Moody’s cuts the ratings for several banks while warning of downgrading others and UPS lowers its revenue and margins forecast following its new labor contract. Here’s what investors need to know today.
1.Moody’s Cuts Ratings for US Banks, Places Others on Review
Moody’s cut the credit rating of several small and mid-sized U.S. banks on Monday and warned it may downgrade some of the nation’s larger banks as the sector’s credit strength will likely be tested by weaker profits. In pre-market trading, shares of New York Mellon (BK) were down 2.4%, US Bancorp (USB) dropped 1.5%, Truist Financial (TFC) fell 1.4%, and State Street (STT) dipped 0.2% after being placed on review for a downgrade by Moody’s.
2. UPS Lowers Its Forecast Following Labor Contract
United Parcel Service (UPS) lowered its 2023 forecast for revenue and operating margins after its recently-negotiated labor contract, along with softening ecommerce demands, have impacted the world’s largest parcel delivery service. UPS expects its 2023 revenues to come in about $93 billion, compared with its prior forecast of $97 billion, while its operating margin is expected to drop to around 11.8%, compared with its prior forecast of 12.8%. Shares of UPS fell 6% in pre-market trading.
3. Palantir Raises Full-Year Guidance, Rolls Out Share Buyback Program
Palantir Technologies (PLTR) raised its full-year guidance and reported second-quarter revenue of $533 million that beat its guidance of $532 million and was in line with analyst estimates. The big data analytics provider also announced it would start a $1 billion stock repurchase program, its first since going public in 2020. Shares of Palantir were flat in pre-market trading.
4. Disney Task Force Seeks AI Opportunities Amid Strikes
The Walt Disney Co. (DIS) has reportedly created a task force to study how artificial intelligence (AI) can be applied across the businesses of the entertainment conglomerate, a key flashpoint in the current Hollywood writers and actors strikes. Launched before the strike, the task force is looking to develop in-house applications, as well as form partnerships with startups. Shares of Disney were little changed in pre-market trading.
5. US Trade Deficit Expected to Decrease
The U.S. trade deficit is expected to have declined to $65 billion in June, down from $68.98 billion the prior month, when that data is released at 8:30 a.m. ET. At 10 a.m. ET, data on U.S. wholesale inventories is expected to show a drop of 0.3% in June, after no change in May. Investors will also hear from Philadelphia Fed President Patrick Harker and Richmond Fed President Thomas Barkin in morning speeches.