The S&P 500 futures are up 5 points (0.1%), Nasdaq 100 futures are up 18 points (0.1%), and Dow Jones Industrial Average futures are down 8 points (fractionally). Contracts tied to these indexes are nearly flat after a strong rise in equity markets. The S&P 500 was 1.1% below its all-time high at yesterday's close, after nearing a 10% decline earlier this month.
Investors are cautious ahead of Wednesday's benchmark revisions for nonfarm payrolls and the FOMC Minutes for the July 30-31 meeting. Fed Chair Powell's speech on Friday at the Jackson Hole Economic Symposium is also a key event.
The 10-year note yield remains at 3.87%, and the 2-year note yield is down to 4.05%.
Today's News
Elon Musk's $44 billion acquisition of Twitter has become a financial debacle for the banks involved, marking the worst merger-finance deal since the 2008-2009 financial crisis. Banks including Bank of America (BAC, Financial) and Morgan Stanley (MS, Financial) lent $13 billion to Musk for the acquisition. Typically, banks sell such loans quickly, but Twitter, now renamed X, saw its financial performance deteriorate, leaving the banks unable to sell the debt without incurring significant losses. The debt remains "hung" longer than any similar unsold deal since the financial crisis, according to PitchBook LCD data.
Palo Alto Networks (PANW, Financial) saw its stock rise by about 2% in premarket trading after its fiscal fourth-quarter results and fiscal year 2025 outlook received positive analyst reactions. KeyBanc Capital Markets maintained its Overweight rating on the stock and raised the price target to $400 from $380. The company reported a 1% revenue beat and a 2% billings beat for the fiscal fourth quarter, with management expecting 19% to 20% growth for both the fiscal first quarter and fiscal year 2025.
The electric vehicle industry is experiencing "EV-phobia" in South Korea following a high-profile fire involving a Mercedes-Benz Group (MBGAF, Financial) EV. The fire, which occurred in an underground parking lot, damaged over 100 vehicles and caused minor injuries to residents. Mercedes-Benz has announced compensation of 4.5 billion won ($3.4 million) and is considering halting sales of the model involved. The incident has led to some panic selling of EVs in the region.
Johnson & Johnson (JNJ, Financial) has agreed to acquire medical device company V-Wave for an upfront payment of $600 million, with potential additional payments up to approximately $1.1 billion. V-Wave focuses on cardiovascular disease treatments, and its Ventura Interatrial Shunt device has received FDA Breakthrough Device Designation. The acquisition is expected to close before the end of 2024 and will be accounted for as an asset acquisition.
Eli Lilly's (LLY, Financial) tirzepatide, marketed as Mounjaro and Zepbound, significantly reduced the risk of developing type 2 diabetes by 94% in adults with pre-diabetes and obesity or overweight, according to the SURMOUNT-1 study. The trial involved 1,032 adults over a three-year period, with tirzepatide also leading to sustained weight loss. Adults on the highest dose experienced a 22.9% average decrease in body weight compared to 2.1% for placebo.
PayPal Holdings (PYPL, Financial) has expanded its alliance with Adyen (ADYEY, Financial), introducing Fastlane by PayPal for accelerated checkout to Adyen's enterprise and marketplace customers in the U.S. Fastlane allows customers to save their card and shipping information for quicker checkouts. The companies plan to extend this offering globally. PayPal's CEO Alex Chriss aims to make technological enhancements and customer data the core of the company's growth strategy.
The European Commission has approved €5 billion ($5.5 billion) in German state aid to support the construction and operation of a new microchip manufacturing plant by European Semiconductor Manufacturing Company (ESMC) in Dresden. ESMC is a joint venture involving Taiwan Semiconductor Manufacturing (TSM, Financial), Robert Bosch, NXP Semiconductors (NXPI, Financial), and Infineon Technologies. The project aims to meet the demand for automotive and industrial applications and will be the first of its kind in Europe.
Lowe's Companies (LOW, Financial) traded slightly lower in premarket action after posting a mixed Q2 earnings report and lowering its full-year guidance. Comparable sales decreased by 5.1%, below the expected decline of 4.4%. The company cited continued pressure in DIY bigger ticket discretionary spending and unfavorable weather conditions as factors. CEO Marvin Ellison highlighted strong operating performance despite the challenging macroeconomic backdrop.
GuruFocus Stock Analysis
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