Here are five things you must know for Wednesday, August 24:
1. -- Stock Futures Higher As Dollar Fades Into Jackson Hole Summit
U.S. equity futures extended gains Thursday, while a softer U.S. dollar helped pulled Treasury bond yields modestly lower, as investors looked to the start of the Fed's Jackson Hole symposium and what could be an important reading of second quarter growth.
Stocks are still moving in lock-step with interest rate expectations, however, and investors appear to be worried the Federal Reserve Chairman Jerome Powell will double-down on the central bank's inflation fight when he speaks at its annual retreat in the resort town in Wyoming.
However, a series of grim readings for the housing sector, a surging U.S. dollar and slowing manufacturing activity over the month of August may have blunted domestic growth enough to allow for a more dovish outlook on rates, particularly given that fact that some of the biggest economies in the world outside of the United States are likely to slow precipitously over the second half of the year.
Still, bets on another 75 basis point rate hike from the Fed, following two similar increases in June and July, edged higher overnight, to 54.5%, according to the CME Group's FedWatch tool, even as the dollar slipped lower against its global peers.
The moves could be linked to a surprise reading of second quarter GDP in Germany, Europe's largest economy, which clawed its way to a 0.1% gain over the three months ending in July.
Reaction to that reading was muted, however, by a closely-watched survey of business expectations published by the Ifo Institute, which pointed to a sharp third quarter slowdown.
Here at home, investors will get a second estimate of second quarter GDP, which is estimated to have contracted 0.8%, as well as weekly jobless claims data prior to the start of trading, each of which is likely to factor into Powell's thinking -- and speech -- tomorrow in Wyoming at 10:00 am Eastern time.
Mean, the U.S. dollar index was marked 0.37% lower against a basket of its global peers at 108.271 while benchmark 2-year Treasury note yields fell 3 basis points to 3.358%.
In overseas markets, Europe's Stoxx 600 was marked 0.64% higher following the better-than-expected German GDP data, following on from a solid 1.96% overnight gain for the region-wide MSCI ex-Japan index in Asia after China unveiled a new $44 billion stimulus package.
On Wall Street, futures tied to the S&P 500 are indicating a 36 point opening bell gain while those liked to the Dow Jones Industrial Average are priced for a 210 point move to the upside. Futures linked to the tech-focused Nasdaq are indicating a 130 point advance.
2. -- Nvidia Slumps As Chipmaker Signals More Gaming Weakness
Nvidia (NVDA) shares slumped lower in pre-market trading after the chipmaker posted weaker-than-expected second quarter earnings Wednesday and forecast more gaming sector weakness in the months ahead.
Nvidia posted adjusted earnings of 51 cents per share for the three months ending in July, the group's fiscal second quarter, well shy of the Street consensus forecast of $1.26 per share. Group revenues, Nvidia said, rose 3% from last year to $6.7 billion, a figure that was largely in-line with the chipmaker's pre-announcement in early August.
Looking into the current quarter, Nvidia said it sees revenues of around $5.9 billion, plus or minus 2%, compared to the Street consensus of $6.95 billion, with gross margins of around 65%, plus or minus 2%.
Nvidia shares were marked 3.1% lower in pre-market trading to indicate an opening bell price of $166.85 each.
3. -- Salesforce Tumbles On Strong Dollar Hit To Sales Outlook
Salesforce (CRM) shares were sharply lower in pre-market trading after the enterprise software group trimmed its full-year revenue forecast following stronger-than-expected second quarter earnings.
Salesforce said its sees full-year sales in the region of $30.9 to $31.00 billion, down from its prior forecast of $31.7 billion to $31.8 billion, thanks in part to headwinds linked to the surging U.S. dollar and increased sector competition..
The group posted a Street-beating $1.02 per share for non-GAAP profits over the second quarter, however, as demand for its work-flow solutions, particularly from companies looking to incorporate hybrid work, remained solid, with sales rising 22% from last year to $7.72 billion.
Salesforce shares were marked 6.1% lower in pre-market trading to indicate an opening bell price of $169.03 each
4. -- Tesla Moves Higher Ahead of 3-For-1 Split Debut
Tesla (TSLA) shares moved higher in pre-market trading ahead of the trading debut for clean-energy carmaker's three-for-one stock split on the Nasdaq.
Tesla shareholders of record on August 17 were given two extra shares at the close of trading last night, following a vote to approve the split in early August. The overall market value of Tesla will remain unchanged from the split, but the price will adjust to reflect the larger number of outstanding shares.
The split follows a similar move by Google parent Alphabet (GOOGL) earlier this summer that left investors with one Google stock and a dividend payment of 19 more shares, all priced at around $120 each. Amazon (AMZN) completed its own 20-for-1 stock in June.
Tesla shares were marked 2.1% higher in pre-market trading to indicate a split-adjusted opening bell price of $303.25 each.
5. -- Sony Unveils PlayStation 5 Price Hikes - But Not In the U.S.
Sony Group unveiled a surprise price hike for its PlayStation 5 game console Thursday, but left the cost unchanged in U.S. markets, as it grapples with surging inflation and fierce competition from Microsoft's (MSFT) XBox.
Sony said PlayStation prices would rise 10% in Europe, to €550 per unit, with similar-sized hikes prepped for markets in Britain and Japan. The PlayStation price in the U.S, however, will remain unchanged, as Sony continues to battle with Microsoft, which has an estimated 53% market share, although the tech giant forecast weaker console and services revenues in its fourth quarter earnings last month.
"While this price increase is a necessity given the current global economic environment and its impact on SIE’s business, our top priority continues to be improving the PS5 supply situation so that as many players as possible can experience everything that PS5 offers and what’s still to come," Sony Interactive Entertainment President Jim Ryan wrote in a blogpost.
