US Pre-Market: Cisco Slides 7% on Margins as July PPI Prints Flat

Sentiment: mixed S&P 500 futures: +0.15%

S&P 500 futures held +0.15% at 7,782.25 at 8:45am ET after July producer prices came in unchanged for the month against expectations near +0.2%. CSCO.US fell 6.97% to $115.25 in pre-market trade after fiscal fourth quarter revenue of $17.3 billion and guidance above consensus came with narrower gross margins. WTI crude fell 2.37% to $81.30, extending the energy decline that pulled final demand goods prices down 0.7% in the same PPI report.

Overnight drivers

• July PPI was unchanged at 0.0% for the month, against expectations near +0.2%, with the 12 month rate easing to 4.7% from 5.5% in June. Final demand goods fell 0.7% as gasoline prices dropped 5.7%. Final demand less foods, energy and trade services rose 0.4% after inching up 0.1% in June.
• Initial jobless claims came in at 209,000 for the week ended 8 August, up 9,000 from a revised 200,000 and above the 202,000 consensus. The four week average held at 199,000, continuing claims fell 22,000 to 1,777,000, and the insured unemployment rate stayed at 1.2%.
• CSCO.US guided fiscal first quarter revenue to $18.0 billion to $18.2 billion against $16.8 billion consensus, and fiscal 2027 earnings to $5.05 to $5.11 per share against $4.83 expected. Gross margin compression outweighed both, and the 8.63 point price decline is worth roughly 50 Dow points.
• WTI crude fell 2.37% to $81.30 and Brent 2.12% to $87.09. Crude petroleum prices fell 11.9% within the July PPI intermediate goods data.

Overnight Asia and Europe

• KOSPI +3.56% to 6,813.34, a fourth straight advance, with Samsung Electronics up about 5% and SK Hynix about 7% on memory demand expectations.
• Nikkei 225 +1.16% to 68,308.59. Japanese wholesale inflation eased to 7.2% year on year in July against the 7.4% economists expected.
• Hang Seng -0.17% to 25,396.51.
• DAX +0.42% to 26,441.15 and STOXX 600 +0.17% to 660.59 in mid session. FTSE 100 -0.30% to 10,800.42.

Pre-market movers

• CSCO.US -6.97% to $115.25. Fiscal fourth quarter revenue rose 18% to $17.3 billion and adjusted earnings of $1.22 beat the $1.17 estimate, but gross margin narrowed. The stock rose 2.86% on Wednesday.
• COHR.US -6.29% to $333.48, wiping out an 8.24% Wednesday gain. Earnings of $1.74 topped the $1.65 estimate and revenue of $2.05 billion rose 34%.
• DELL.US +3.69% to $502.50 and HPE.US +2.81% to $60.45, adding to Wednesday gains of 9.87% and 8.11% after SMCI.US guided AI server revenue above consensus. SMCI.US +1.31% this morning following a 19.02% Wednesday advance.
• NBIS.US -3.63% to $249.79, returning part of a 34.14% Wednesday gain.
• MUFG.US +2.31% to $23.29, with September Bank of Japan rate rise expectations intact after the July wholesale inflation print.
• PANW.US +2.61% to $397.10. Unannounced, likely flow-driven.
• LITE.US -1.29%, GLW.US -1.61% and ANET.US -0.94%, each lower after Wednesday gains of 13.63%, 5.18% and 6.39%.
• ROST.US -2.22% to $242.74 and JD.US -3.20% to $30.60.

Wednesday's close

• S&P 500: 7,748.50 (+0.26%)
• Nasdaq Composite: 26,588.49 (+0.54%)
• Dow: 53,770.27 (-0.04%)
• Russell 2000: 3,045.48 (+0.61%)
• VIX: 14.55

July CPI on Wednesday rose 0.1% for the month and 3.4% over the year, matching forecasts. The 10 year Treasury yield sits at 4.67% and the dollar index at 99.94, down 0.08%. Gold futures eased 0.42% to $4,448.70.

US economic calendar today (ET)

• 8:30am: July PPI, released at 0.0% for the month and 4.7% over 12 months
• 8:30am: Initial jobless claims, released at 209,000
• 1:00pm: 30 year Treasury bond auction
• After the close: AMAT.US fiscal third quarter results, with consensus near $9 billion revenue and $3.39 per share

What to watch

• Futures are mixed at 8:45am ET: S&P 500 +0.15%, Nasdaq 100 -0.02%, Dow +0.23%, Russell 2000 +0.17%.
• DELL.US, HPE.US and SMCI.US trade higher while CSCO.US, COHR.US, LITE.US, GLW.US and ANET.US trade lower, after all eight rose on Wednesday.
• AMAT.US closed Wednesday at $548.15, up 4.29% on the session and about 25% below its June high, ahead of tonight's report.
• Insured unemployment has held at 1.2% every week since early May.

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