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Wall Strret slightly up early in session
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FAANG under pressure over Nasdaq 100 rebalancing plans
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Zillow Group on wave of raised Piper Sandler recommendation
The start of Tuesday's trading session saw moderate rallies in Wall Street indices as they await the release of tomorrow's CPI inflation report, which will be a key factor in creating further Fed decisions on interest rates. The standout company at the start of the session is Salesforce in particular (up 4% after news of a price increase for its services).
On the other hand, however, the FAANG companies (technology companies with the largest market capitalisation) are under downward pressure following the Nasdaq announcement that it plans to rebalance the Nasdaq 100 index to reduce the overconcentration of the benchmark relative to the largest companies. Details of the modification rule will be announced this Friday and will come into effect on 24 July. According to preliminary Nasdaq documents, this treatment could reduce the share of Microsoft (MSFT.US), Alphabet (GOOGL.US), Apple (AAPL.US), Nvidia (NVDA.US), Amazon (AMZN.US) and Tesla (TSLA.US) to 40 per cent relative to the overall index (currently 50.9 per cent).
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Since the beginning of the year, the largest-cap companies have scored a huge wave of appreciation against their peers. The index rebalancing announcement triggers moderate declines in these FAANG stocks early in the session. Source: xStation5
S&P 500 Index categorised by sector and industry. Size denotes market capitalisation. Source: xStation5
The US500 Index gains nearly 0.3% early in today's session. Source: xStation 5
Company news:
JetBlue Airways (JBLU.US) shares are losing more than 2% early in the session as Evercore ISI downgrades the airline's stock to an 'underweight' rating in the face of recent sharp share price rallies and concerns about the company's balance sheet.
Bank of America and Jefferies raise their recommendation on JP Morgan (JPM.US) and US Bancorp (USB.US) shares ahead of the release of Q2 results.
Shares of Iovance Biotherapeutics (IOVA.US) are losing nearly 10% early in the session on the valuation of the IPO of 20 million common shares at $7.5 per share (a 15% discount to yesterday's closing price).
Source: xStation 5
Piper Sandler raised its recommendation on Zillow Group (Z.US) shares to an 'overweight' rating and set a target price of US$62 per share. The analyst sees that new initiatives and an improved housing environment could support the company's stock.
Source: xStation 5
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