U.S. Futures Hover Below Flatline Amid Volatility and Key Data Releases
U.S. Futures Lower Following Choppy Session
U.S. stock futures hovered below the flatline on Tuesday, following a volatile session on Monday marked by a glitch in the New York Stock Exchange. The glitch led to heavy volatility in shares of Warren Buffett’s Berkshire Hathaway, miner Barrick Gold, and the halting of trading in at least 60 stocks. The Dow Jones Industrial Average dropped by 0.3%, while the S&P 500 gained 0.1%, and the Nasdaq Composite added 0.6%.
Tech stocks delivered a late rally, but shares in energy firms faltered. U.S. Treasury yields touched two-week lows after manufacturing data showed a slowdown in the sector for the second consecutive month, pointing to possible weakening in broader economic growth. Traders increased their bets that the Federal Reserve might begin reducing interest rates in September, as indicated by the CME FedWatch Tool. Analysts at ING noted that the manufacturing figures, along with a decline in construction spending, suggest that restrictive monetary policy is slowing economic activity.
U.S. Job Openings Data on Deck
Investors will scrutinize new U.S. job openings data on Tuesday to gauge labor demand in the economy. Economists expect the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) to show a decline to 8.37 million in April, down from 8.488 million in the previous month. A drop in job openings could indicate easing labor market conditions, potentially bolstering hopes for Fed rate reductions later this year. Fed policymakers are expected to keep borrowing costs steady at their upcoming meeting, awaiting more evidence of decelerating inflation before considering rate cuts.
GameStop Shares Surge
Shares in GameStop surged by more than 8% in extended hours trading, driven by stock influencer Keith Gill’s continued investment in the videogame retailer. Known online as “DeepF——-Value” and “Roaring Kitty,” Gill posted a screenshot showing a $116 million bet on GameStop. He indicated holding 5 million shares and 120,000 call options, despite the recent rally. Media sources have not independently verified the screenshots, and E-Trade is reportedly considering banning Gill due to concerns over market manipulation.
Illumina to Spin Off Grail Cancer Testing Unit
Shares in Illumina (NASDAQ
) edged higher in after-hours trading after the gene sequencing firm announced plans to spin off its Grail cancer testing division. The move, set for June 24, will list Grail on the Nasdaq as “GRAL.” This decision follows regulatory orders from U.S. and European authorities to divest Grail to maintain competition in the cancer testing market. The divestiture is a key priority for Illumina in 2024.
Oil Prices Extend Declines
Crude prices fell on Tuesday, continuing losses from the previous session, after OPEC+ signaled a supply increase later this year. The group agreed to extend most oil output cuts into 2025 but allowed for gradual unwinding of voluntary cuts by eight members. Sentiment was further dampened by weak PMI data from the U.S. and China, indicating slowing economic activity in the world’s two largest economies.
$GOOG- Alphabet is laying off employees from several teams within its cloud unit, including in sales and engineering, CNBC’s Jennifer Elias reports. The company notified employees last week of the cloud cuts, with roles being eliminated in sales, consulting, “go to market” strategy, operations and engineering, according to the report. At least 100 positions were cut, said people familiar with the matter. “As we’ve shared before, we continue to evolve our business to meet our customers’ priorities and the significant opportunity ahead,” a Google spokesperson said. “We maintain our commitment to investing in areas that are critical to our business and ensure our long-term success.”
$AAPL- Morgan Stanley analyst Erik Woodring says Apple’s Worldwide Developers Conference, or WWDC, is “historically not a major stock catalyst,” but argues that this year’s event “takes on new meaning” given that Apple will preview a host of new Gen AI software features that will feature prominently in the iPhone 16. Investor expectations are high, but the firm thinks Apple could “positively surprise,” helping to unlock pent-up demand, accelerate iPhone replacement cycles, and sustain recent stock outperformance, making the developer event a “key catalyst.” Morgan Stanley keeps an Overweight rating and $216 price target on Apple shares.
$TSLA- Piper Sandler says investors seem solely focused on Tesla’s June 13 shareholder meeting. If shareholders vote in favor of the board’s recommendations, the shares will trade sideways at worst, but if the inverse occurs, the stock price will fall, the analyst tells investors in a research note. Piper admits to not being sure what will happen in terms of the vote with over 40% retail ownership of Tesla shares. To control risk, Piper would be “tactically equal-weight” ahead of the vote. Looking beyond June, a rising focus on artificial intelligence will support an Overweight rating on the shares, contends Piper, which keeps a $205 target on the stock.
$MSFT- Microsoft announces its largest single investment in Sweden, with plans to invest SEK 33.7B over two years on cloud infrastructure and artificial intelligence. The investment also includes an investment in raising the AI competence of 250,000 people. The initiative aims to accelerate Sweden’s introduction of AI, increase the country’s long-term competitiveness through skill development of current and future workforce, and create long-term benefits for the Swedish economy. Microsoft will expand its cloud and AI infrastructure and deploy 20,000 of the most advanced GPUs to its existing data center regions in Sandviken, Gavle and Staffanstorp. “Microsoft gives individuals, companies and society at large the opportunity to increase the power of innovation and democratize the use of AI through skill development, knowledge sharing and access to the latest technology and digital infrastructure. We want Sweden to be a global leader in innovation and technology to accelerate economic growth,” Sophia Wikander, CEO of Microsoft Sweden, said.
$SNOW- Snowflake (SNOW) “announced at Snowflake Summit 2024 a new collaboration with NVIDIA (NVDA)that customers and partners can harness to build customized AI data applications in Snowflake, powered by NVIDIA AI. With this latest collaboration, Snowflake has adopted NVIDIA AI Enterprise software to integrate NeMo Retriever microservices into Snowflake Cortex AI, Snowflake’s fully managed large language model and vector search service. This will enable organizations to seamlessly connect custom models to diverse business data and deliver highly accurate responses. In addition, Snowflake Arctic, the most open, enterprise-grade LLM, is now fully supported with NVIDIA TensorRT-LLM software, providing users with highly optimized performance. Arctic is also now available as an NVIDIA NIM inference microservice, allowing more developers to access Arctic’s efficient intelligence.”
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