US futures rise
- Dow Jones Industrial Average is up 0.3%
- S&P 500 is up 0.2%
- Nasdaq 100 is up 0.2%
US futures are on the rise this morning as upbeat updates out of corporate America calm nerves about inflation and future interest rate hikes. Major banks are pushing higher after passing their annual stress test with flying colours and tech stocks are also climbing.
Federal Reserve chair Jerome Powell said this morning that the central bank is likely to raise interest rates at least two more times in 2023 to bring inflation down, once again pushing back against the market’s more optimistic expectation that we will see just one more rate hike next month before the Fed presses pause. We are seeing bets on a second hike before the year is out increase as a result. That echoed the sentiment from the European Central Bank and Bank of England this week, as the two also signalled more hikes are to come.
We discovered this morning that initial jobless claims came in at 239,000 in the week to June 24, down from the 265,000 reading we saw the week before and well below the 266,000 forecast by economists. That is another data point showing the labour market remains stronger than expected. Meanwhile, revised figures showed the US economy grew by 2% in the first quarter, coming in faster than the 1.4% growth pencilled-in by analysts to suggest it is powering ahead.
Later today, we have pending home sales data out this afternoon and a speech from president of the Atlanta Fed Raphael Bostic tonight.
Most discussed Reddit stocks
Below is a list of the top 10 most mentioned US stocks on the WallStreetBets thread on Reddit over the last 24 hours on June 29, 2023, according to data from Quiver Quantitative. Exchange-Traded Funds (ETFs) and other instruments have been excluded:
- NVIDIA
- Virgin Galactic
- Tesla
- C3.ai
- Apple
- Micron Technology
- BlackBerry
- Visa
- Carvana
- Advanced Micro Devices
Most active US stocks before the bell
Below are the most active stocks with a valuation of at least $500 million before the bell, based on trading data taken from Bloomberg:
- Joby Aviation
- Lilium
- Tesla
- BioXcel Therapeutics
- Virgin Galactic
- Palantir
- Opendoor Technologies
- Carnival
- Nikola
- Lucid Group
US premarket winners and losers
Here are the stocks worth at least $500 million experiencing the sharpest movements in premarket trade, according to data from Bloomberg:
| Winners | % | Losers | % |
| Joby Aviation | 14.2% | BioXcel Therapeutics | -67.7% |
| Greenbrier | 13.2% | Alvotech | -10.9% |
| Lilium | 11.3% | Beneficient | -7.0% |
| FREYR Battery | 10.5% | Forrester Research | -6.8% |
| Archer Aviation | 9.4% | Roivant Sciences | -6.1% |
| Overstock.com | 8.9% | Ashland | -5.6% |
| Sonoco Products | 7.2% | Day One Biopharmaceuticals | -4.8% |
| Opendoor Technologies | 5.6% | Aclaris Therapeutics | -4.4% |
| Wallbox | 5.6% | Millicom International Cellula | -4.1% |
| Worthington Industries | 5.1% | Applied Digital | -3.8% |
Top US stocks to watch
Apple is up 0.3% at $189.92 and could earn that $3 trillion valuation after closing at yet another all-time high yesterday. The iPhone maker needs to close above $190.73 in order to become the first publicly-listed company to earn the elusive valuation. Dan Ives from Wedbush said he sees Apple’s fair valuation could be as high $3.5 trillion by the 2025 financial year, ‘with a bull case $4 trillion’. Its growth prospects, underpinned by AI, the shift to services and new hardware, have attracted investors in 2023 and it has also appealed to those looking for companies that can deliver reliable earnings and cashflow amid the uncertain economic outlook.
NVIDIA is up 0.9% and trying to recoup the ground lost yesterday, when we saw chipmakers slide amid reports that the US government plans to broaden its ban on exports of advanced semiconductors to China to threaten a significant slice of the industry’s revenue. NVIDIA has designed less powerful chips for China since being told to stop exporting its most advanced products but the government is now thought to be drawing up plans to close this loophole, among others. NVIDIA’s chief financial officer Colette Kress said it is not anticipating any immediate financial impact but warned it could cause a ‘permanent loss of opportunities for the US industry to compete and lead in one of the world’s largest markets and impact our future business and financial results’. Most analysts said they believe this may cause a short-term pullback but shouldn’t dampen the AI-infused outlook, with some including Truist Securities suggesting it could present a buying opportunity.
That is also weighing on other chipmakers. Truist Securities analyst William Stein said tighter export controls would impact the likes of AMD, Intel and other semiconductor makers but said the ‘greatest impact’ will be on NVIDIA. AMD is up 1.8% today while Intel is up 0.3%.
Meanwhile, memory chipmaker Micron Technology warned that China’s decision to ban it from supplying chips to key projects represents ‘a significant headwind that is impacting our outlook and slowing our recovery.’ Still, the stock is up 2.3% today after its outlook for the fourth quarter came in just ahead of estimates after CEO Sanjay Mahrotra said it is now past the worst of its problems. ‘We believe that the memory industry has passed its trough in revenue, and we expect margins to improve as industry supply-demand balance is gradually restored,’ he said. Piper Sandler upgraded the stock to Neutral this morning thanks to the signs that inventory problems are easing. Morgan Stanley, which remains more pessimistic with an Underweight rating, said there were cautious comments and that ‘most tenets of the bull case have fallen short, and the company lacks AI products to benefit from the one strong end market.’
The largest banks in the US are climbing higher today after the results from the Federal Reserve’s annual stress test said JPMorgan, Citigroup, Bank of America, Wells Fargo, Morgan Stanley and Goldman Sachs all have enough capital to survive a severe downturn, paving the way for them to return more cash to shareholders. They are all up 0.3% to 2% today. A total of 23 banks, all with over $100 billion worth of assets, were tested and the Fed said the group had twice as much capital as necessary to cover projected losses under an extreme scenario. That follows on from the banking crisis back in March that saw several lenders collapse and is likely to lead to tighter capital requirements being introduced, which could limit the amounts dished out to investors.
Microsoft is up 0.1% while Activision Blizzard is up 0.3%. Chief executives from both companies testified in court yesterday as they try to defend their $69 billion merger against the Federal Trade Commission’s efforts to stifle the deal on competition grounds. Microsoft CEO Satya Nadella recommitted to keeping the popular Call of Duty franchise available on Sony’s PlayStation console and argued that making them exclusive to Xbox would ‘make no strategic sense’. Microsoft is striving to close the deal before a deadline of July 18 which, if missed, risks scuppering the deal and a $3 billion penalty, but the Federal Trade Commission is arguing the deal should not be completed until a more extensive trial begins in August.
Salesforce is trading marginally lower today after announcing it will invest $4 billion into its UK arm over the next five years as it looks to capitalise on growing demand from businesses looking to digitally transform their businesses and adopt AI. That budget builds on its previous five-year plan outlined back in 2018 to invest $2.5 billion into the country.
Tesla is up 1.5% as markets become more bullish ahead of the electric carmaker’s results next month. A report from Driven.io suggests Tesla has almost sold out all its vehicles available for sale in Australia and that there are fewer than 20 available nationwide. That suggests decisions to lower prices and offer free charging has helped clear inventory levels. That comes after analysts highlighted the possibility that Tesla sales in China could also hit a new record in the second quarter, which would be a major boost to keep the excitement around Tesla shares alive.
Nike is up 0.9% ahead of fourth quarter and full year earnings out after markets close today. Demand for premium athleisure wear has remained strong in a challenging time for the wider retail space, although Nike has struggled to protect its bottom-line in the inflationary environment. It is now focused on profitable growth but markets remain doubtful for the fourth quarter, forecasting another drop in adjusted EPS. Much of the onus will be on the outlook for the new financial year, when markets hope it can get back on the right track – although China’s recovery and recession risks threaten this. You can find out everything you need to know, including all the numbers to look out for and our technical analysis, in our Nike Q4 Earnings Preview.
Visa is up 0.4% this morning. The payments giant announced yesterday that it will buy Brazilian firm Pismo, which supplies tech to payment firms and banks, in a $1 billion deal. Visa plans to use Pismo’s tools to help it broaden the support and services it can offer to fintech clients and institutions with ‘more differentiated core banking and issuer solutions’. Bloomberg Intelligence also released a note that said Visa and its rival Mastercard, which is up 0.2% today, are both well positioned to benefit from the ongoing rebound in demand for leisure and travel as China reopens and airlines add capacity.
The big day has arrived for Virgin Galactic, which is up 2.7% ahead of its first commercial spaceflight due to be launched today. A three-person crew are due to experience a 90-minute flight to conduct science experiments. A successful mission would mark a major milestone for the company, which now needs to show it can deliver its flight schedule on time with the second flight pencilled-in for this August.
Joby Aviation is up 14.2% and at levels last seen in November 2021 after South Korean firm SK Telecom invested $100 million after expanding its partnership with the flying car company. Joby Aviation shares soared higher yesterday after securing regulatory approval in the US to expand testing of its air taxi. Rival Lilium is also attracting attention and is up 11.3%, while Archer Aviation is trading 9.4% higher. .
Overstock.com is up 8.9% and at nine month highs after announcing it plans to relaunch the Bed Bath & Beyond brand in Canada within the next week before following in the US after it purchased the brand and intellectual property this week.
BlackBerry is up 12.6% and at nine month highs as investors get excited about the prospect that it could split into two standalone businesses. Revenue soared to $373 million from just $168 million the year before in the latest quarter as billings grew and its pipeline progressed, while adjusted EPS of $0.06 was welcome compared to the $0.05 loss anticipated by analysts. The results were aided by the sale of its portfolio of patents, which provided a much needed boost to otherwise disappointing results. CEO John Chen, who is spearheading a strategic review of the business, said the board have asked the question as to whether there are alternative ways to boost shareholder value, including a separation of its cybersecurity and IoT businesses.
C3.ai is up 3.1% after Oppenheimer initiated coverage on the stock with a Perform rating, providing some support to the stock after it hit three-week lows this week.
Carvana is up 5.9% and at a nine month high today as the rally, spurred-on by narrower losses and a commitment to return to profit in early May, continues. A short-squeeze could also be contributing to the surge considering the significant short interest on the stock.
