The S&P 500 futures are up 8 points (0.2% above fair value), Nasdaq 100 futures are up 47 points (0.2% above fair value), and Dow Jones Industrial Average futures are up 31 points (0.1% above fair value).
Stock futures are higher after yesterday's record finish for the Dow Jones Industrial Average. Investors are looking at mostly better-than-expected earnings from UnitedHealth (UNH, Financial), Bank of America (BAC, Financial), and Morgan Stanley (MS, Financial).
Participants are also waiting for the Retail Sales report for June, which will be released at 8:30 ET.
Treasury yields are lower ahead of the data. The 10-year note yield is down six basis points to 4.17%, and the 2-year note yield is down three basis points to 4.42%.
In corporate news:
- UnitedHealth (UNH, Financial): Beats by $0.14, reports revenues in line; reaffirms FY24 EPS guidance; provides cyberattack update
- Bank of America (BAC, Financial): Beats by $0.03, reports revenues in line
- Morgan Stanley (MS, Financial): Beats by $0.17, beats on revenues
- PNC (PNC): Beats by $0.40, reports revenues in line
- Charles Schwab (SCHW): Beats by $0.01, reports revenues in line
- Match Group (MTCH): Starboard Value sends letter regarding opportunities to increase shareholder value
- Shopify (SHOP, Financial): Upgraded to Buy from Neutral at Bank of America
- Dollar Tree (DLTR): Downgraded to Neutral from Overweight
- Verizon (VZ): Considering the sale of thousands of US towers; record labels file lawsuit against Verizon
Reviewing overnight developments:
Today's News
Amazon's (AMZN, Financial) Executive Chair Jeff Bezos sold 403,974 shares of the company's stock for $80.8M as its stock price hovered near an all-time high. The shares were sold on July 11 at an average price of $200.0282, shortly after the stock hit its peak of $200.27 earlier this month. This sale follows earlier transactions this year, including 25M shares sold for $4.93B and 12M shares for over $2B. Despite these sales, Bezos retains a significant stake, holding more than 928M shares, or 10% of the company.
Bank of America upgraded Shopify (SHOP, Financial) to a Buy rating from Neutral and raised its price objective to $82. Analyst Brad Sills noted that under new CFO Jeff Hoffmeister, Shopify has turned a corner regarding balanced growth and margins. The firm anticipates solid revenue growth driven by eCommerce expansion, steady market share gains, and disciplined expense management. Shopify is expected to continue consolidating the small business market, capitalizing on its market leadership and competitive advantages.
In a significant move within the cybersecurity sector, Google (GOOG, Financial) (GOOGL, Financial) is rumored to be acquiring cybersecurity startup Wiz for $23B. Citi analysts described the acquisition as a "rich" deal but potentially beneficial for other sector players like Palo Alto Networks (PANW, Financial) and CrowdStrike (CRWD, Financial). The deal underscores Google's commitment to enhancing its cybersecurity capabilities, which could influence the next wave of network transformations and public cloud migrations.
UnitedHealth (UNH, Financial) reported a rise in medical costs in its Q2 2024 financials, partly due to the cyberattack on its Change Healthcare division. Despite this, the company exceeded Street forecasts with adjusted quarterly earnings growing ~11% YoY to $6.80 per share. UnitedHealth also raised its full-year forecast for the impact of the cyberattack, citing increased business disruption and response costs. The company has provided $9B in advance funding to support care providers as it restores affected services.
General Motors (GM, Financial) has adjusted its EV production outlook, declining to reiterate its previous forecast of one million units by the end of 2025. CEO Mary Barra indicated that the automaker would build to meet demand rather than adhere to a fixed target. The company delivered 21,390 electric vehicles in Q2, with first-half EV sales totaling 38,355, both of which were records but below the anticipated pace.
Morgan Stanley's (MS, Financial) stock slipped 2.6% in premarket trading after its Q2 earnings and revenue beat consensus estimates, but its provision for credit losses was higher than expected. The firm reported a Q2 GAAP EPS of $1.82 and net revenue of $15.0B. CEO Ted Pick highlighted the strong quarter amid an improving capital markets environment. However, the pretax profit margin declined to 27% from 29% in the previous quarter.
Mizuho downgraded Zscaler (ZS, Financial) to Neutral from Outperform, citing concerns about the company's ability to close large deals amid an increasingly competitive SASE market and a challenging macro environment. The departure of key executives, including Chief Operating Officer Dali Rajic, has added to the execution risk. Despite these challenges, Zscaler remains well-positioned within the SASE market with its platform capabilities and architecture innovations.
Bank of America (BAC, Financial) reported Q2 earnings that beat Wall Street expectations, driven by sales and trading revenue growth in its Global Markets unit. The bank's Q2 EPS of $0.83 exceeded the average analyst estimate, while net interest income matched expectations. CEO Brian Moynihan highlighted the ninth consecutive quarter of year-over-year revenue growth in sales and trading, contributing to the bank's strong performance.
Accenture (ACN, Financial) announced its agreement to acquire Minneapolis-based Logic, a retail technology services firm, to enhance its retail technology transformation capabilities. The acquisition, which is subject to regulatory approvals, will expand Accenture's retail capabilities with essential skills in core technologies, AI, and generative AI. This marks the fourth acquisition announced by Accenture since the start of July.
Blue Owl Capital (OWL) agreed to acquire alternative credit manager Atalaya Capital Management for $450M. The deal includes $350M in Blue Owl equity and $100M in cash, with potential for up to $350M in earnout consideration. The acquisition, expected to close in the second half of 2024, will bring Atalaya's expertise in asset-based credit investments into Blue Owl's portfolio, enhancing its capabilities in the alternative credit market.
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