S&P 500 futures rose 5 points (0.1%), Nasdaq 100 futures rose 18 points (0.1%) and Dow Jones Industrial Average futures fell 8 points (smaller). Contracts tracking these indexes are roughly flat after a big rally in the stock market. The S&P 500 was 1.1% below its all-time high at yesterday’s close after falling nearly 10% earlier this month.
Investors are being cautious ahead of Wednesday’s benchmark nonfarm payrolls report and the minutes of the July 30-31 FOMC meeting. Another key event is Fed Chairman Powell’s speech at the Jackson Hole Economic Symposium on Friday.
The 10-year note yield remained at 3.87%, while the two-year note yield fell to 4.05%.
Today’s News
Elon Musk’s $44 billion acquisition of Twitter has become a financial disaster for the banks involved, making it the worst merger financing deal since the 2008-09 financial crisis. Banks including Bank of America (BAC) and Morgan Stanley (MS) loaned Musk $13 billion for the acquisition. Typically, banks would sell such loans quickly, but Twitter, now renamed X, has fallen into such poor financial health that the banks can’t sell the debt without taking a big loss. The debt has been in “limb” for the longest time of any similar unsold deal since the financial crisis, according to Pitchbook LCD Data.
Palo Alto Networks (PANW, Finance) shares rose about 2% in premarket trading after its fourth-quarter earnings and fiscal 2025 outlook received a positive response from analysts. KeyBanc Capital Markets maintained an overweight rating on the stock and raised its price target to $400 from $380. The company reported fourth-quarter sales were 1% ahead of expectations and billings were 2% ahead, and management expects growth of 19% to 20% in both the first quarter and fiscal 2025.
A high-profile fire involving a Mercedes-Benz Group (MBGAF, Financial) EV has caused an “EV scare” in the EV industry in South Korea. The fire, which broke out in an underground parking lot, damaged over 100 vehicles and caused minor injuries to residents. Mercedes-Benz has announced that it will pay 4.5 billion won ($3.4 million) in compensation and is considering ceasing sales of the affected models. The incident has led to panic selling of EVs in the region.
Johnson & Johnson (JNJ, Financial) has agreed to acquire medical device company V-Wave for $600 million upfront, with additional payments potentially up to approximately $1.1 billion. V-Wave focuses on treating cardiovascular disease, and its Ventura atrial shunt device has received FDA breakthrough device designation. The acquisition is expected to close by the end of 2024 and will be accounted for as an asset purchase.
Eli Lilly’s (LLY, Financial) tirzepatide (sold as Mounjaro and Zepbound) significantly reduced the risk of developing type 2 diabetes by 94% in adults who were prediabetic and obese or overweight, according to the SURMOUNT-1 study. The study enrolled 1,032 adults over three years, and tirzepatide also led to sustained weight loss. Adults who received the highest dose experienced an average weight loss of 22.9%, compared with 2.1% in those who received a placebo.
PayPal Holdings (PYPL, Finance) has expanded its partnership with Adyen (ADYEY, Finance) to introduce Fastlane by PayPal, a faster checkout solution for Adyen’s U.S. business and marketplace customers. Fastlane allows customers to store card and shipping information for faster checkout. The companies plan to roll out the service globally. PayPal CEO Alex Chriss aims to make technology improvements and customer data central to the company’s growth strategy.
The European Commission has approved a 5 billion euro ($5.5 billion) grant from the German government to help the European Semiconductor Manufacturing Company (ESMC) in Dresden build and operate a new microchip manufacturing plant. ESMC is a joint venture involving Taiwan Semiconductor Manufacturing Co. (TSM, finance), Robert Bosch, NXP Semiconductors (NXPI, finance) and Infineon Technologies AG. The project is aimed at meeting demand for automotive and industrial applications and is the first of its kind in Europe.
Lowe’s Companies (LOW, Financial) shares fell slightly in premarket trading after the company reported mixed second-quarter earnings and lowered its full-year outlook. Same-store sales fell 5.1%, below expectations of a 4.4% decline. The company cited continued pressure on high-DIY discretionary spending and poor weather as factors. CEO Marvin Ellison highlighted the company’s strong performance despite a challenging macroeconomic environment.