US stock futures fell on Tuesday as investors cautiously weighed the prospect of interest rate cuts ahead of key jobs data, and monitored how a higher chance of a Donald Trump victory might impact markets.
After posting modest gains early in the third quarter, Dow Jones Industrial Average futures (YM=F) and S&P 500 futures (ES=F) both fell about 0.4%. Contracts for the tech-heavy Nasdaq 100 (NQ=F) fell the most, down about 0.6%.
Stocks have been lower as markets play safe ahead of the crucial June jobs report on Friday and in a short trading week due to the July 4 holiday. Doubts are growing over whether stock markets will be able to sustain their first-half gains through the end of the year, leaving investors watching for signs of economic strength that could slow momentum.
Jerome Powell is scheduled to speak at the ECB meeting on Tuesday, and investors will listen carefully to the Federal Reserve chairman's views on progress on inflation and the labor market situation. Also on watch will be weekly job openings, which will fuel expectations of interest rate cuts.
Meanwhile, political risk is on people's minds as Wall Street assesses what effect a Trump election win could have on markets, as speculation grows that Biden will go into the future as the Democratic Party's standard-bearer. The 10-year Treasury yield (^TNX) edged lower on Tuesday after surging the previous day amid the debate.
On the corporate front, Tesla's (TSLA) China-made EV shipments dropped 24% in June amid a fierce price war. Its shares fell more than 1% in pre-market trading after a 6% gain as the carmaker awaited second-quarter production and delivery data.
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Roaring Kitty's potential investment thesis on Chewy…
Talk about a timely note from EvercoreISI technical analyst Mark Mahaney.
Mahaney thoroughly explained the investment thesis in Chewy (CHWY) just a day after Keith 'Roaring Kitty' Gill disclosed a 6.6% stake in the company. He also shared some useful survey analysis below.
Mahaney says:
“We view Chewy as a solid business that has been impacted by broader industry weakness but still has many investment positives – consistently increasing spend/loyalty per Chewy customer, emerging growth opportunities in sponsored ads, international expansion and vertical expansion (such as veterinary care clinics), and the potential for ongoing gross and EBITDA margin expansion.”
Mahaney has decided to stick with the in-line rating for now, citing competitive pressures, valuation and unproven progress in Canada.
According to a new survey from EvercoreISI, Chewy is the top choice for pet products. (EvercoreISI)
