Pre-Bell｜U.S. Futures Rise; AMC tumbles 35%, APE Soars 25%; Tesla Drops Over 2%
U.S. stock index futures edged higher on Monday as most megacap growth stocks steadied after a selloff in the previous session, while investors awaited quarterly reports from U.S. retail giants and economic data later in the week.
Market Snapshot
At 7:45 a.m. ET, Dow e-minis were up 36 points, or 0.1%, S&P 500 e-minis were up 5 points, or 0.11%, and Nasdaq 100 e-minis were up 27 points, or 0.18%.
Pre-Market Movers
AMC Entertainment (AMC, APE) - AMC Entertainment shares fell 34.8% in premarket trading after the movie-theater chain won approval to move ahead with a planned conversion of AMC Preferred Equity, or APE, units into common shares. APE units soared 27.5%. AMC has sought to convert its preferred equity units, known as Apes, into common shares and enact a 10-for-1 reverse stock split to raise capital.
Tesla (TSLA) - Tesla was falling 2.3% after cutting prices in China on two versions of its Model Y sedan. The price of a long-range Model Y was cut by 14,000 yuan, to 299,900 yuan, and the performance version also was reduced by 14,000 yuanto 349,900 yuan. Tesla also rolled out an incentive of 8,000 yuan, or about $1,100, for certain Model 3 sedans in China. The price cuts will lead to more questions about price wars and demand for electric vehicles in the world’s largest market for new cars.
U.S. Steel (X) - U.S. Steel rejected an unsolicited buyout offer from rival Cleveland-Cliffs (CLF) that would have valued U.S. Steel at about $7.3 billion. The board of U.S. Steel called the proposal “unreasonable.” Cleveland-Cliffs said the implied value of the offer was $35 a share. U.S. Steel closed Friday at $22.72 and was surging in premarket trading by 27% to $28.82.
Nikola (NKLA) - Nikola was falling 14.9% after announcing it would be recalling about 209 of its Class 8 Tre battery-electric vehicles after a third-party investigator found that a defective battery part likely caused a fire in one of the trucks at the company’s headquarters in Phoenix.
Okta (OKTA) - Okta was rising 4.5% to $74.61 after shares of the identity-management software provider were upgraded to Buy from Sell at Goldman Sachs and the price target was raised to $91 from $77.
Philips (PHG) - Shares of Philips were up 3.9% after it was announced that Dutch investment firm Exor N.V. bought a 15% stake in the health technology group.
Keysight Technologies (KEYS) - Keysight Technologies was downgraded to Underperform from Neutral at BofA with a price target of $148, down from $163. Keysight, a maker of electronics test and measurement equipment, is scheduled to issue fiscal third-quarter earnings on Thursday. The stock fell 3% to $151.90.
Monday.com (MNDY) - Monday.com rose 5.9% after second-quarter earnings topped analysts’ estimates and the communications software company raised revenue guidance.
Market News
Tesla Cuts Prices in China for Some Model Y Versions
Tesla Inc has cut prices in China for its Model Y long-range and performance versions starting on Aug. 14, the company said in a notice on Monday.
The car company dropped the starting prices of both models by 14,000 yuan ($1,934.58). The Model Y Long Range's starting price drops 4.5% to 299,900 yuan and the starting price of the Model Y Performance is now 349,900 yuan, down 3.8%.
In the same announcement, Tesla also said it would offer insurance subsidies in China of 8,000 yuan for Model 3 buyers of entry-level, rear-wheel-drive versions of the Model 3 inventory vehicle between Aug. 14 and Sept. 30.
Goldman Pencils In First Fed Rate Cut for Second Quarter of 2024
Goldman Sachs Group Inc. economists anticipate the Federal Reserve will start lowering interest rates by the end of next June, with a gradual, quarterly pace of reductions from that point.
“The cuts in our forecast are driven by this desire to normalize the funds rate from a restrictive level once inflation is closer to target,” Goldman economists including Jan Hatzius and David Mericle wrote in a note dated Sunday.
For now, the Goldman team is penciling in rate cuts to begin in the second quarter of 2024. The rate-setting Federal Open Market Committee is expected to skip a hike next month, and conclude at the November meeting “that the core inflation trend has slowed enough to make a final hike unnecessary.”
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