The S&P 500 futures are up six points, trading 0.1% above fair value. Nasdaq 100 futures are up 20 points, also 0.1% above fair value. Dow Jones Industrial Average futures are down 34 points, trading 0.1% below fair value.
Futures for the S&P 500, Nasdaq 100, and Dow are mostly unchanged. The mood might change after the weekly jobless claims report at 8:30 ET. Last week's initial claims rose more than expected, adding to growth concerns from Friday's jobs report.
Treasury yields are down ahead of the data. The 10-year note yield is down four basis points to 3.93%, and the 2-year note yield is down three basis points to 3.97%.
Earnings news since yesterday's close has had mixed reactions. Warner Bros. Discovery (WBD) is showing a noticeable pre-open loss after reporting revenue below expectations. Eli Lilly (LLY, Financial) shares are significantly higher after posting better-than-expected results and guidance.
In corporate news:
- Warner Bros. Discovery (WBD 6.81, -0.90, -11.7%): Misses Q2 revenue expectations.
- Eli Lilly (LLY 866.11, +93.97, +12.2%): Beats earnings and revenue expectations; Mounjaro sales up 216%; raises FY24 EPS and revenue guidance.
- McKesson (MCK 574.00, -43.51, -7.1%): Beats earnings expectations but misses on revenue; raises FY25 EPS guidance; increases dividend; approves $4.0 billion buyback.
- Plug Power (PLUG 1.90, -0.18, -8.7%): Misses earnings and revenue expectations; FY24 revenue guidance in line.
- Bumble Inc. (BMBL 4.82, -3.23, -40.1%): Beats earnings but misses on revenue; Q3 and FY24 revenue guidance below consensus.
- Duolingo (DUOL 169.50, +8.10, +5.0%): Beats earnings; revenue in line; raises FY24 revenue guidance.
- Zillow (ZG 45.86, +5.51, +13.7%): Beats earnings and revenue expectations; Q3 revenue guidance in line; promotes COO Jeremy Wacksman to CEO.
Reviewing overnight developments:
Today's News
Intel (INTC, Financial) faced a downgrade from Mizuho Securities, which cited ongoing headwinds and a widening technology gap with peers like Nvidia (NVDA, Financial) and AMD (AMD, Financial). Despite AI and PC market potential, the company's lagging performance led to a lowered rating from Outperform to Neutral and a reduced price target of $22 from $36. CEO Pat Gelsinger's recent stock purchase did little to offset the negative sentiment.
Exscientia (EXAI, Financial), an AI-driven drug discovery firm, will be acquired by Recursion Pharmaceuticals (RXRX, Financial) in an all-stock deal. The transaction, expected to close by early 2024, will see Recursion shareholders owning 74% of the combined entity. The deal was announced alongside Recursion's Q2 2024 financials, boosting Exscientia shares by ~8% and Recursion by ~2% in premarket trading.
Eli Lilly (LLY, Financial) reported impressive Q2 2024 financial results, with a 36% YoY revenue increase to $11.3 billion, driven by its weight loss drugs Mounjaro and Zepbound, as well as the breast cancer therapy Verzenio. The strong performance led the company to raise its full-year outlook, surpassing analyst expectations significantly.
Palantir Technologies (PLTR, Financial) and Microsoft (MSFT, Financial) have joined forces to deliver secure cloud, AI, and analytics solutions to the U.S. defense and intelligence sectors. The collaboration will integrate Microsoft's Azure OpenAI service with Palantir's AI Platform, enhancing operational AI workloads in classified environments.
Medical Properties Trust (MPW, Financial) reported Q2 FFO of $0.23 per share, in line with estimates, but saw a significant drop from $0.48 per share in the same period last year. Revenue for the quarter was $266.56 million, a 21% YoY decline but still beating expectations by $1.91 million.
Costco (COST, Financial) is implementing membership scanning devices at store entrances to curb non-member shopping. The new scanners, already being installed in Southern California, require members to scan their cards before entry, reinforcing the company's crackdown on membership-sharing.
Delta Air Lines (DAL, Financial) is facing a class action lawsuit from passengers alleging the airline failed to provide full refunds for delayed or canceled flights due to a computer outage. The lawsuit claims Delta offered partial refunds only if passengers waived further legal claims, seeking compensation for rebooking costs and inconvenience.
Datadog (DDOG, Financial) reported Q2 2024 results with a Non-GAAP EPS of $0.43, beating estimates by $0.07, and revenue of $645 million, a 26.7% YoY increase. The company also provided optimistic guidance for Q3 and the full year, anticipating continued strong performance.
Devon Energy (DVN) announced a quarterly dividend increase of 25.7% to $0.44 per share, combining a fixed and variable distribution. The dividend is payable on September 30 to shareholders of record on September 13.
Merck (MRK) discontinued its Phase 3 KeyVibe-008 trial for a combination therapy in treating extensive-stage small cell lung cancer. The decision followed a recommendation from an independent committee after data showed the primary endpoint of overall survival met futility criteria, with higher adverse event rates in the treatment arm.
Amazon (AMZN) is under investigation by the U.K. antitrust agency for its partnership with AI startup Anthropic. The Competition and Markets Authority is assessing whether the partnership could substantially lessen competition in the U.K. markets, with a decision on further investigation expected by October 4.
GuruFocus Stock Analysis
- 2024's ETF Relay: Yield, Protection, Crypto Share the Podium by Wall Street Horizon
- Oracle: Overvalued Despite AI Driving Fundamental Growth by Oliver Rodzianko
- Bank of America: Buffett's Selling Activity Could Be a Bad Sign by Grahamites
- Comparative Telecom Analysis: Verizon a Better Pick Than T-Mobile, AT&T by Akim Guerreiro
- CrowdStrike Is Significantly Undervalued Following Operational Crisis by OIliver Rodzianko
