U.S. stock futures fell on Tuesday as investors cautiously assessed the prospects for interest rate cuts ahead of crucial jobs data and awaited what the increased odds of a Donald Trump victory might mean for markets.
Futures on the Dow Jones Industrial Average (YM=F) and S&P 500 (ES=F) fell about 0.4%, after the indexes posted modest gains at the start of the third quarter. Futures on the technology-heavy Nasdaq 100 led the decline, falling about 0.6%.
Stocks are stumbling as the market plays it safe in a trading week dominated by Friday’s crucial June jobs report, which was cut short by the Fourth of July holiday. Doubts are growing about whether stocks can extend their first-half rally into the year-end, leaving investors on the lookout for signs of economic strength that could dent the momentum.
Jerome Powell is scheduled to speak at the European Central Bank meeting on Tuesday, and investors will be listening closely to the Fed chairman’s view on the progress of inflation and the state of the labor market. Investors will also be awaiting the weekly job openings, which will similarly help to bolster expectations for a rate cut.
Meanwhile, political risk is playing havoc with minds as Wall Street weighs what a Trump election win could mean for markets as speculation grows about Biden’s future as the Democratic Party’s standard-bearer. The 10-year Treasury yield (^TNX) fell on Tuesday after rising the previous day amid the debate.
On the institutional front, Tesla Inc.’s (TSLA) shipments of China-made electric vehicles fell 24% in June amid a fierce price war. Its shares fell more than 1% in premarket trading following a 6% closing gain as the market awaited data on the company’s second-quarter production and deliveries.
He lives1 update
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Roaring Kitty’s investment thesis at Chewy is likely…
Talk about a timely note from EvercoreISI technology analyst, Mark Mahaney.
Mahaney provides a good analysis of the Chewy (CHWY) investment thesis the day after Keith “Roaring Kitty” Gill revealed a 6.6% stake in the company. He also shares some useful poll analysis below.
Mahaney says:
“We continue to view Chewy as a strong company that is impacted by broader industry weakness, but still has many investment positives – consistently high spend/loyalty per Chewy customer, emerging growth opportunities in advertising, international expansion, vertical expansion (e.g. veterinary clinics), and continued growth potential in gross margin and EBITDA.”
Mahaney is sticking with the standards-compliant credit rating for now, citing competitive pressures, valuation and an unsubstantiated push into Canada.
Chewy is the top destination for pet products, according to a new survey by EvercoreISI. (Evercore ISI)
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