Mixed U.S. Stock Futures Reflect Fed’s Inflation Commentary and Earnings Anticipation
U.S. stock futures presented a mixed picture on Tuesday as investors absorbed fresh inflation commentary from Federal Reserve policymakers and anticipated a new wave of quarterly earnings reports.
In the prior session, Wall Street indices experienced gains, fueled by optimism that a softer-than-expected monthly U.S. labor market report might prompt the Fed to accelerate its interest rate cut timeline from November to as early as September. Chipmakers notably performed well, with Arm Holdings rising 5.2% ahead of its fiscal fourth-quarter results.
However, shares in Spirit Airlines (NYSE:SAVE) stumbled following a weak current-quarter revenue outlook from the low-cost carrier.
Richmond Fed President Thomas Barkin weighed in on interest rates, characterizing them as “restrictive” enough to temper demand and mitigate inflationary pressures. Barkin expressed optimism that the current rate range of 5.25% to 5.50% should suffice to align price growth with the Fed’s target, though he acknowledged the stubborn nature of inflation.
Ahead of the opening bell, Walt Disney is set to unveil its second-quarter results, following a recent victory in a proxy battle with activist investors. Shareholders supported CEO Bob Iger’s turnaround plan, with Disney shares up over 28% in 2024. Investors eagerly anticipate further details on Disney’s streaming business and overall strategy.
In other news, Apple Inc (NASDAQ:AAPL) is reportedly developing an in-house chip, internally known as ACDC (Apple Chips in Data Centers), to power artificial intelligence programs in data centers. This move underscores Apple’s commitment to advancing in the AI sector.
Meanwhile, crude prices remained flat on Tuesday, with uncertainty lingering due to Israeli strikes in southern Gaza, which raised doubts about a potential ceasefire in the region.
As markets navigate through evolving economic indicators and corporate earnings, investors remain vigilant, assessing the implications for future market movements.
Instacart (CART) and Uber (UBER) announced a strategic partnership to bring Uber Eats restaurant delivery to Instacart customers. In the coming weeks, Instacart customers nationwide will be able to use the Instacart app to order from hundreds of thousands of restaurants, powered by Uber Eats. The experience will be featured through a new “Restaurants” tab in the Instacart app, providing an interface that allows consumers to choose from a selection of nearby restaurants, browse menus, place orders, and track deliveries in real-time. Customers will be able to order groceries for the week from Instacart’s more than 1,500 national, regional, and local retail banners across more than 85,000 stores – all fulfilled by Instacart and its shopper community – as well as dinner for the night from hundreds of thousands of restaurants, which will be fulfilled by Uber Eats and the couriers on its platform. Instacart+ members will also get even more value from their membership at no additional cost, with $0 delivery on grocery and restaurant orders over $35.
$NVDA-Â Goldman Sachs raised the firm’s price target on Nvidia to $1,100 from $1,000 and keeps a Buy rating on the shares, which remain on the firm’s Conviction List. The firm increased its FY25-27 non-GAAP EPS estimates, on average, by 8% to reflect intra-quarter industry data points indicative of continued robust AI server demand and improving supply. Despite the stock’s year-to-date outperformance, Goldman sees positive EPS revisions driving another leg up in the stock, the analyst tells investors.
$BABA-Â Truist analyst Youssef Squali lowered the firm’s price target on Alibaba to $113 from $114 but keeps a Buy rating on the shares ahead of its Q4 results next week. The analyst notes the improvement in consumer spending shown in China’s economic data and a step-up in investments at Cainiao and in International Commerce as the management lays the foundation for sustainable growth in logistics and ecommerce, even though the country risk “remains elevated”.
$WMT-Â UBS analyst Michael Lasser raised the firm’s price target on Walmart to $69 from $63 and keeps a Buy rating on the shares. The firm thinks Walmart generated good momentum in Q1 despite the volatile spending backdrop throughout the period, the noise created by an earlier Easter, and the ongoing headwinds facing the consumer, especially lower income households, the analyst tells investors in a research note. UBS thinks the quarter will “check the boxes” and show that Walmart’s investment case stands out, that the company will show that the retailer continues to gain share, domestically and abroad, and that the stock has room to run.
$TGT- Citi upgraded Target to Buy from Neutral with an unchanged price target of $180. The analyst believes Target has emerged as “one of the winners within the retail landscape” with an opportunity to improve EBIT margin in the years to come. Following a “choppy” 2022 and 2023, the company is “on the right track” with inventory well-controlled, easier sales comparisons beginning in Q2 and conservative guidance, the analyst tells investors in a research note. Citi believes the market may have reacted too negatively to some retailers amid a recently more uncertain consumer environment, and is attracted to retailers “that have mindshare for value and idiosyncratic opportunities to improve margins.” It says Target checks both boxes.
If you want to get the plays of the day then signup for Gold, and get a FREE TRIALIf you want to get the plays of the day then signup for Gold, and get a FREE TRIAL
Responses