U.S. futures took a breather on Thursday after a sharp drop in equities the previous day, with investors wary about weak Treasury sales and the Federal Reserve’s outlook on interest rate cuts. Salesforce shares plummeted in after-hours trading after the company missed its second-quarter estimates. Meanwhile, activist investor Nelson Peltz decided to sell his stake in Disney following an unsuccessful proxy battle earlier this year.
Futures Slip
U.S. stock futures declined on Thursday, continuing the losses from the previous session as investors worried about rising Treasury yields and the timing of potential Fed rate cuts. By early morning, Dow futures were down significantly, S&P 500 futures also fell, and Nasdaq 100 futures dropped.
The main averages on Wall Street fell on Wednesday, driven by an increase in Treasury yields due to lackluster demand for new government debt. The benchmark 10-year Treasury yield reached a four-week high, continuing its upward trend from earlier in the week.
Concerns about persistent inflation and recent Fed comments have led some market watchers to lower their expectations for rate cuts this year. Instead of expecting two cuts, the CME FedWatch Tool now suggests just one might occur in late 2024.
This sentiment could shift further with the release of the monthly personal consumption expenditures price index, the Fed’s preferred inflation measure, later this week. Fed officials have indicated they need more proof of cooling inflation before reducing borrowing costs from their current high levels.
Salesforce’s After-Hours Slump
Salesforce shares tumbled in extended hours trading after the company’s second-quarter forecast missed analyst expectations. Weak client spending on business products and services impacted the outlook, despite CEO Marc Benioff’s optimistic comments about AI’s potential to enhance returns.
Salesforce predicted lower-than-expected adjusted earnings per share and revenue for the second quarter. The company also revised its annual subscription and support revenue growth forecast downward.
In other corporate news, HP Inc reported better-than-expected second-quarter sales, indicating a recovery in the personal computing market and boosting its shares in after-hours trading.
Peltz Sells Disney Stake
Activist investor Nelson Peltz sold his entire stake in Walt Disney Company, according to a CNBC report. Peltz sold his shares at a significant price, bringing in about a billion dollars. Disney’s stock, meanwhile, has risen over the year.
This sale comes after Peltz’s investment firm, Trian Partners, lost a proxy battle in April where Disney shareholders re-elected the full board, blocking Peltz’s attempt to secure board seats. Peltz had been critical of Disney’s governance, particularly its streaming strategy and succession plans for CEO Bob Iger.
UBS Leadership Changes
Swiss bank UBS has revamped its executive board, splitting the wealth management responsibilities between two managers seen as potential successors to CEO Sergio Ermotti. Wealth management chief Iqbal Khan will lead UBS’s Asia-Pacific business, while investment bank head Rob Karofsky will oversee the Americas division.
As UBS integrates Credit Suisse following last year’s government-brokered merger, the bank is also seeking an internal candidate to replace Ermotti, who plans to retire in 2027. The reshuffle includes the departure of Credit Suisse CEO Ulrich Körner and the retirement of UBS Americas head Naureen Hassan.
Crude Prices Dip
Crude prices edged lower on Thursday as concerns over high borrowing costs overshadowed a larger-than-expected drop in U.S. oil inventories. Early in the morning, U.S. crude futures and Brent crude both traded lower.
The American Petroleum Institute reported a substantial draw in U.S. oil inventories last week, significantly more than anticipated. This suggests rising fuel demand with the onset of the summer travel season, often starting with the Memorial Day weekend.
The U.S. government is on the brink of sealing a deal to bankroll a late-stage trial of Moderna’s (NASDAQ) mRNA bird flu vaccine, the Financial Times reported Thursday. As H5N1 swoops through egg farms and cattle herds, investors are scrambling, sending Moderna’s shares up nearly 6% to $156.62 in premarket trading.
This potential windfall from the Biomedical Advanced Research and Development Authority (BARDA) could land as soon as next month, promising to buy doses if the late-stage trials hit the mark, insiders say.
Neither Moderna nor the U.S. Department of Health and Human Services (HHS) rushed to comment when Reuters came knocking.
Meanwhile, the U.S., Canada, and Europe are in a huddle with CSL Seqirus (OTC) and GSK, strategizing to snag or produce H5N1 bird flu vaccines. The aim? To safeguard poultry and dairy workers, veterinarians, and lab techs from the avian menace.
U.S. Nears Deal to Fund Moderna’s Bird Flu Vaccine Amid H5N1 Outbreak
The U.S. already has a stash of bird flu vaccines that match the current strain, along with antivirals ready to tackle human infections. But if the bird flu takes flight into a major epidemic or pandemic, a substantial scale-up will be on the agenda.
Officials noted they’re converting bulk vaccine from CSL into finished doses, potentially yielding 4.8 million shots. Plus, they’re in “active conversations” with mRNA maestros Pfizer (NYSE) and Moderna about a possible human vaccine.
Just last week, U.S. officials confirmed the nation’s second human case of bird flu since the virus made its mooooove into dairy cattle in late March. The growing spread to mammals, including the first outbreaks in U.S. dairy cows, has stoked fears about the virus jumping to humans via the milk supply.
Investing on a Thursday is like attending a mid-week soirée—you’re not quite at the weekend bash, but the excitement is definitely brewing. The market’s mood swings can make for a thrilling ride, as traders dance between cautious optimism and frantic speculation. Throw in some unexpected news—like a government deal or a corporate shake-up—and you’ve got a recipe for a financial fiesta. Just remember to keep your wits about you; Thursday’s moves can set the stage for Friday’s grand finale or a surprising twist before the weekend curtain call.