The S&P 500 futures are down by 3 points, Nasdaq 100 futures are down by 39 points, and Dow Jones Industrial Average futures are up by 10 points.
Stock futures are trading flat early today. Investors are focused on the labor market, awaiting the weekly jobless claims report and the revised Q2 productivity and unit labor costs numbers at 8:30 ET.
Before that, the August ADP Employment Change estimate will be released at 8:15 ET. Later, at 10:00 ET, the August ISM Services Index will be closely watched.
The 10-year note yield is at 3.77%, unchanged from yesterday, while the 2-year yield is up by one basis point to 3.78%.
In other news:
Today's News
Verizon Communications (VZ, Financial) announced a deal to acquire Frontier Communications (FYBR, Financial) in an all-cash transaction valued at $20 billion. This strategic acquisition will significantly expand Verizon's fiber footprint across the U.S., enhancing its broadband and mobility services. The deal, expected to close in approximately 18 months, is subject to approval by Frontier shareholders and is anticipated to be accretive to Verizon's revenue and Adjusted EBITDA growth rates.
The Chief Executive Officer of Scientech, a key supplier to Taiwan Semiconductor (TSM, Financial), highlighted the burgeoning demand for artificial intelligence chips, which is expected to spur growth in the semiconductor industry. Scientech, which supplies equipment for Taiwan Semiconductor's chip-on-wafer-on-substrate packaging, has seen equipment sales increase two to three times in a year. This surge is driven by companies like Nvidia (NVDA, Financial) and AMD (AMD, Financial), which are heavily reliant on AI chips.
BMW (BMWYY, Financial) announced a collaboration with Toyota Motor (TM, Financial) to advance hydrogen fuel cell technology. Both companies aim to bring a new generation of fuel cell powertrain technology to the market, with BMW planning to launch its first-ever fuel cell series production vehicle in 2028. This partnership is expected to create synergies for both commercial and passenger vehicles.
Stellantis (STLA, Financial) has temporarily halted production of its top-selling Jeep Wrangler and Grand Cherokee models due to high inventory levels and declining sales. The production adjustments are taking place at two Detroit assembly plants and a factory in Toledo, Ohio. Analysts have attributed the high inventory levels to higher prices and fewer promotions compared to rivals.
Mobileye (MBLY, Financial) saw its stock fall after Wolfe Research downgraded the company, citing limited opportunities for its Supervision system and poor management messaging on full autonomy. This downgrade comes as investors increasingly view Mobileye as a market share loser in the advanced driver-assistance system space, especially with competitors like Tesla (TSLA, Financial) and Nio (NIO, Financial) exploring their own AI architectures.
Tesla (TSLA, Financial) unveiled plans to launch its Full Self-Driving (FSD) technology in China and Europe by the first quarter of 2025, pending regulatory approval. The company plans to offer FSD as a monthly subscription service, which could provide a new revenue stream amid increasing competition. This timeline represents a slight delay from earlier expectations for a 2024 rollout.
The Committee on Foreign Investment in the United States (CFIUS) has deemed Nippon Steel's (NPSCY) proposed $14 billion acquisition of US Steel (X, Financial) a national security risk. The committee expressed concerns that the deal would hurt American steel production and reduce the likelihood of US Steel seeking trade remedies. Both companies have responded, arguing that the U.S. is not acting in its national security interests.
ASML (ASML) and Arm Holdings (ARM) were in focus after Morgan Stanley replaced ASML with Arm as its top pick in the European semiconductor space. ASML shares fell while Arm shares rose slightly. Analysts cited concerns over ASML's future growth and the impact of R&D and capex cuts at key customer Intel.
Verizon (VZ, Financial) declared a $0.6775 per share quarterly dividend, marking a 1.9% increase from the prior dividend. The dividend is payable on November 1 to shareholders of record on October 10. This marks the first increase after paying a quarterly dividend of $0.6650 for the previous four quarters.
PagSeguro Digital (PAGS) and StoneCo (STNE) stocks dropped after Morgan Stanley downgraded both to Underweight. Analyst Jorge Kuri expects 2024 to mark peak growth and profitability for the Brazilian payments sector, citing market saturation and slower total payment volume growth. EPS estimates for both companies were slashed by as much as 45%-55% for 2023.
Verizon (VZ, Financial) also announced a strategic partnership with Skylo to launch a satellite messaging service, aiming to enhance its connectivity solutions. This move aligns with Verizon's broader strategy to diversify its service offerings and expand its market presence.
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