This morning, the stock market is seeing a dip across major indexes. Here's a quick summary:
- The S&P 500 futures are down by 20 points, a 0.4% decrease.
- Nasdaq 100 futures have fallen by 90 points, marking a 0.5% drop.
- Dow Jones Industrial Average futures are also down, decreasing by 211 points or 0.5%.
The decrease in stock futures is partly due to the recent movements in the Treasury yields, with the 10-year note yield increasing by three basis points to 4.36%. Additionally, significant drops in big tech and chipmaker stocks have contributed to the market's negative outlook this morning.
In other news, WTI crude oil futures are on the rise, up 1.4% at $84.89 per barrel. As for today's economic data, we're looking at February Factory Orders and the February JOLTS - Job Openings, both set to be released at 10:00 AM ET.
Overseas, manufacturing PMI readings from Germany, France, Spain, Italy, and the U.K. have surpassed expectations, providing a mixed picture of the global economic landscape.
Here are some key corporate updates:
- PVH (PVH, Financial) shares dropped by 21.3% after announcing earnings and revenue forecasts below expectations. They also approved a $2 billion increase in their stock repurchase program.
- Health insurers like CVS Health (CVS, Financial), Elevance Health (ELV, Financial), UnitedHealth (UNH, Financial), and Humana (HUM, Financial) saw declines due to updates on Medicare Advantage rates.
- Veeva Systems (VEEV, Financial) announced the departure of CFO Brent Bowman, with Tim Cabral stepping in as the interim CFO.
- Nokia (NOK, Financial) saw a slight increase in its stock price after Lumine Group completed the purchase of certain businesses from Nokia.
- Eli Lilly (LLY, Financial) received a price target increase from Citigroup.
- Estee Lauder (EL, Financial) was upgraded to Buy from Neutral at Citigroup.
- Disney (DIS, Financial) is making progress in its proxy battle with Nelson Peltz (Trades, Portfolio)'s Trian Partners.
- General Electric (GE, Financial) launched as an independent company following the GE Vernova spin-off.
- Boeing (BA, Financial) faced minor setbacks due to production issues.
- Trump Media & Technology Group Corp. (DJT, Financial) experienced a pre-open slide after reporting a net loss in FY23.
Looking at overnight developments, Asian markets ended mostly flat with the Hang Seng leading gains. Economic data from South Korea, India, and Australia showed mixed results. In Europe, major indices are hovering near their opening levels, with manufacturing PMI readings coming in better than expected in several countries.
Today's News
Fidelity Investments announced it will start charging a new $100 servicing fee for 59 ETFs from nine different companies starting June 3. This move aims to cover the costs of listing these products on its platform amidst increasing competition and decreasing expense ratios. The affected companies, including Simplify Asset Management and AXS Investments, represent less than 0.5% of the mutual funds and ETFs on Fidelity's platform. Fidelity stated that these support fees are essential for maintaining the technology and services required to provide a secure and positive experience for investors.
Palantir Technologies (PLTR, Financial) disclosed a significant 6.5% stake in MSP Recovery (LIFW, Financial), a healthcare recoveries and data analytics firm in the U.S. and Puerto Rico. Following the announcement, MSP Recovery's stock surged by 47% to $0.98, while Palantir's shares saw a modest decline of 1% to $22.60 during pre-market trading.
The U.S. Food and Drug Administration's proposed ban on menthol-flavored cigarettes in the United States appears to be losing momentum after the White House missed its self-imposed deadline to finalize the rules by March 2024. Advocacy groups, including the Campaign for Tobacco-Free Kids and the NAACP, have expressed disappointment over the delay, accusing the administration of deferring to the tobacco industry's interests.
SLB (SLB, Financial) announced its plans to acquire ChampionX (CHX, Financial) in an all-stock deal valued at approximately $7.8 billion. This acquisition is expected to enhance SLB's position in oilfield services by integrating world-class production chemicals and artificial lift technologies. ChampionX shareholders are set to receive 0.735 shares of SLB common stock for each ChampionX share, making them owners of about 9% of SLB's outstanding shares.
Google (GOOG, Financial) (GOOGL, Financial) is shutting down its Google Podcasts service, urging users to switch their subscriptions to YouTube Music. This move is part of Google's strategy to consolidate its podcasting efforts on YouTube, given its widespread popularity and the growing trend of video podcasts. The integration with YouTube Music also opens up opportunities for premium subscriptions.
Nurix Therapeutics (NRIX, Financial) and Gilead Sciences (GILD, Financial) have agreed to extend their research collaboration for an additional two years. This partnership focuses on developing drug candidates using Nurix’s drug discovery platform, with Gilead having the option to license these candidates. Nurix will receive a $15.0 million extension fee and could earn up to $1.7 billion in additional payments.
Xiaomi (XIACF, Financial) reported receiving 88,898 pre-orders for its first electric vehicle, the SU7, within 24 hours of its launch. The overwhelming response prompted the company to ask its suppliers to increase production capacity to meet a monthly target of 10,000 cars. The high demand for the SU7, priced at approximately $30,000, highlights Xiaomi's strong entry into China's competitive EV market.
Amazon Web Services (AMZN, Financial) is expanding its free credit program to support startups using artificial intelligence models. This initiative aims to lower the barriers for startups to leverage AI tools, including those from Anthropic, Meta Platforms (META), and others. AWS's move is designed to bolster its market share in the cloud service provider space, where it leads with over 50% market share.
AstraZeneca (AZN, Financial) and Daiichi Sankyo (DSNKY, Financial) received U.S. approval for their biologics license application for datopotamab deruxtecan in treating metastatic HR-positive, HER2-negative breast cancer. This approval marks a significant milestone in the development of this promising treatment option.
Petco Health and Wellness Company (WOOF, Financial) experienced a downturn in early trading following a double downgrade from Bank of America. Analysts cited concerns over Petco's eroding market share and increasing competition from online retailers such as Amazon (AMZN, Financial) and Chewy (CHWY).
The U.S. is reportedly urging South Korea to impose further restrictions on the export of advanced semiconductor technology to China. This request aims to align South Korea's export controls with those of the U.S., as part of efforts to hinder China's semiconductor industry development over national security concerns.
Frontier Group Holdings (ULCC, Financial) is adjusting its strategy to focus on expanding its network in higher fare markets, such as Seattle and Detroit. This shift aims to boost profitability by targeting premium travel and business travel for small companies, moving away from heavily contested leisure markets.
Verve Therapeutics (VERV, Financial) announced a pause in patient enrollments for its Heart-1 Phase 1b clinical trial for VERVE-101 following a serious adverse event. The company is now prioritizing the development of VERVE-102, which targets the same gene but with a different delivery system.
Japan has approved approximately ¥590 billion in subsidies to domestic chip company Rapidus, part of its efforts to strengthen semiconductor manufacturing capabilities. These funds will support Rapidus in purchasing chipmaking equipment and developing advanced back-end chipmaking processes.
Estée Lauder (EL, Financial) has seen a significant drop in sales and profit due to challenges in the travel retail category. However, Citigroup upgraded the company to Buy from Neutral, citing optimism for a topline inflection point as inventories balance in the Asia/Pacific travel retail sector.
SOBR Safe (SOBR, Financial) announced an initial purchase of its SOBRcheck and SOBRsure devices by Lake Erie Interlock. This move expands SOBR Safe's service offerings across Ohio, providing point-of-care screening and continuous monitoring solutions.
CME Group's (CME, Financial) average daily volume in March decreased compared to February, with interest rate average daily volume hitting 11.2 million contracts. The exchange also saw increases in options and energy average daily volumes.
ShiftPixy (PIXY, Financial) has acquired a provider of human capital across the Western U.S., marking its second asset purchase agreement. This acquisition is part of ShiftPixy's accelerated growth goals and national market expansion efforts.
Pre-market trading saw significant movements in various stocks, including XTI Aerospace (XTIA) and Kidpik (PIK), among others. These movements reflect a dynamic start to the trading day, with several companies making headlines due to mergers, acquisitions, and other significant announcements.
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