The S&P 500 futures are down three points, trading slightly below fair value. The Nasdaq 100 futures are up 14 points, trading 0.1% above fair value. The Dow Jones Industrial Average futures are down 100 points, trading 0.2% below fair value.
Dow Jones and S&P 500 futures are down, while Nasdaq 100 futures are up, thanks to NVIDIA (NVDA, Financial) gaining over 2% after a 7% rebound yesterday.
FedEx (FDX) and Rivian Automotive (RIVN, Financial) are also big pre-market winners, up 13% and 39%, respectively. FDX reported better-than-expected earnings and expects demand to improve in FY25.
RIVN is up after announcing a joint venture with Volkswagen Group (VWAGY).
Treasury yields are rising, putting pressure on stocks. The 10-year note yield is up five basis points to 4.29%, and the 2-year note yield is up one basis point to 4.74%.
The weekly MBA Mortgage Applications Index showed a 0.8% increase, slightly down from last week's 0.9% rise. Other data coming out today include:
- 10:00 ET: May New Home Sales (consensus 650,000; prior 634,000)
- 10:30 ET: Weekly crude oil inventories (prior -2.55 mln)
In corporate news:
- FedEx (FDX): Beats earnings by $0.07, revenue in-line; guides FY25 EPS and revenue in-line; assessing FedEx Freight's role in its portfolio; expects moderate demand improvement in FY25.
- General Mills (GIS, Financial): Beats earnings by $0.02, misses on revenue; raises dividend.
- Rivian Automotive (RIVN, Financial): Announces joint venture with Volkswagen Group (VWAGY) for vehicle software technology; reveals convertible promissory note purchase agreement.
- Apple (AAPL, Financial): Upgraded to Buy from Neutral at Rosenblatt.
- Southwest Air (LUV, Financial): Lowers Q2 RASM outlook.
- Whirlpool (WHR, Financial): Bosch considering acquisition, according to Reuters.
- Chipotle Mexican Grill (CMG): Begins trading today after a 50-for-1 stock split.
Reviewing overnight developments:
Today's News
Rivian Automotive (RIVN, Financial) saw a significant boost in early trading following the announcement of a joint venture with Volkswagen (VLKAF). This partnership aims to share electric vehicle architecture and software, which Bank of America analyst John Murphy believes will provide Rivian with essential capital. This capital will support the production ramp-up of the R2 at its Illinois facility and the construction of a new facility in Georgia. Murphy also highlighted potential material cost savings and operating efficiencies that could enhance Rivian's cost position and gross margins. Wedbush Securities raised its price target to $20, maintaining an Outperform rating, calling the agreement a core game changer for Rivian.
Nvidia (NVDA, Financial) was in the spotlight as Citi increased its price target, citing plans to develop its GB200 GPUs in the NVL36 and 76 configurations by 2025. Shares rose 2% in premarket trading. Analyst Atif Malik emphasized that while major cloud service providers currently account for 40% of Nvidia's data center sales, enterprise AI agents represent the next wave of AI demand. Malik maintained a Buy rating and raised the price target to $150 from $126, noting that the adoption of AI is still in its early stages.
Whirlpool (WHR, Financial) shares surged over 11% following reports that Robert Bosch is considering a bid for the U.S. appliances manufacturer. Reuters cited sources indicating that Bosch has been in discussions with potential advisers about making an offer. The news follows earlier takeover speculation that boosted Whirlpool's shares. The company has a market cap of $4.75 billion and short interest of 13.37% of its float.
Stifel initiated coverage on Tesla (TSLA, Financial) with a Buy rating and a price target of $265. Analyst Stephen Gengaro highlighted Tesla's robust global supply chain, internal manufacturing support, and strong margins. Gengaro believes Tesla is well-positioned for multi-year growth, driven by upcoming updates to the Model 3 and Model Y, as well as the introduction of the next-generation Model 2. The full-self driving initiative is also expected to add value through sales, licensing, and potential RoboTaxi opportunities.
The IRS issued an apology to Citadel CEO Ken Griffin and other wealthy Americans whose personal tax information was leaked by former IRS contractor Charles Littlejohn. Littlejohn, who exploited system loopholes to steal income tax returns, leaked the information to the press in 2021. The IRS acknowledged its failure to prevent the criminal conduct and has since made substantial investments in data security to safeguard taxpayer information.
OpenAI's decision to restrict access to its services in China has prompted domestic AI players like Alibaba (BABA, Financial) and Baidu (BIDU, Financial) to vie for market share. Microsoft-backed OpenAI warned Chinese users of the impending ban, leading companies such as Tencent and Zhipu AI to offer incentives to developers. Baidu has promised free AI model fine-tuning and expert guidance, while Alibaba and Tencent have posted ads encouraging a switch to their platforms.
Apple (AAPL, Financial) was upgraded by Rosenblatt Securities, which cited the potential benefits from its AI initiatives. Shares rose nearly 1% in premarket trading. Rosenblatt analysts noted that Apple's focus on privacy in its AI initiatives could boost market share. The analysts raised their rating to Buy from Neutral and increased the price target to $260 from $196, highlighting Apple's approach to AI and partnerships with companies like OpenAI.
Alphabet's (GOOGL, Financial) Waymo launched its commercial robotaxi service in San Francisco, available to everyone via the Waymo One app. The company has been scaling its service over time, initially offering rides to pre-approved riders and staff. With nearly 300,000 people signing up, Waymo now provides over 50,000 rides a week across three major urban areas. The service was first launched in Phoenix, Arizona.
South Korea announced it will start granting aid to chip manufacturers from its 26T won ($19B) package in July. The initial 18T won package includes loans and investment capital, with eligible companies participating in a 17T won loan program at the lowest interest rates. The government will also establish two funds totaling 1.1T won to support domestic manufacturers of chipmaking gear and materials, with expanded tax incentives for eligible companies.
General Mills (GIS, Financial) reported Q4 Non-GAAP EPS of $1.01, beating estimates by $0.02, but revenue of $4.71B missed by $150M. Net sales decreased by 6%, with organic net sales also down 6%. The company's FY25 outlook includes flat to 1% growth in organic net sales and adjusted operating profit ranging from down 2% to flat. Adjusted diluted EPS is expected to range between down 1% and up 1% in constant currency.
Savara (SVRA, Financial) shares climbed 26% premarket after its lead candidate, molgramostim, met the primary endpoint in a Phase 3 trial against autoimmune pulmonary alveolar proteinosis (aPAP). The trial showed statistically significant improvements in gas exchange measures, with the therapeutic effect lasting over 48 weeks. The safety profile was favorable, with only 2.5% of patients discontinuing due to adverse events unrelated to the therapy.
Southwest Airlines (LUV, Financial) fell sharply in premarket trading after providing a Q2 business update. The airline expects Q2 revenue per available seat mile to decline by 4% to 4.5% year-over-year, driven by challenges in adapting revenue management to current booking patterns. Capacity is expected to increase by 8% to 9% for the quarter, with slightly higher debt payments and interest expenses anticipated.
Transocean (RIG, Financial) secured a 365-day contract extension for the Deepwater Asgard drillship with Hess (HES) in the U.S. Gulf of Mexico. The contract is expected to contribute $188M in backlog, with the program commencing in direct continuation of the current one. Earlier this week, Transocean agreed to sell the Deepwater Nautilus ultra-deepwater floater for $53.5M, resulting in a Q2 non-cash charge of $140M-$150M.
Goldman Sachs (GS) raised $3.4B for its Vintage Real Estate Partners III fund, aimed at benefiting from liquidity issues at other investment managers. The fund, which raised 23% more than its predecessor, can be used to purchase portfolios of real estate fund stakes and support deals providing liquidity to limited partners. Cash from the fund can also be loaned to fund managers and limited partners seeking liquidity without selling assets during a down market.
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