S&P 500 analysis: Top US stocks to watch before the bell

US futures under pressure

• Dow Jones Industrial Average is down 0.1%
• S&P 500 is down 0.1%
• Nasdaq 100 is down 0.2%

US markets are treading water as they await for Federal Reserve chair Jerome Powell to provide his testimony to Congress this afternoon (which will continue tomorrow), giving traders a chance to gauge the future path of interest rates after they were left unchanged in the last meeting but were accompanied by hawkish commentary. 

Fed funds are currently pricing in another rate hike in July, according to the CME FedWatch Tool, but believe this will be the last one of 2023 as bets increase that the Fed will pause and hold rates higher for longer before tightening further. That will place the spotlight on any commentary on the future path of rates.

 

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 21, 2023, according to data from Quiver Quantitative. Exchange-Traded Funds (ETFs) and other instruments have been excluded:

1. Tesla
2. NVIDIA
3. Visa
4. Virgin Galactic
5. C3.ai
6. FedEx
7. Advanced Micro Devices
8. Intel
9. Palantir
10. Carnival

 

Most traded stocks before the bell

Below is a list of the 10 most active stocks before the bell today, based on trading volumes taken from Bloomberg:

1. LumiraDX
2. Faraday Future Intelligent Electric
3. Nikola
4. Tesla
5. Ideanomics
6. Virgin Galactic
7. Marathon Digital Holdings
8. VCI Global
9. Riot Platforms
10. Canoo

 

US premarket winners and losers

Below is a table outlining the stocks experiencing the sharpest movements before the bell today, according to data from Bloomberg:

Winners	% Change	Losers	% Change
LumiraDX	37.1%	Pieris Pharmaceuticals	-56.7%
PureCycle Technologies	15.2%	uniQure	-32.7%
Know Labs	13.7%	VCI Global	-17.9%
Patterson	9.3%	Red Cat Holdings	-14.4%
American Superconductor	9.2%	Cabaletta Bio	-11.5%
Exact Sciences	7.2%	Imperial Petroleum	-9.4%
MamaMancini	6.8%	Akero Therapeutics	-8.4%
Terawulf	6.1%	Black Diamond Therapeutics	-7.3%
Nikola	6.1%	InspireMD	-7.3%
Alaunos Therapeutics	6.1%	Eton Pharmaceuticals	-6.8%

 

Top US stock news

Tesla is up 1.3% and at fresh nine month highs of $278.10 as investors shrug-off a warning from Barclays that the electric carmaker has rallied too high, too quickly. Barclays said the rally in Tesla shares this year, with the stock trading 2.5 times higher than at the start of 2023, has been driven by hype around artificial intelligence and excitement around it opening its charging network to other carmakers like Ford, General Motors and Rivian. ‘While we aren’t surprised that the stock has participated in the rally, we believe it is prudent to move to the sidelines,’ said analyst Dan Levy, which downgraded Tesla to Equal Weight. That came despite him raising the target price to $260 from $220, stating that the rally was ‘too sharp’. That doesn’t appear to hurting appetite and shares are finding support from several avenues today. This includes news that Texas is requiring charging stations to adopt Tesla’s connector in what is another big win and an update from CEO Elon Musk, who said the firm is likely to make a significant investment in India after meeting prime minister Narendra Modi.

Rivian is up 1.7% and at three month highs of $15.96 after announcing yesterday that it will adopt Tesla’s charging connector from 2025 and gain access for its customers to its Supercharger network from 2024. CEO Richard Scaringe said Rivian will continue to expand its own charging network but said the deal with Tesla should see its network ‘become cashflow positive fairly quickly’. Mizuho cut its price target on Rivian to $27 from $30 this morning.

Chinese electric carmakers are also trading higher after China announced it has extended tax breaks for those buying electric vehicles through to 2027 in an effort to drive demand. NIO is up 2.3%, XPeng is up 2.4% and Li Auto is trading 3.4% higher. That is also helping provide support to the likes of Tesla today.

Smaller electric vehicle maker Nikola is up 5.3% amid reports it is preparing to lay off 290 employees, according to Reuters. That comes just a week after Nikola outlined plans to reduce its cash burn to under $400 million annually by 2024.

FedEx is down 2.5% at $225.80 after warning that its cost-cutting plan is struggling to offset the slump in demand for package deliveries, leading to a soft outlook for the new financial year. FedEx earnings came in slightly better than expected in the fourth quarter despite revenue coming in soft, suggesting it is managing to improve profitability. Still, annual adjusted EPS slumped to $14.96 from $20.61 the year before and FedEx said it is targeting $16.50 to $18.50 in the new financial year – which was disappointing considering the middle of that range was well below the $18.31 forecast. With demand still under pressure, there is a heightened need to deliver its cost reduction plan, with FedEx eyeing $1.8 billion of savings by the end of the current financial year, rising to $4 billion by fiscal 2025 and then $6 billion by fiscal 2027. JPMorgan raised its price target on FedEx to $251 from $228 this morning while Bernstein upped its view to $284 from $261. BofA Global Research trimmed its view to $290 from $295.

The results are also weighing on rival delivery giant UPS, which is down 1% before the bell.

Microsoft is down 0.5% while Activision Blizzard is flat. The merger between the two companies will be tested this week when CEOs from both businesses take part in a five-day hearing that will start tomorrow, when they will argue against the Federal Trade Commission’s efforts to block the combination. The hearing will run until June 29 and the clock is ticking down considering the deadline for the deal to close is July 18.

NVIDIA is down 0.5% after it closed at fresh all-time highs yesterday after having its senior unsecured debt upgraded by Moody’s to A1 from A2, with the ratings agency stating NVIDIA has a dominant and sustainable position in the GPU and broader hardware market as companies upgrade their computing platforms.

AMD was also had its senior unsecured debt rating upgraded by Moody’s yesterday, but to A2 from A3, which failed to yield the same result. The chipmaker is down 0.6% today. The company announced today that it will invest some $135 million in Ireland to expand its computing research, development and engineering operations in the country.

Intel is down 0.6%. The recent rally, spurred-on by its expansion in Europe, faltered yesterday after shares briefly hit their highest level in almost 11 months. The long red candle we saw yesterday suggests appetite flipped at these levels. We discovered over the weekend that the company will spend over EUR30 billion, around $33 billion, to build two chipmaking plants in Germany – marking the biggest-ever foreign investment into the country. The German government has agreed to provide Intel with EUR10 billion of subsidies, according to media reports, more than the original EUR6.8 billion envisioned. Intel is pushing into Europe and is aimed at helping it catch up the ground lost to rivals like AMD, NVIDIA and Samsung over the years. That comes soon after Intel announced it was building a $4.6 billion factory in Poland and Israel said over the weekend that Intel was building a $25 billion factory there.

The recent rally in C3.ai shares is also being tested after the stock hit 19-month highs on Friday, with the stock up 0.6% today. The company, which has risen thanks to the hype around AI this year, is holding an investor day tomorrow to provide an update on its product roadmap and to demonstrate its generative AI tools – making it a key event that could provide fresh momentum or test its valuation.

Palantir is up 1% at $15.95 and also remains below the 18-month highs hit late last week. The stock took a heavy hit yesterday after Raymond James downgraded the stock to reflect more limited upside following the surge in 2023. It still rates Palantir at Outperform (down from Strong Buy) and said the downgrade was prompted by the ‘recent run in shares coupled with a premium valuation’, with the stock not far off the broker’s target price of $18 – which matches the highest set on Wall Street.

Cryptocurrency stocks are trading higher this morning, with Coinbase up 3.3%, Riot Platforms up 3.8% and Marathon Digital trading 4.5% higher. That comes amid a recovery in bitcoin prices, which are trading higher for a third consecutive session today and at its highest level in over six weeks at over $28,800.

Virgin Galactic is down 2.2% and falling from a four-month high. The stock has proven highly volatile since announcing it will launch its first commercial flight before the end of this month, having experienced wild swings over the past two days. Analysts have hailed the announcement as a milestone but said it needs to now deliver its flight schedule on time to show it is reliable and consistent. The rally has pushed the Relative Strength Index into overbought territory, which may provide some resistance.

Carnival is up 0.4% at $15.97 after Barclays raised its target price on the cruise line operator to $18 from $13. The company hit a 13-month high last week amid a broader rally in cruise line stocks as they continue to bounce back from the pandemic, but has found it harder to sail higher since then, with the RSI deep in overbought territory. The company reports results next week, providing an opportunity for the firm to provide a fresh catalyst or risk disappointing and causing the rally to unravel. JPMorgan said last week that demand for cruises has continued to improve.

Eli Lilly is up 0.3% but still lingering just below the all-time highs we saw last week. The pharmaceutical giant, which revealed yesterday that it will buy Dice Therapeutics for around $2.4 billion, had its drugs designed to treat type 2 diabetes developed with partner Boehringer Ingelheim approved for use on children by the Food & Drug Administration late yesterday. The drugs, named Jardiance and Synjardy, have been approved for use on adults for years but will now be expanded to patients over 10 years old.