U.S. stock futures fell on Tuesday as investors cautiously weighed the odds of a rate cut ahead of crucial jobs data and looked at what the increased chances of a Donald Trump victory could mean for markets.
Futures on the Dow Jones Industrial Average (YM=F) and S&P 500 (ES=F) fell about 0.4%, after the gauges posted small closing gains to start the third quarter. Contracts on the tech-heavy Nasdaq 100 (NQ=F) led the way lower, down about 0.6%.
Stocks are reeling as the market plays it safe in a trading week dominated by Friday’s crucial June jobs report and shortened by the July 4 holiday. Doubts are emerging about whether stocks can extend their first-half rally into the end of the year, leaving investors on the lookout for signs of economic strength that could undermine momentum.
Jerome Powell will speak at an ECB meeting on Tuesday, and investors will be listening closely to the Fed chairman’s view on progress on inflation and the state of the labor market. There will also be the release of weekly job openings, which will also fuel expectations of interest rate cuts.
Meanwhile, political risk is looming as Wall Street weighs what a Trump election victory could mean for markets, while speculation mounts over Biden’s future as the Democratic Party’s standard-bearer. The 10-year Treasury yield (^TNX) edged lower on Tuesday after rising the day before amid that debate.
On the corporate front, Tesla (TSLA) shipments of China-made electric vehicles fell 24% in June amid a fierce price war. Its shares fell more than 1% in premarket trading after a 6% gain at the close, as the market awaited data on the automaker’s second-quarter production and deliveries.
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Roaring Kitty’s likely investment thesis on Chewy…
Let’s talk about a very timely note from EvercoreISI technology analyst Mark Mahaney.
Mahaney goes into great detail about the investment thesis on Chewy (CHWY) the day after Keith “Roaring Kitty” Gill revealed a 6.6% stake in the company. He also shared a helpful survey analysis below.
Mahaney says:
“We continue to view Chewy as a strong business that is impacted by broader industry weakness but still has many positives in terms of investment: steadily increasing Chewy spend and customer loyalty, nascent growth opportunities in sponsored ads, international expansion and vertical expansion (e.g., veterinary care clinics), and the potential for continued gross margin and EBITDA expansion.”
Mahaney maintains an in-line rating for now, citing competitive pressures, valuation and unproven momentum in Canada.
Chewy is one of the top destinations for pet products, according to a new survey from EvercoreISI. (Evercore ISI)
