OP Wire 5/8 (OP – Lite)

U.S. Stock Futures Muted as Investors Weigh Fed Rate Cuts and Corporate Earnings

U.S. stock futures remained subdued today as traders contemplated the potential for Federal Reserve interest rate cuts later this year amidst a flurry of corporate earnings reports. Wall Street’s major indices closed with mixed results in the previous session, tempering the recent rally in equities.

Boosted partly by a softer-than-expected U.S. jobs report last week, investors had accelerated their anticipated timeline for a Fed rate reduction to September from November. This potential move would mark the first cut since the central bank elevated borrowing costs to a more than two-decade high to combat elevated inflation.

However, Minneapolis Fed President Neel Kashkari’s recent essay suggested that recent economic data may indicate less restrictive monetary policy than initially thought. Kashkari argued that price growth could be “settling” above the Fed’s 2% target, potentially altering the rate-cut trajectory.

In the corporate sphere, ride-hailing giant Uber Technologies and chip designer Arm Holdings are set to announce their latest quarterly earnings. Investors are keen on Uber’s revenue and booking figures to gauge its growth trajectory, while attention will focus on Arm’s royalty and license revenues.

During extended hours trading, social media platform Reddit (NYSE:RDDT) saw a surge in shares following upbeat revenue guidance for the current quarter, driven by solid user growth. However, the company reported a widening first-quarter loss due to expenses related to its IPO in March.

In the automotive sector, California-based Rivian Automotive (NASDAQ:RIVN) reiterated its plan to manufacture 57,000 electric vehicles in 2024, falling short of analysts’ expectations. Meanwhile, Toyota Motor Corp (NYSE:TM) reported a substantial increase in annual profit but signaled a cautious outlook for the current year amid softer economic conditions.

Adding to market uncertainty, the U.S. revoked licenses permitting firms like Intel (NASDAQ:INTC) and Qualcomm (NASDAQ:QCOM) to supply chips to Chinese telecom giant Huawei Technologies. This move underscores ongoing tensions between the U.S. and China, with national security concerns cited as a driving force.

Crude prices slipped as industry data showed an increase in U.S. crude inventories, signaling weak demand in the world’s largest energy consumer. Data from the American Petroleum Institute revealed a growth of 0.5 million barrels in U.S. oil inventories, contrary to expectations for a drawdown.

As investors navigate a landscape of evolving economic indicators and geopolitical tensions, uncertainty remains a key theme shaping market sentiment. Stay tuned for further developments as market participants digest earnings reports and monitor central bank policy signals.

$DIS- Loop Capital keeps a Buy rating and $140 price target on Disney after the stock’s near-10% decline on Q2 results. The company’s normalized theme park business is an excellent long-term business, with strong barriers to entry that is unlikely to be disintermediated by the internet, and only has one strong global competitor, the analyst tells investors in a research note. While the lower demand, in addition to the timing of expenses and Easter, will lead to flat theme park profits in the current quarter, these are set to rebound in the September periodSee my comprehensive rundown posted in the activity feed of the OP site/app

$CRUS- TD Cowen raised the firm’s price target on Cirrus Logic (CRUS) to $115 from $100 and keeps a Buy rating on the shares. The firm said its March quarter’s typically soft seasonality results came in materially above expectations on stronger mobile shipments at Apple (AAPL) with June quarte guide also above consensus.

$MSFT- Microsoft plans to invest $3.3B on to build a new AI data center in Wisconsin as well as training programs to educate locals about AI jobs in manufacturing, The Wall Street Journal’s Tom Dotan reports. The new site will initially create 2,300 construction jobs and eventually as many as 2,000 data center jobs, according to the report. “We have a huge responsibility to help ensure this technology serves people,” Microsoft President Brad Smith said in an interview. “Part of that is ensuring that it works safely and remains under human control. But another part of it is really supporting and aiding the transition of the economy.”

$AAPL- Shipments of Apple iPhones in China were up about 12% in March after the company and its retailers reduced prices, according to official data, Bloomberg reports. Government data showed shipments of foreign-branded smartphones, the majority of which were iPhones, grew to 3.75 million units in March from a year earlier, according to the report.

The Biden administration has revoked export licenses that allow Intel (INTC) and Qualcomm (QCOM) to supply Huawei with semiconductors, reported Financial Times’ Demetri Sevastopulo. The Commerce Department’s move affects the supply of chips for Huawei’s laptop computers and mobile phones, people familiar with the situation told Financial Times. The Commerce Department confirmed to the Financial Times that it had “revoked certain licenses for exports to Huawei,” but did not name which U.S. companies would be affected, the report noted. Other publicly traded semiconductor companies include AMD (AMD), Marvell (MRVL), Microchip (MCHP), Micron (MU), Nvidia (NVDA) and Texas Instruments (TXN).

Hey OP…. Great job yesterday on the chat plays – quick scalps made multiple days goal. Today I’ll be scalping and adding to SBUX LEAPS. With the first ever drop in same store sales (3%) since 2020 the stock has dropped 25%… I’ll take a stab at the entry around this level as we did with TGT a few months back when everyone was bashing that one….. Nice job on UNG y’all… stock is up 14% this week LIFERS- still a few spots remaining to get into the Entrex shares at $.10 – email me to be included on the zoom with Steve Watkins so you can hear more. See you all in chat. 

If you want to get the plays of the day then signup for Gold, and get a FREE TRIAL

If you want to get the plays of the day then signup for Gold, and get a FREE TRIAL