HomeBusinessStock market today: US...

Stock market today: US futures drift lower as faith in rate cuts fades


US stock futures pointed to more losses on Wednesday, as investors looked to a coming speech by Federal Reserve Chair Jerome Powell for clues to whether interest rates will stay higher for longer.

S&P 500 (^GSPC) futures slipped 0.2%, while Dow Jones Industrial Average (^DJI) futures held just below the flatline. Contracts on the tech-heavy Nasdaq 100 (^NDX) led declines, down almost 0.4%, after the major gauges closed in a sea of red.

Stocks have drifted away from their strong start to the year as robust economic data undermined hopes for three Fed rate cuts. Investors have scaled back their bets to the point where they expect a smaller, later easing than policymakers have projected.

The focus is now on Powell, whose speech on the economic outlook later Wednesday will be weighed for clues to whether the Fed’s June meeting will bring a policy pivot. Appearances by Michael Barr and other Fed officials will also be watched.

Eyes are also on who will win the bitter proxy battle between Disney and activist investor Nelson Peltz, with the results of a shareholder vote due later Wednesday. Signs are that Disney has secured enough backing to fend off the board shake-up put forward by Peltz’s Trian, sources told Reuters.

In single stock moves, Intel (INTC) shares fell around 5% in premarket trading after the chip company posted sharper operating losses at its foundry business.

Meanwhile, its rival TSMC (TSM) was forced to halt some chipmaking in the wake of a huge earthquake hit Taiwan, raising concerns about the supplier to Apple (AAPL) and Nvidia (NVDA). Its US-listed shares dipped slightly.

Live2 updates

  • Tesla gets put into the penalty box by JP Morgan

    No burying the lede here.

    JP Morgan analyst Ryan Brinkman has cut his price target on Tesla (TSLA) to $115 from $130 this morning, which assumes about 30% downside from current price levels (stock is already down 33% year to date). The revised price target stems from Brinkman “slashing” his estimates on Tesla after a lackluster deliveries report.

    Some numbers of interest from Brinkman’s report:

    • Sees first quarter EPS of $0.42, down from a prior estimate of $0.69. Current consensus is around $0.60.

    • Sees a “large” free cash outflow of $1.3 billion in the first quarter compared to a prior estimate for an inflow of $300 million. Brinkman blames this on Tesla having too much inventory after a disappointing quarter.

    Says Brinkman on Tesla’s stock:

    “While Tesla shares are -59% from their all-time high of $409.97 reached on November 4, 2021 (vs. the S&P 500 +11%), the stock still strikes us as highly expensive, with extraordinary work and tremendous accomplishment unlike the trend in recent quarters required in coming years to grow into even our $115 price target (which at $401 billion market capitalization we nervously note values Tesla as the world’s most valuable automaker, edging out Toyota’s $391 billion), let alone current valuation of $167 per share ($580 billion).

  • Intel opens its books further, and the stock gets hit

    Intel (INTC) shares are getting re-programmed pre-market.

    Shares are off by 4% as Intel fine-tuned how it reports financials to investors. This was an expected event, but the numbers around the foundry business (a key focus for CEO Pat Gelsinger, as he explained to me on Yahoo Finance Live two weeks ago) probably caught a lot on the Street by surprise.

    Intel said its chip manufacturing business had a $7 billion loss in 2023, larger than the $5.2 billion loss in 2022. Sales fell 31% year-on-year to $18.9 billion. Breakeven for the business is seen somewhere closer to 2030.

    The disclosures will likely restart talk on why Intel is building plants to manufacture chips for others, which is coming at a major cost.

    Stifel analyst Ruben Roy offered up the simplest to understand analysis on the stock following the disclosures:

    “We believe Intel has a difficult road ahead as the company begins a multi-year transition phase which involves high capital intensity and an ambitious design roadmap with expectations to move through five process node transitions in four years. As Intel executes to its plan, competitors such as AMD (AMD) and Nvidia (NVDA) continue to innovate on their respective technology road maps. Intel also faces increased competition from internally-sourced CPU technologies in both the client PC market and the data center market. With this as a backdrop, we see limited upside catalysts to shares in the medium term.”



Source link

Most Popular

LEAVE A REPLY

Please enter your comment!
Please enter your name here

More from Author

Read Now

Fever select Caitlin Clark with No. 1 pick in WNBA Draft

BROOKLYN, N.Y. — Eight days after completing one of the greatest collegiate basketball careers ever recorded, Caitlin Clark was selected with the No. 1 pick in Monday’s WNBA Draft by the Indiana Fever.Clark is poised to not only help the Fever return to the postseason for...

In 1998, Bollywood star killed two blackbucks. A gang still seeks revenge.

Khan has been in the crosshairs of an armed gang since 1998 for shooting two blackbucks on a recreational hunting trip.Two members of a notorious criminal gang have been arrested for firing at the home of Bollywood actor Salman Khan in apparent retaliation for the superstar’s...

14 More Games Land on PS Plus Extra, Premium Today

As always, we ran a Poll over the weekend to gather your thoughts on the line-up, and (almost) as always, one-third of you responded by saying "it's a crap selection". 26 per cent of voters were at least somewhat happy with the selection, with Dave the...

Where Biden’s billions in chipmaking money have gone — and what could be next

The White House announcement this week of up to $6.4 billion in chipmaking cash for Samsung (005930.KS) marks a move to the next phase of the Biden administration's effort to bring semiconductor manufacturing back to the US.The focus so far has largely been on leading-edge logic...

WNBA expansion headed for 16 teams. Portland, Toronto and Philly are options

NEW YORK — The WNBA is looking to continue growing in the next few years. The league intends to reach 16 teams by 2028, commissioner Cathy Engelbert said before the draft, confirming The Athletic report from earlier Monday.The league announced earlier this year that the Bay...

Microsoft Makes High-Stakes Play in Tech Cold War With Emirati A.I. Deal

Microsoft on Tuesday said it would make a $1.5 billion investment in G42, an artificial intelligence giant in the United Arab Emirates, in a deal largely orchestrated by the Biden administration to box out China as Washington and Beijing battle over who will exercise technological influence...

A hockey puck hurtled toward her son’s head. A fan jumped to block it.

Just over a minute was left on the clock during a hockey game in Cleveland Thursday when a player struck the puck, sending it barreling into the stands and toward Asia Davis’s 4-year-old son. That’s when another fan jumped and extended his right arm to block...

Thailand’s Finance Ministry to lead 17 agencies in considering House report on legalizing casinos

Thailand’s Ministry of Finance has been appointed lead agency to consider a House committee study recommending the legalization of casino gaming but will work with 16 other agencies in doing so, local media reports. According to English-language outlet The Nation, the appointment was ordered by way of...

WWE RAW Results Coverage, Reactions and Highlights for April 15, 2024

It’s Monday night, and you know what that means! WWE RAW will go down tonight, and Ringside News has got you covered with live play-by-play results coverage for the April 15, 2024 episode. The start time for WWE RAW is 8:00 PM EST. Match-by-match highlights...

Coachella Weekend 1 Recap, J Balvin’s Out Of This World Coachella Set, Metro Boomin & Future Top Hot 100 | Billboard News

It’s Monday April 15th, Billboard counts down the top 10 on the Hot 100, we’re running down all the headliners and special guest performers and some notable audience members that went down at the first weekend of Coachella, J Balvin gives us a behind the scene...