The S&P 500 futures are up 25 points (0.5% above fair value), Nasdaq 100 futures are up 100 points (0.5% above fair value), and Dow Jones Industrial Average futures are up 15 points (0.1% above fair value).
Early trading is positive on the first day of the new month. Optimism about rate cuts and buying in mega cap and semiconductor stocks are driving this trend. Meta Platforms (META, Financial) is up nearly 8% after strong quarterly results.
Treasury yields are lower, supporting stocks. The 10-year note yield is down five basis points to 4.06%, and the 2-year note yield is down five basis points to 4.29%.
The Bank of England lowered its bank rate by 25 basis points to 5.00%, as expected. This follows the Fed's decision to keep rates unchanged, but Fed Chair Powell suggested rate cuts could start as soon as September if data aligns with expectations.
Today's economic data includes:
- 8:30 ET: Weekly Initial Claims (consensus 233,000; prior 235,000), Continuing Claims (prior 1.851 million), preliminary Q2 Productivity (consensus 1.6%; prior 0.2%), and preliminary Q2 Unit Labor Costs (consensus 1.7%; prior 4.0%)
- 10:00 ET: June Construction Spending (consensus 0.1%; prior -0.1%) and July ISM Manufacturing (consensus 48.5%; prior 48.5%)
- 10:30 ET: Weekly natural gas inventories (prior +22 bcf)
In corporate news:
Today's News
Meta Platforms (META, Financial) shares surged 7% after the social media giant reported better-than-expected Q2 results. Key metrics showed strong growth, with operating income rising 58%, family daily active people increasing by 7%, ad impressions across the family of apps growing by 10%, and the average price per ad also rising by 10%. Meta expects Q3 sales to be in the range of $38.5B-$41B, compared to the consensus of $39.2B. Additionally, Meta boosted its 2024 capex range to $37B-$40B from the previous $35B-$40B, hinting at significant capex growth in 2025.
Minnesota has become the second U.S. state to enact flying car regulations, following New Hampshire's legislation in 2020. The new law allows private citizens to own "roadable aircraft," enabling drivers to become pilots of the same vehicle. These airplane-to-car hybrids can register as motor vehicles and use their tail number instead of a traditional license plate. However, they must take off and land from suitable airfields and cannot descend onto roadways or public highways, except in emergencies.
The Bank of England reduced its benchmark interest rate to 5% from 5.25%, with the Monetary Policy Committee voting 5-4 in favor of the cut. Governor Andrew Bailey described the decision as "finely balanced," noting the risks of higher inflation. The pound sterling (GBP:USD) edged lower following the announcement, which economists had predicted with a 60% chance of occurring.
Shares of Carvana (CVNA, Financial) jumped 11% following strong Q2 results. The company reported an impressive earnings performance, contributing to the overall positive sentiment in the market.
Elon Musk has denied reports that his AI startup xAI considered acquiring chatbot maker Character.AI. Musk clarified that xAI is not planning to acquire Character.AI, which has previously held talks with companies like Google (GOOG, Financial) and Meta Platforms (META, Financial) about research partnerships.
Moderna (MRNA, Financial) shares fell ~12% premarket after the biotech company slashed its outlook for product sales, citing lower COVID vaccine sales. Despite exceeding Street forecasts with its quarterly financials, Moderna's net product sales plunged ~73% YoY to $184M. The company announced that the commercial rollout of its recently approved vaccine would commence soon.
Hershey (HSY, Financial) fell sharply after posting Q2 results below expectations and setting softer-than-expected profit guidance. Revenue fell 16.7% YoY to $2.074 billion, driven by retailer inventory reductions and seasonal shipment timing. Adjusted operating profit plunged 32.8% to $383.5 million, and Non-GAAP EPS missed expectations at $1.27 vs. $1.45 consensus.
Eli Lilly (LLY, Financial) reported that its drug Tirzepatide, marketed as Mounjaro and Zepbound, reduced the risk of heart failure outcomes by 38% compared to placebo in a late-stage study. The drug showed statistically significant improvements in primary and secondary endpoints, including heart failure symptoms and physical limitations.
Arm Holdings (ARM, Financial) saw an 8% sell-off after reporting fiscal first-quarter results and guidance. Despite a beat in licensing upside, cyclical headwinds in IoT, networking, and industrial sectors kept the FY25 forecast largely constant. Analysts defended the stock, highlighting its exposure to significant megatrends in semiconductors.
Delta Air Lines (DAL, Financial) CEO Ed Bastian stated that the global IT outage would cost the airline $500M, aligning with Wall Street expectations. The outage, caused by a CrowdStrike (CRWD) software glitch, led to the cancellation of over 5,000 flights, prompting an investigation by the Department of Transportation.
Roblox (RBLX, Financial) reported Q2 GAAP EPS of -$0.32 and bookings of $955.18M, marking a 22.4% YoY increase. The company provided guidance for Q3 2024, expecting revenue between $860 million and $885 million and bookings between $1,000 million and $1,025 million.
Iron Mountain (IRM, Financial) declared a $0.715/share quarterly dividend, a 10% increase from the prior dividend of $0.650. The forward yield stands at 2.79%, with the dividend payable on Oct. 3 to shareholders of record on Sept. 16.
GuruFocus Stock Analysis
- Back-to-School Buzz: Spending Expected to Fall From 2023's Record Level​ by Wall Street Horizon
- Meta: Overvalued, but Growth Intact Amid Strategic Investments by Oliver Rodzianko
- Big Tech, Interest Rates, Inflation and Politics: What to Expect From 2nd-Quarter Earnings by Jacob Wolinsky
- The Future Is Optimistic for Duolingo by Renato Neves
- Supported by Cloud, AI Units, Microsoft Is on a Path of High Growth by Akim Guerreiro
