Stock Analysis & Ideas

Friday’s Pre-Market: Here’s What You Need to Know Before the Market Opens

U.S. stock futures were relatively flat on Friday after powering to record highs on Thursday ahead of the much-anticipated Non-Farm Payroll report for June.

Dow futures were up 0.07%, S&P 500 futures rose 0.06%, and NASDAQ futures had climbed 0.15% at the time of writing. The indices continue to flirt with record highs at the start of the third quarter, supported by upbeat economic data in recent days.

Jobless claims edging lower and touching the lowest level since pandemic-led shutdowns would affirm the U.S. economic recovery. Better-than-expected jobs data for June could come to haunt the equity markets as expectations of rate hikes could fuel a pullback.

Investors are anticipating quarterly earnings data from Alkaline Water Company (WTER) and North Bud Farms (NOBDF) before the open. Australis Capital (AUSAF), Concord Medical Services Holdings (CCM), and Vizsla Silver Corp (VIZSF) are poised to report after market close, while Key Energy Services Inc. (KEGX) is also expected to report later today.

Virgin Galactic Holdings (SPCE) was one of the most active stocks in pre-market rallying 27.43% on 2.27 million shares exchanging hands at the time of writing. The move higher comes as the company confirmed it is attempting to launch its next test spaceflight on July 11, carrying its founder, Richard Branson.

TAT Technologies (TATT) was the biggest pre-market gainer, rallying 43.63% at the time of writing. The rally comes after the company confirmed that its wholly-owned subsidiary Tat Piedmont has inked a strategic MRO and lease agreement with Honeywell to repair and overhaul the 131 Series of Auxiliary Power Units.

Igal Zamir, TAT Technologies CEO stated, “The Company believes that due to the execution of the new strategic agreement with Honeywell, its addressable market size in the MRO segment is expected to grow in a substantial manner, and therefore opens the door to TAT for potentially significant revenue growth in the MRO segment.”

Iterum Therapeutics (ITRM) was the biggest loser in the pre-market, falling 26.57% at the time of writing. The stock dropped as investors reacted to a letter from the Food and Drug Administration that cast doubt on the company’s New Drug application for sulopenem etzadroxil/probenecid.

In the letter, the agency said it has identified deficiencies that preclude the continuation of discussions and post-marketing requirements for the candidate drug. The agency is yet to detail the deficiencies discovered.

While we are disappointed by this news, we continue to believe in the potential of sulopenem to help address the growing challenge of antibiotic resistance,” said Corey Fishman, Chief Executive Officer of Iterum Therapeutics.

Acuity Brands (AYI) shares fell 5.8% despite the lighting and building management firm delivering solid third-quarter earnings and revenue that topped analyst expectations. Net sales jumped 15.9% to $899.7 million, topping analyst expectations of $839.75 million.

Adjusted earnings, on the other hand, came in at $2.77 per share, above the $2.77 per share expected by analysts, and up 42.8% year-over-year.

Acuity Brands CEO Neil Ashe said, “We continue to allocate capital effectively with the acquisition of ams OSRAM’s North American Digital Systems business which will contribute to innovation and long-term growth.”

Amazon (AMZN) is investing in a research and development facility in Helsinki, Finland, to support its Amazon Scout delivery program that develops its autonomous electric delivery device. The electric delivery device is currently being used to make deliveries in four locations in the U.S.

The investment in Sweden will allow the Amazon Scout team to focus on building 3D software to enhance Scout navigation around obstacles when making deliveries.

The Amazon Scout team in Helsinki will grow over time. We’re now hiring engineers who are at the forefront of robotics and autonomous systems technology,” Amazon wrote in a blog post.

In M&A news Hewlett Packard Enterprise (HPE) has moved to strengthen its prospects in data management and protection with the acquisition of Zerto for $374 million. Zerto is expected to contribute about $130 million in run-rate revenues, with the transaction poised to close in the fourth quarter.

Additionally, the acquisition should strengthen Hewlett Packard’s research and development portfolio while also expanding HPE GreenLake cloud data services.

Customers continue to face significant issues managing data complexity across hybrid and multi-cloud environments. Zerto further positions HPE to help solve these customer challenges and become the leader in data management and protection through HPE GreenLake cloud services,” said SVP and GM of HPE Storage, Tom Black.

Accenture (ACN) has reached an agreement to complete the acquisition of Ethica Consulting Group. The global professional services firm is yet to reveal the terms of the deal. If successful, the company will gain access to a group of technology companies that Ethica operates, including Expedia and Stevie.

The acquisition is also expected to boost Accenture’s SAP capabilities while providing access to solutions that clients can use to develop innovative services and products.

Head of Accenture Technology in Italy, Central Europe, and Greece, Alessandro Marin, said, “Bringing in Ethica’s talent and resources will allow us to further scale our SAP capabilities in Italy and help companies use technology to become more agile and productive.”

Tesla (TSLA) could set a new record on car deliveries. The Street expects the U.S. automaker to report 200,000 car deliveries for Q2 against 184,800 delivered in the first quarter. A survey by Bloomberg on 11 analysts indicates the company could report 204,160 car deliveries for the quarter.

The automaker is coming off a challenging second quarter characterized by tight inventory and chip shortages that have affected automakers’ ability to ramp up production.

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