Stock Futures Point Lower After Trump-Xi Trade Meeting, Powell Warning, Mixed Big Tech Results; Apple, Amazon Earnings on Tap

Eli Lilly Stock Surges as Drugmaker Lifts Outlook Following Robust Mounjaro, Zepbound Sales

41 minutes ago

Strong sales of Eli Lilly’s blockbuster weight-loss treatments Mounjaro and Zepbound are powering its shares Thursday morning.

Eli Lilly (LLY) stock surged 4% in premarket trading after the maker of diabetes treatment Mounjaro and obesity drug Zepbound lifted its full-year outlook following stronger-than-expected third-quarter results.

The Indianapolis-based firm reported adjusted earnings of $7.02 per share on revenue that soared 54% year-over-year to $17.60 billion. Analysts surveyed by Visible Alpha had expected $5.91 and $16.06 billion, respectively.

Mounjaro sales more than doubled to $6.52 billion, topping projections of $5.41 billion. Sales of Zepbound skyrocketed nearly tripled to $3.59 billion, while analysts had estimated $3.37 billion.

As a result, Lilly raised its full-year revenue guidance to a range of $63.0 billion to $63.5 billion from the prior $60 billion to $62 billion, and its adjusted EPS outlook to $23.00 to $23.70 from $21.75 to $23.00.

Eli Lilly shares entered Thursday up just 5% year-to-date, trailing the benchmark S&P 500’s 17% advance.

Chipotle Stock Sinks on Comparable-Restaurant Sales Outlook Cut as Young Customers Visit Less Often

1 hr 12 min ago

Young customers are making fewer visits to Chipotle.

Shares of Chipotle Mexican Grill (CMG) sank 17% in premarket trading Thursday, a day after the fast-casual chain cut its comparable-restaurant sales outlook as it said inflation is taking a toll.

The Newport Beach, Calif.-based company reported third-quarter revenue of $3.00 billion, up 7.5% year-over-year but below the $3.06 billion consensus estimate of analysts polled by Visible Alpha. Adjusted earnings of $0.29 per share matched expectations.

Chipotle now sees full-year comparable-restaurant sales down “in the low-single-digit range” versus its July forecast of “about flat” comparable sales. “We continue to see persistent macroeconomic pressures,” CEO Scott Boatwright said in the earnings release.

On a later call with analysts Wednesday, Boatwright said that Chipotle is seeing a “significant pullback” from customers 25 to 34 years old who make less than $100,000 a year. “We’re losing them to grocery and food at home,” he said. “And so, that consumer is under pressure. It is one of our core consumer cohorts. And so, they feel the pinch and we feel the pullback from them as well.” 

Chipotle shares entered Thursday having lost about a third of their value this year.

How the Federal Reserve Could Inflate or Pop an AI Bubble

1 hr 37 min ago

Concerns about an AI bubble have some on Wall Street warily eyeing Silicon Valley, but others say they’re looking in the wrong direction. Washington, D.C.—specifically the Eccles Building, where the Federal Open Market Committee sets monetary policy—is where the fate of an AI bubble may be decided, they say. 

“I think you’re going to have a very hard time popping a bubble when the Fed is cutting rates,” said Jeff deGraaf, Chair and Head of Technical Research at Renaissance Macro Research, on a recent episode of the firm’s weekly Youtube series. The Dotcom bubble, the U.S. housing bubble, and the Japanese bubble of the late 1980s all popped either while or shortly after central banks hiked rates, according to deGraaf.

Artificial intelligence has propelled stocks to record highs this year, but recent developments have raised some red flags. A series of circular deals by the likes of AI bellwethers Nvidia (NVDA) and OpenAI have drawn comparisons to the vendor financing agreements that fueled bubbles in the 1990s. The Magnificent Seven account for 35% of the S&P 500, evidence of an increasingly concentrated stock market. And the benchmark index’s price-to-earnings ratio isn’t far off the Dotcom Bubble’s peak.

“I think it’s early,” DeGraaf said of a potential AI bubble, evidence of which he argued doesn’t appear to be “rampant” yet. Though, he warned, “you could have [a] world play out where the economy softens, the Fed is forced to get more aggressive, and the market absolutely goes into the stratosphere because they’re looking at the liquidity. And I think that’s a big disconnect that people don’t appreciate.”

Read the full article here.

–Colin Laidley

Stock Futures Point Lower After Trump-Xi Meeting, Powell Warning, Big Tech Results

1 hr 53 min ago

Futures tied to the Dow Jones Industrial Average were down 0.3%.

S&P 500 futures were 0.1% lower.

Nasdaq 100 futures also were down 0.1%.