Stock futures edge higher with inflation data in sight; Tesla nudges higher despite China sales slump; Boeing moves higher on 787 Dreamliner delivery report; Novavax plummets after slashing vaccine sales forecasts and Take-Two Interactive slides on muted video gaming outlook
Here are five things you must know for Tuesday, August 9
1. — Stock Futures Edge Higher With Inflation Data In Sight
U.S. equity futures edged higher Tuesday, while the dollar slipped modestly lower against its global peers and oil prices retreated, as investors adopted a cautious stance on risk ahead of a key inflation reading later in the week.
Quiet August trading volumes are also keeping traders in check Tuesday as the earnings season draws to a close and markets remain laser-focused on Wednesday’s July inflation reading, which is expected to indicate a pullback in headline CPI from its 41-year peak of 9.1% and possibly being a series of readings that could provide the Federal Reserve with enough data to conclude that its interest rate hikes are finally having an effect.
Some, however, are worried that Friday’s blowout jobs number, which included 528,000 new hires alongside wage growth of 5.2%, will continue to power inflation readings over the months ahead.
That has bets on another jumbo Fed rate hike in September holding at around 63%, according to the CME Group’s FedWatch, with smaller hikes penciled in for November and December.
Still, others note that the U.S. Treasury curve remains steeply inverted — a condition that has preceded nearly every recession for the past 25 years — as growth remains elusive both at home and in major economies around that world.
That concern was amplified by news of fresh lockdowns in China Tuesday as Beijing continues to implement a ‘zero Covid’ policy that has threatened to turn the world’s second-largest economy into recession.
The new restrictions, centered around the tourist island of Hainan, added downward pressure to commodity prices overnight and followed data earlier in the week that indicated the weakest July crude import totals in at least for years.
WTI crude futures for September delivery were marked $1.31 lower at $89.45 per barrel while Brent contracts for October, the global benchmark, fell $1.26 to $95.39 per barrel.
The U.S. dollar index, which tracks the greenback against a basket of six global currency peers, was marked 0.3% lower at 106.101 while benchmark 10-year Treasury notes yields were stable at 2.75%
In overseas markets, European stocks drifted south, with the Stoxx 600 falling 0.25% in early Frankfurt trading, while overnight in Asia the region-wide MCSI ex-Japan index fell 0.06%.
On Wall Street, futures tied to the S&P 500 are indicating a modest 6 point opening bell gain while those liked to the Dow Jones Industrial Average are priced for a 60 point bump. Futures linked to the tech-focused Nasdaq are indicating a 5 point advance.
2. — Tesla Nudges Higher Despite China Sales Slump
Tesla (TSLA) – Get Tesla Inc. Report shares edged higher in pre-market trading following data from China indicating a steep decline in July sales and exports amid planned maintenance breaks at its Shanghai gigafactory.
Tesla sold 28,217 China-made cars last month, the China Passenger Car Association (CPCA) said Tuesday, with around 19,756 of the units exported to other markets.
The figures represent a sharp decline when compared to the 78,000 units sold in June, although the decline was linked to production suspensions in Shanghai that kept the plant idle for much of the month as it re-tools various systems to allow for weekly unit expansion over the coming months.
Tesla shares were marked 1.12% higher in pre-market trading to indicate an opening bell price of $881.00 each.
3. — Boeing Moves Higher on 787 Dreamliner Delivery Report
Boeing (BA) – Get The Boeing Company Report shares edged higher in pre-market trading following a report that suggested the planemaker has received clearance for its first 787 Dreamliner delivery in more than a year.
Reuters reported late Monday that the Federal Aviation Administration, which had hinted that Boeing could begin 787 deliveries in the coming days, has given the final nod, with American Airlines (AAL) – Get American Airlines Group Inc. Report set to take possession of the flagship widebody on Wednesday. Boeing has another 119 787s — including 42 for American Airlines — on back order.
Last month, Boeing said it was working with the FAA on the ‘final actions’ needed to resume 787 deliveries following a move earlier this spring to re-locate its corporate headquarters to the suburbs of Washington, D.C.
Boeing shares were marked 1.1% higher in pre-market trading to indicate an opening bell price of $167.65 each.
4. — Novavax Plummets After Slashing Vaccine Sales Forecasts
Novavax (NVAX) – Get Novavax Inc. Report shares plunged lower in pre-market trading after the drugmaker slashed its full-year revenue forecast and warned that it does not expect to sell any more of its Covid vaccines in the United States this year.
The Gaithersburg, Maryland-based drugmaker also posted a wider-than-expected third quarte loss of $6.53 per share for the three months ending in June, with revenues slowing to just $185.9 million.
Novavax halved its 2022 sales forecast to between $2 billion and $2.3 billion, citing the late entry of its Covid vaccine to a glutted domestic market, adding it doesn’t expect a new order this year from the World Health Organization-backed COVAX facility, as government buyers work through supply purchased earlier in the year.
With over 23 million doses delivered since the start of the third quarter, we are distributing our vaccine globally and have gained positive momentum as we move into the remainder of 2022 and into 2023,” said CEO Stanley Erck. “Through continued expansions to our label for adolescents and boosting and our vaccine’s competitive product profile, we are confident it will play an important role in the long-term COVID-19 landscape.”
Novavax shares were marked 29.3% lower in pre-market trading to indicate an opening bell price of $40.50 each.
5. — Take-Two Interactive Slides On Muted Video Gaming Outlook
Take-Two Interactive (TTWO) – Get Take-Two Interactive Software Inc. Report shares moved lower in pre-market trading after the ‘Grand Theft Auto’ maker posted softer-than-expected first quarter sales and clipped its full-year revenue forecast amid emerging weakness in the video game sector.
Take-Two said adjusted sales for the three months ending in June, its fiscal first quarter, rose 41% from last year to $1 billion, just shy of Street forecasts, and said full-year revenues would likely come in between $5.8 billion and $5.9 billion, citing a pullback in consumer discretionary spending.
The outlook followed a Monday-morning warning from gaming chipmaker Nvidia (NVDA) – Get NVIDIA Corporation Report as well as disappointing June quarter updates from rivals Activision Blizzard (ATVI) – Get Activision Blizzard Inc Report and Electronic Arts (EA) – Get Electronic Arts Inc. Report.
Take-Two shares were marked 2.8% lower in pre-market trading to indicate an opening bell price of $122.00 each.