Here are five things you must know for Thursday, July 1:
1. — Stock Futures Waver as S&P 500 Closes Out Strong First Half
Stock futures wavered Thursday as Wall Street kicks off the third quarter looking toward the release of the U.S. jobs report for indications of the economy’s recovery.
Contracts linked to the Dow Jones Industrial Average rose 26 points and S&P 500 futures gained 2 points. Nasdaq futures fell 20 points.
The jobs report for June – the most closely watched economic indicator of any month – will be released Friday.
The S&P 500 on Wednesday rose for a fourth consecutive session and reached a record despite investors’ concerns about the growing spread of a highly infectious coronavirus strain.
The S&P 500 closed the second quarter with one of its best first-half showings in more than two decades. The broad-market index rose 8.2% in the second quarter and jumped 14.4% in the first half of the year.
The strong showing for equities has been led largely by assurances from the Federal Reserve that it will remain accommodative by keeping interest rates low for a while longer as the economy rebounds from the coronavirus pandemic.
But worries have been creeping in that the central bank could pull back its support and begin tapering stimulus sooner rather than later as the economy strengthens.
At its meeting in June, the Federal Reserve left interest rates unchanged but signaled it expected to boost interest rates two times by the end of 2023. But it also said it would continue to buy $120 billion of bonds monthly until “substantial further progress” had been made on employment and inflation.
2. — Thursday’s Economic Calendar: Jobless Claims and Walgreens Earnings
The economic calendar in the U.S. Thursday includes Jobless Claims at 8:30 a.m. ET, the PMI Manufacturing Final for June at 9:45 a.m., the ISM Manufacturing Index for June at 10 a.m. and Construction Spending for May at 10 a.m.
Earnings reports are expected Thursday from Walgreens Boots Alliance (WBA) – Get Report, McCormick (MKC) – Get Report, Acuity Brands (AYI) – Get Report and Simply Good Foods (SMPL) – Get Report.
3. — Ford Halts Production at Bronco Plant, Curtails Output at Others
Ford (F) – Get Report edged higher early Thursday after halting production at the Michigan factory that recently began building its Bronco SUV for a lack of parts and curtailing production at eight additional factories due to the global semiconductor shortage.
Ford said the Wayne, Mich., plant that produces the Bronco and Ranger pickup will be shut the weeks of July 5 and July 26.
Bloomberg first reported the news Wednesday afternoon.
Shares rose 0.13% to $14.88 in premarket trading. The stock closed down 1% on Wednesday.
Ford said it was diverting its scarce semiconductor
supply to finish nearly completed vehicles that are awaiting
chips before being sent to dealers, whose lots are emptying out.
“We’re prioritizing completing our customers’ vehicles that
were assembled without certain parts due to the industrywide
semiconductor shortage,” Ford said in an emailed statement to Bloomberg.
“This is in line with our commitment to get our customers their
vehicles as soon as possible.”
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4. — Didi Global Makes Less-Than-Spectacular Wall Street Debut
Didi Global (DIDI) – Get Report, the Chinese ride-hailing giant, was rising sharply in premarket trading Thursday following its less-than-spectacular Wall Street debut on Wednesday.
American depositary shares of Didi rose 9.36% to $15.31 each early Thursday. Didi opened trading Wednesday at $16.65 but closed with a gain Wednesday of just 1% to $14.14 per ADS, giving it a market value of about $68 billion.
Didi’s initial public offering was priced at $14. The company raised $4.4 billion in the IPO.
At $4.4 billion, Didi’s listing is the second-largest by a Chinese company on record, after Alibaba’s (BABA) – Get Report $25 billion debut in 2014, according to data compiled by Bloomberg.
Uber Technologies (UBER) – Get Report took a stake in Didi in 2016 when it merged its China unit with Didi after falling behind the company in the world’s biggest market.
Following Didi’s debut on Wednesday, Uber’s current 12% stake is worth about $8.1 billion, according to Bloomberg.
5. — Micron Sees Continued Strong Demand for Memory Chips
Semiconductor maker Micron Technology (MU) – Get Report issued an earnings and sales forecast for its fiscal fourth quarter above Wall Street estimates and said it was selling its fabrication plant in Utah for Texas Instruments (TXN) – Get Report for $1.5 billion.
Shares of Micron, the the largest U.S. maker of memory chips, fell 2.89% to $82.52 in premarket trading Thursday. The stock has risen about 13% so far this year
Micron said it expects adjusted profit in the fourth quarter of $2.30 a share, plus or minus 10 cents. Revenue was forecast at $8.2 billion, plus or minus $200 million.
CEO Sanjay Mehrotra told investors on a conference call that demand was strong across all of the company’s markets, Bloomberg reported.
He also said prices and demand were rising for Micron’s two main products. But costs also were moving higher as Micron looks to mitigate the risks of future supply disruptions and shift manufacturing to more expensive products, the CEO said.
Supplies of computer memory and storage chips will remain “tight” into
2022, he said.