view original
postUS stocks trod water before the bell on Thursday as Wall Street waited for fresh jobless data to help calculate interest-rate odds amid uncertainty about Federal Reserve unity on policy.
Futures on the Dow Jones Industrial Average (YM=F) and the S&P 500 (ES=F) both wobbled along the flat line. Meanwhile, contracts on the tech-heavy Nasdaq 100 (NQ=F) nudged down 0.1%, after the major gauges closed lower for a second day.
Markets are putting the brakes on stocks’ recent record-breaking rally amid debate over whether AI fervor is stretching valuations too much. At the same time, the uplift from the Federal Reserve’s switch to lowering rates is fading, as signs of division among policymakers dents hopes for another two cuts this year.
The spotlight is now on weekly jobless claims data due later, given Fed officials have highlighted concerns about slowdown in the labor market. Thursday’s docket also brings readings on US second quarter GDP, personal consumption, and existing home sales, among other economic data.
That sets the stage for Friday’s release of the Personal Consumption Expenditures index, the Fed’s preferred gauge of inflation. The PCE print for August is expected to show an easing in price pressures, which could make a case for a shift in rates policy.
In corporates, Costco (COST) is expected to report its quarterly results after the bell on Thursday. Investors expect to see a jump in sales as shoppers pursue deals amid economic uncertainty.
LIVE 3 updates
-
Premarket trending tickers: Intel, Hertz and Qualcomm
Here’s a look at some of the top stocks trending in premarket trading:
Intel (INTC) stock rose more than 3% in premarket trading on Thursday following news it had approached Apple (AAPL) about securing investment. Nvidia (NVDA) announced this month it will invest $5 billion in Intel.
Hertz (HTZ) shares jumped 4% before the bell after announcing it will raise capital by selling $250 million exchangeable senior notes.
Qualcomm (QCOM) stock fell 1% in premarket trading on Thursday. The group announced a series of new chips for PCs and phones the day prior.
-
Call of the morning: Redburn drops a sell on Oracle
As a former analyst, I love gutsy calls on stocks. My vibe was often to go against the grain where it made sense. Sometimes it worked, sometimes it didn’t — it was fun either way.
I have to give Redburn’s Alex Haissl a shout out this morning for dropping sell rating on one of the hottest stocks of the year, Oracle (ORCL). Haissl makes a compelling case to take profits in the name in a new 59 page report he shared with me.
Here’s his overall thesis:
“The market materially overestimates the value of Oracle’s contracted cloud revenues. Its role in single-tenant, large-scale deployments is closer to that of a financier than a cloud provider, with economics far removed from the model investors prize. Our analysis suggests Oracle’s five-year OCI revenue guide equates to roughly $60bn in value—meaning the market is already pricing in a risky blue-sky scenario that is unlikely to materialise. While the market currently fixates on headline figures, we expect attention to shift toward the underlying economics. Combined with subdued non-IaaS growth— which the market appears willing to overlook for now—this sets up meaningful downside risk.”
Haissl slapped Oracle with a $175 price target, assuming 42% downside from current levels.
-
China tech stocks rise with record win streak in view
Chinese tech stocks extended their rally on Thursday as investors stayed enthusiastic for the country’s AI developers.
Bloomberg reports:
Read more here.
