Home-improvement retailer Lowe’s beat earnings expectations in the second quarter, and reiterated its full-year guidance despite easing demand for DIY projects.Macy’s also topped expectations but issued a cautious outlook.The Dow Jones Industrial Average futures were up 0.1%, S&P 500 futures rose 0.4% and Nasdaq futures gained 0.6%.
Indices made a foray into positive territory yesterday, after a series of downturns fueled by China’s economic woes and fears over the trajectory of key interest rates.On Wall Street, the session was hesitant at first, then the big tech stocks rose.The rest of the market didn’t really follow suit, resulting in another big gap between the Dow Jones and the Nasdaq: the former fell by 0.11%, while the latter gained 1.65%, driven by Microsoft , Apple , Amazon and Meta , but also by Nvidia , which soared by 8.5% and thus largely contributed to the shift in the technology index.
The new star of artificial intelligence is due to publish its results and outlook tomorrow evening, which yesterday created a call for air in the form of FOMO, i.e.the anxiety of missing out on something.Investors, who are always on the lookout for the ultra-rewarding bet, are ready to try the Nvidia adventure, even if the stock has already tripled this year.For good measure, Tesla also rebounded by more than 7% after a rough patch (six sessions down).
A turnaround fueled by broker Baird, who ranked the stock among his best ideas of the moment.
The filing of Arm’s IPO preliminary documents also boosted indices.Arm is a special player in the world of semiconductors, thanks to a technology used by a large number of consumer electronics companies.
Arm is the flagship of the British semiconductor industry, but its owner is Japan’s Softbank, who is orchestrating its IPO in New York and may well be able to restore its reputation after some very unsuccessful investments.The Californian backbench is scrambling for a minority stake, after a certain Nvidia failed in 2021 to buy Arm, in the face of an anti-trust outcry and opposition from its smaller peers.In short, Arm’s arrival is fueling the technology narrative, with a deal whose valuation could exceed $60 billion, making it the biggest IPO in 2023.At this stage, only the prospectus for a Nasdaq listing has been published: we’ll have to wait a little longer for the precise details of the operation, in particular the proposed price range.
The IPO should happen in September.Arm’s latest financial performance hasn’t exactly been explosive, but the company is a cash machine, and its introductory document is peppered with the magic phrase of the moment, “artificial intelligence”.Narration, once again, is likely to make the difference.
Big tech aside, the news continues to be dominated by high US bond yields ahead of Thursday’s Jackson Hole symposium, which will be punctuated by a speech from Jerome Powell on Friday.The Fed boss will surely help adjust the gauge for the outlook on rates.Economists are expecting a hawkish stance on inflation.But since the devil is in the detail, Powell would have to show even more concern than the market expects to change the prognosis for the Fed’s future monetary policy decisions.In China, after the turmoil of the last few days in the face of the worrying economic situation, the day was a little calmer, despite the absence of a strong reaction from the authorities to the real estate crisis.
Economic highlights of the day:
US Existing Home Sales and the Richmond Fed manufacturing index are on the agenda .
The dollar is up 0.2% against the euro to 0.9202 and flat against the pound at GBP 0.7844.
The ounce of gold is almost unchanged at USD 1896.Oil loses ground again, with North Sea Brent at USD 84.24 a barrel and US light crude WTI at USD 79.92.The yield on 10-year US debt has risen to 4.34%.Bitcoin is trading at around 26,020 dollars.
In corporate news:
U.S.video game publisher Activision Blizzard will sell Ubisoft Entertainment the streaming rights to its games in a bid to secure British regulator approval for Microsoft’s proposed takeover, the computer giant announced on Tuesday.Activision shares gained more than 1% in pre-market trading, while Microsoft shares advanced by 0.5%.Tesla gained 2.8% in premarket trading after climbing 7.3% on Monday.
Meta Platforms , parent company of Facebook, asked the Norwegian courts on Tuesday to suspend the daily fine imposed by the country’s data regulator for violating user privacy.Boeing has signed an agreement with Indonesia for the sale of 24 F-15EX fighter jets.The amount of the transaction was not disclosed.Charles Schwab – The US brokerage firm said on Monday that it planned to reduce its workforce in response to cost pressures, without specifying the extent of the measure.
The share price was down 0.5% in pre-market trading.Zoom reported a third-quarter profit forecast higher than Wall Street estimates on Monday evening.The video-conferencing platform’s shares gained 3.9% in premarket trading.Baidu – Shares in the New York-listed Chinese group gained 2.5% in premarket trading following the publication of better-than-expected quarterly results.Coinbase was up 3% in pre-market trading after announcing on Monday that it was acquiring a stake in crypto-currency operator Circle Internet Financial.Analyst recommendations:
Applovin : Jefferies analyst Andrew Uerkwitz raised the recommendation on AppLovin Corp.Class A to buy from hold.PT set to $50, implies a 28% increase from last price.
Aviva plc (av/ ln): AlphaValue/Baader Europe maintains its buy recommendation and raises its target price from GBp 547 to GBp 475.Axon : Morgan Stanley initiated coverage of Axon Enterprise Inc.with a recommendation of equal-weight.PT set to $230, implies a 17% increase from last price.Bae systems : Shore Capital maintains its buy recommendation with a price target reduced from 1205 to 1131 GBp.
Celldex : Wells Fargo Securities initiated coverage with a recommendation of underweight.PT down 31% to $21.Cognizant : J.P.
Morgan upgrades to neutral from underweight.PT up 12% to $77.Edison International : Mizuho Securities Co Ltd upgrades to buy from neutral.PT up 8.7% to $75.
Emerson Electric : J.P.Morgan upgrades to overweight from neutral.PT up 13% to $107.Evercore : Goldman Sachs downgrades to neutral from buy.
PT up 5% to $140.Hays plc (has ln): BNP Paribas Exane upgrades from neutral to outperform, with price target raised from 120 to 125 GBp.Jefferies : Goldman Sachs upgrades to buy from neutral.PT up 17% to $40.
Pinnacle West : Mizuho Securities upgrades to buy from neutral.PT up 9.4% to $85.Rhi magnesita : Kepler Cheuvreux maintains its buy recommendation on the stock, with a price target raised from 3,000 to 3,500 GBp.Rs group plc (rs1 ln): BNP Paribas Exane upgrades from Neutral to Outperform with a price target reduced from GBp 1000 to GBp 965.Target : Daiwa Securities downgrades to neutral from outperform.PT up 4.9% to $134.
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