US stock futures experienced a retreat on Tuesday, July 2, 2024, as investors approached the crucial June jobs data and the July 4 holiday with caution. The Dow Jones Industrial Average, S&P 500, and Nasdaq 100 futures all experienced decreases of approximately 0.4%, 0.6%, and 0.4% respectively. This downward trend comes as investors consider the potential for a Donald Trump election win and its potential impact on the market, as well as doubts about whether the first-half rally can be sustained throughout the rest of the year.
The Federal Reserve chair, Jerome Powell, is due to speak at an ECB meeting on Tuesday, and his views on inflation and the labor market will be closely listened to. Additionally, a reading on weekly job openings will be taken into account to inform expectations for interest-rate cuts.
Political risk is also a concern, as investors consider what a Trump win could mean for markets, amid growing speculation about Biden’s future as the Democratic Party’s standard bearer. The 10-year Treasury yield nudged lower on Tuesday following a rise the previous day.
In company news, Tesla’s shipments of China-made EVs dropped 24% in June amid a fierce price war, leading to a 1% decrease in its share price in pre-market trading. Investors are awaiting data on the carmaker’s second-quarter production and deliveries.
On a related note, an analyst at EvercoreISI, Mark Mahaney, provided insight into a possible investment thesis in Chewy, following the disclosure of a 6.6% stake in the company by Keith ‘Roaring Kitty’ Gill. Mahaney highlighted Chewy’s potential for growth in sponsored ads, international expansion, and vertical expansion (e.g. vet care clinics), among other factors. However, he also pointed out competitive pressures, valuation concerns, and an unproven push into Canada as reasons for maintaining an in-line rating for now.
Interestingly, a new survey from EvercoreISI found Chewy to be a top of mind destination for pet products.
