S&P futures vs fair value: +50.00. Nasdaq futures vs fair value: +220.00.
The S&P 500 futures are up 50 points, trading 0.8% above fair value. Nasdaq 100 futures are up 220 points, trading 1.2% above fair value. Dow Jones Industrial Average futures are up 270 points, trading 0.6% above fair value.
There's a positive trend in early trading, driven by gains in mega cap and semiconductor stocks. Nasdaq 100 futures are more than 1% higher. However, this could change after the June Personal Spending and Income report, which includes the Fed's preferred inflation measure, the PCE Price Indexes.
The Treasury market is also showing modest gains, but this could shift after the report. The 10-year note yield is down two basis points to 4.24%.
Market participants are processing mixed earnings news. Dexcom (DXCM) is down sharply after disappointing FY24 revenue guidance, while Norfolk Southern (NSC) shows a solid gain after better-than-expected earnings.
In corporate news:
- Dexcom (DXCM 66.72, -41.13, -38.1%): Beats by $0.04, misses on revenue; guides Q3 revenue below consensus; guides FY24 revenue below consensus; announces $750 million share repurchase program.
- L3Harris (LHX 243.32, +0.05, +0.02%): Beats by $0.06, reports revenue in-line; guides FY24 EPS in-line, revenue in-line.
- Mohawk (MHK 155.00, +20.50, +15.2%): Beats by $0.25, misses on revenue; guides Q3 EPS above consensus.
- 3M (MMM 109.54, +6.15, +6.0%): Beats by $0.25, beats on revenue; raises FY24 EPS in-line.
- Norfolk Southern (NSC 240.00, +17.10, +7.7%): Beats by $0.20, reports revenue in-line.
- Baker Hughes (BKR 36.25, +0.67, +1.9%): Beats by $0.08, beats on revenue.
- Juniper Networks (JNPR 37.10, -0.39, -1.0%): Misses by $0.13, misses on revenue.
- Deckers Outdoor (DECK 945.00, +103.50, +12.3%): Beats by $1.03, beats on revenue; raises FY25 EPS guidance; reaffirms FY25 revenue guidance; key product launches selling strongly.
- Coursera (COUR 9.24, +1.83, +24.7%): Beats by $0.08, beats on revenue; guides Q3 revenue below consensus; guides FY24 revenue in-line.
Reviewing overnight developments:
Today's News
Merck (MRK, Financial) announced that the European Medicines Agency's (EMA) expert panel has endorsed its blockbuster anti-PD-1 therapy Keytruda in combination with Pfizer’s (PFE, Financial) antibody-drug conjugate, Padcev, for a type of bladder cancer. The positive opinion from EMA’s Committee for Medicinal Products for Human Use (CHMP) recommends marketing authorization for the Keytruda/Padcev combo as a first-line therapy for adults with unresectable or metastatic urothelial carcinoma. The decision was based on interim data from a Phase 3 trial called KEYNOTE-A39. The CHMP recommendation will next be reviewed by the European Commission (EC) for a final decision, expected in Q3 2024.
Bristol-Myers Squibb (BMY, Financial) shares traded higher in premarket Friday after the company exceeded Street forecasts with its Q2 2024 financials and announced a Phase 3 trial win for its experimental antibody therapy, cendakimab. The anti-IL-13 asset met both co-primary endpoints in a Phase 3 trial against eosinophilic esophagitis. Additionally, Bristol-Myers reported $12.2B in revenue with ~9% YoY growth, marking its best quarterly growth since Q3 2021. BMY's blood thinner Eliquis, marketed with Pfizer (PFE, Financial), contributed significantly to this growth.
Apple (AAPL, Financial) has cut the prices of iPhones in India by up to 6,000 rupees (about $71.7) following a reduction in basic customs duty on mobile phones in the country and a potential slowdown in China sales. The price reduction spans across its entire range, including the iPhone 15 Pro and Pro Max models. This is the first time Apple has reduced prices for its current generation Pro models in India.
International Game Technology (IGT, Financial) and Everi Holdings (EVRI, Financial) shares surged after Apollo Global Management (APO) agreed to acquire IGT's Gaming & Digital business and Everi in an all-cash deal valued at ~$6.3B on a combined basis. The transaction will involve IGT separating its gaming business via a taxable spin-off to its shareholders, and then immediately combining it with Everi. Everi stockholders will receive $14.25 a share in cash, representing a 56% premium over its last closing price.
3M (MMM, Financial) is poised to open at a 52-week high after easily beating Q2 adjusted earnings estimates and raising the lower end of its full-year earnings guidance. The company reported Q2 net income of $1.15B, or $2.07 per share, and adjusted total revenues rose 1.1% Y/Y to $6.02B. 3M now forecasts full-year adjusted EPS of $7.00-$7.30, above its previous guidance of $6.80-$7.30.
Casey's General Stores (CASY, Financial) announced an agreement to acquire Fikes Wholesale, which owns CEFCO Convenience Stores, in an all-cash transaction for $1.145 billion. The acquisition will expand Casey's presence into the Texas and southern markets, increasing its footprint to nearly 2,900 stores. The deal includes 198 retail stores, a dealer network, a fuel terminal, and a commissary to support the Texas stores.
SK hynix has decided to invest about 9.4T won (around $6.8B) to build its first chip plant in Yongin, South Korea. The company plans to start construction in March next year and complete it by May 2027. SK hynix intends to produce next-generation DRAMs, including high bandwidth memory (HBM), at the new facility.
Honeywell (HON, Financial) declared a quarterly dividend of $1.08 per share, maintaining its forward yield at 2.13%. The dividend is payable on September 6 for shareholders of record on August 16.
Wells Fargo (WFC, Financial) and Bank of America (BAC, Financial) announced dividend increases this week. Wells Fargo raised its dividend by 14.3% to $0.40 per share, while Bank of America increased its dividend by 8.3% to $0.26 per share.
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