Today’s headlines are buzzing with the announcement of Oracle’s Surge and Apple’s iPhone 17 Air. We’ve also got US-India trade discussions and the appointment of a new French prime minister on our radar. Meanwhile, news from Poland regarding Russian drones, Novo Nordisk developments, and efforts to oust federal government Governor Lisa Cook have taken a backseat.
Yesterday saw stocks continuing their upward trend, with the S&P 500 rising by 0.3% to hit 6,513 points. This rally is occurring amid a quieter news cycle, as investors are eyeing a potential Fed rate cut next week. A notable drop in US job creation estimates has only fueled those expectations, shifting the focus now to producer prices and tomorrow’s CPI release.
In the corporate world, Oracle made headlines by exceeding expectations in its quarterly report. Shares surged by 28% after hours, potentially boosting its market valuation from $680 billion to around $860 billion—trumping companies like Walmart and JPMorgan in the process. This surge is thanks to a staggering 360% increase in order books, amounting to a $455 billion backlog driven by rising demand for cloud server rentals connected to AI. Once viewed as a legacy software firm, Oracle is now striking all the right notes in terms of hyper-growth.
Apple, on the other hand, showcased its annual product line-up, sparking interest with the iPhone 17 Air—a sleeker, improved version of its predecessor. However, analysts are suggesting that Apple is still lagging in the AI race, and as a result, investor reactions have been tepid. The stocks dipped by 1.5% following the launch.
On the international stage, Donald Trump and India’s Narendra Modi have decided to engage in talks to ease the ongoing trade tensions; currently, the US has a 50% tariff on many Indian imports. Over in Europe, Poland has briefly shut down the Warsaw airport to intercept Russian drones breaching its airspace as part of ongoing strikes in Ukraine. Meanwhile, Washington has taken a critical stance against Israel for targeting representatives of Hamas linked to Qatar, an ally of the US.
In political developments, French President Emmanuel Macron has appointed Sebastian Lecorne as the new prime minister after the previous government collapsed.
Today’s key event includes the US producer price index scheduled for 8:30 am ET, along with the official inauguration of Lecorne in Paris.
In the Asia-Pacific region, markets are looking positive. Japan’s Nikkei 225 has risen by 0.8%, India’s index increased by 0.5%, and Australia’s ASX is up by 0.4%. Hong Kong is doing even better at +1%, with Taiwan rising by 1.4% and Korea’s Kospi climbing 2%, spurred by Oracle news and some local stock market reforms.
Today’s economic highlights:
We will kick off the day with inflation numbers from Switzerland before turning our attention to the US producer price index, followed by updates on wholesale and crude oil stocks from the DOE.
- Dollar Index: 97.73
- Gold: $3,646
- Crude Oil (Brent): $67.09 (WTI): $63.33
- 10-Year US Treasuries: 4.052%
- Bitcoin: $113,500
Corporate News:
- Advanced Micro Devices is expected to rise 3.5% in pre-market following Oracle’s upbeat outlook.
- Apple is likely to see a further drop of 0.45% in pre-market trading after a 1.48% decrease during its product launch. Price adjustments on the iPhone remain modest despite tariffs, and analysts note Apple’s quiet stance on AI.
- ARM Holdings has introduced a new line of chips called Lumex, designed for AI use on mobile devices without internet access.
- Block, led by Twitter co-founder Jack Dorsey, won a court case dismissing a lawsuit over data security concerns from 2021.
- Broadcom gained 2.2% in pre-market trading, benefiting from Oracle’s momentum.
- Constellation Energy climbed 1.4% ahead of the market as energy suppliers to data centers follow the upward trend.
- Exxon Mobil anticipates that the EU will ink a long-term deal for US natural gas, as there are plans to purchase $750 billion worth of US energy by 2028.
- GameStop shares jumped 8.3% in pre-market trading following a nearly 22% rise in second-quarter revenues as restructuring efforts pay off.
- Ge Vernova is seeing a 2.5% increase due to demand from data centers.
- Meta and TikTok have achieved a legal win against the EU’s Digital Services Act following a ruling that found the fee calculation methods inadequate.
- Nike is projected to rise 1.4% ahead of the market after an upgrade from TD Cowen.
- Nvidia is up 1.9% in pre-market, buoyed by Oracle results.
- Oracle’s stock skyrocketed 31% in pre-market, forecasting a 77% annual growth for its cloud infrastructure sector, surpassing its previous guidance.
- Synopsys saw a significant dip with more than a 20% drop after reporting quarterly revenue below analyst forecasts.
- Vistra continues to climb alongside energy providers for data centers, gaining 2.8% in the market.
Analyst Recommendations:
- Affirm Holdings: Autonomous Research maintains an outperform rating, raising the target price from USD 78 to USD 102.
- Consent Real Estate: Mizuho Securities keeps a neutral stance, lowering the price target from USD 78 to USD 77.
- American Electric Power: Ladenburg Thalmann holds a neutral rating with a decreased target from USD 112 to USD 108.50.
- Apple: Rosenblatt Securities maintains a neutral rating and raises the target price from USD 223 to USD 241.
- Casey’s General Stores: Stephens keeps an overweight rating and increases the target price from USD 530 to USD 570.
- Core & Main: Northcoast Research maintains a buy rating but lowers the target price from USD 62 to USD 60.
- Darden Restaurants: Deutsche Bank maintains a buy rating, reducing the target price from USD 243 to USD 239.
- Diamondback Energy: Gerdes Energy Research holds a buy rating and raises the price target from USD 202 to USD 208.
- Game and Leisure Real Estate: Mizuho Securities maintains a neutral rating, increasing the target price from USD 48 to USD 50.
- General Motors: Nomura maintains a reduce rating, increasing the target price from USD 41 to USD 50.
- HP: Evercore ISI lowers its rating from outperform with a target of USD 29.
- Oracle: Citi upgrades from Neutral to Buy, with a price target increase from USD 240 to USD 410.
- Pinnacle West Capital: Ladenburg Thalmann keeps a neutral rating, lowering the price target from USD 89 to USD 88.
- Realty Income: Mizuho Securities maintains a neutral rating and increases the target price from USD 60 to USD 63.
- Revvity: Baptista Research maintains a buy rating with a price target of 111.40.
- Robinhood Markets: Mizuho Securities maintains an outperform rating, raising the price target from USD 120 to USD 145.
- Rubrik: Rosenblatt Securities maintains a buy rating, increasing the target price from USD 110 to USD 115.
- Synopsys: Rosenblatt Securities downgrades from buy to neutral, lowering the price target from USD 650 to USD 605.
- Talen Energy: Seaport Global maintains a buy rating with an increased price target from USD 411 to USD 424.
- United Therapeutics: Cantor Fitzgerald maintains an overweight rating, raising the target price from USD 405 to USD 525.
- Vici Properties: Mizuho Securities maintains an outperform rating and raises the target price from USD 34 to USD 35.
