45-day go-shop period after initially showing interest. Media mogul Barry Diller hinted that he might still be interested in Paramount, adding a layer of uncertainty to the deal.
Intel's (INTC, Financial) Chief Technology Officer Greg Lavender stated that the company aims to achieve $1 billion in cumulative software revenue by the end of 2027. Intel generated over $100 million in software revenue in 2021 and has since acquired three software companies to bolster its software strategy.
Southwest Airlines (LUV, Financial) and Archer Aviation (ACHR, Financial) signed a memorandum of understanding to develop operational plans for electric air taxi networks at California airports. The Archer Midnight aircraft aims to offer a safe, low-noise, cost-competitive transportation option with no direct emissions.
Tesla (TSLA, Financial) launched a rear-wheel drive Model 3 long-range vehicle priced $5,000 less than the all-wheel drive model. The new variant starts at $42,490, with a federal EV tax credit bringing its effective price down to $34,990, making it cheaper than the base Model 3.
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