ADVFN Logo
Registration Strip Icon for discussion Register to chat with like-minded investors on our interactive forums.

Tuesday’s Wall Street Highlights: Novartis, BofA, Dollar General, Uber, Masimo and more

Fernanda T
Latest News
July 18 2023 03:27AM

US Index Futures operate without a defined direction in pre-market on Tuesday, awaiting economic data and corporate earnings, while European markets undergo adjustments and operate higher.

By 6:53 AM, Dow Jones (DOWI:DJI) futures were up 2 points, or 0.01%. S&P 500 futures were down -0.07%, while Nasdaq-100 futures were down -0.15%. The 10-year Treasury yield is at 3.76%.

In Europe, positive investor sentiment was boosted by strong second-quarter results from UK supermarket chain Ocado. In addition, Swiss pharmaceutical company Novartis also contributed to the rise of European markets by increasing its earnings forecast for the year and announcing a €15 billion share buyback plan, to be completed by 2025.

On Tuesday’s American economic agenda, attention is turned to economic data such as retail sales for June, to be released at 8:30 am, for which the market consensus expects a positive variation of 0.50% in comparison with May. Another awaited data is the American industrial production, to be released at 9:15 am, with a forecast of stability in the June number, on a monthly basis. At 10:00 am, the Vice President of Supervision, Michael Barr, will deliver a speech, and also the July Builder Confidence Index will be released. At 4:30 pm, oil inventories for the week up to 7/14 will be announced.

Elsewhere in commodities markets, West Texas Intermediate crude for August is up 0.46% at $74.49 a barrel. Brent crude for September is up 0.38% near $78.80 a barrel. Iron ore futures traded in Dalian, China, follow the movement and rise 0.66%, at US$117.74 per tonne.

By Monday’s close, the Dow was up 76.32 points or 0.22% to 34,585.35 points. The S&P 500 rose 17.37 points or 0.39% to 4,522.79 points. The Nasdaq Composite jumped 131.25 points or 0.93% to 14,244.95 points. On Monday morning, investors reacted to China’s GDP data, which showed a qualitative worsening, with household consumption and private sector investment showing further stagnation. However, with the industry data from the Empire State Index of Sector Activity from the Fed NY, the market started to improve. The index decelerated to 1.1 pts., against the expected -4.3 points. Although it represents a loss of strength in the economy, given that the last number (from July) was 6.6 pts, the number was much better than expected, indicating some breath in the North American economy.

On the corporate earnings front for Tuesday, Morgan Stanley (NYSE:MS), Bank of America (NYSE:BAC), Lockheed Martin (NYSE:LMT), Prologis (NYSE:PLD), Charles Schwab (NYSE:SCHW), PNC Financial (NYSE:PNC) and Bank of New York Mellon (NYSE:BK) will be the highlights of the day.

Wall Street Corporate Highlights for Today

Apple (NASDAQ:AAPL) – According to Morgan Stanley analyst Erik Woodring, Apple’s India business has huge growth potential, potentially growing sevenfold over the next 10 years to reach $40 billion in annual revenue. Recent investments in brand awareness and local manufacturing, combined with India’s economic growth and digitalization, are laying the groundwork for this growth. Woodring believes India will drive 15% of Apple’s revenue growth over the next five years and add more than 170 million users to the company’s ecosystem. In other news, an original 4GB factory-sealed iPhone sold at auction for a record $190,373. The rare version of the device that was only offered for a few months in 2007 attracted a lot of bids, surpassing the previous sales record for an iPhone. Auction house LCG Auctions highlighted the rarity and immaculate condition of the item, which was maintained by a former member of Apple’s engineering team.

Microsoft  (NASDAQ:MSFT)Activision Blizzard  (NASDAQ:ATVI) – Microsoft is negotiating an extension of its acquisition agreement with Activision Blizzard to overcome remaining regulatory hurdles for the $69 billion deal. The extension seeks to prevent Activision from being targeted by other buyers and gives more time for regulatory solutions. Furthermore, Microsoft’s appeal against the blocking of Britain’s takeover of Activision Blizzard has been stalled by the Competition Court of Appeal. The two-month break will allow the parties to address the Competition and Markets Authority (CMA) concerns.

Berkshire Hathaway  (NYSE:BRK.A) – Berkshire Hathaway sold a 70% stake in  Activision Blizzard  (NASDAQ:ATVI) in the second quarter before a federal judge allowed the acquisition by Microsoft (NASDAQ:MSFT). The remaining stake indicates that Buffett exited the arbitrage bet.

Netflix  (NASDAQ:NFLX) – Investors in Netflix will weigh the risks of the ongoing Hollywood strike when the company reports its quarterly results on Wednesday. However, analysts say that Netflix is ​​well positioned due to its solid content pipeline and international production team.

Walt Disney  (NYSE:DIS) – Shares in Walt Disney reached a 2023 low, approaching a 52-week low, on concerns about the entertainment industry. Challenges include the volatile media landscape, strikes and short-term growth prospects in the theme park business. The company has faced job cuts and changes in leadership as it grapples with the transition to streaming.

Salesforce  (NYSE:CRM) – Salesforce announced the appointment of Sabastian Niles of the law firm Wachtell, Lipton, Rosen & Katz as its new General Counsel. Niles has experience advising companies facing pressure from activist investors, including during the recent dispute with funds such as Starboard Value and Elliott Investment Management.

FedEx  (NYSE:FDX) – FedEx announced the appointment of John Dietrich as Chief Financial Officer, effective August 1. Dietrich, former CEO of Atlas Air Worldwide  (NASDAQ:AAWW), brings his experience in the aviation and air cargo industry. The company is looking to revitalize its business and protect margins amid cost cuts.

Infosys  (NYSE:INFY) – Bears betting against leading Indian tech firm Infosys Ltd. could face a turnaround if the company’s upcoming results show an expected recovery in orders. Short sale contracts have reached a record high, but Infosys shares have recently rallied due to excessive investor pessimism and reports of funding for larger orders. Analysts are projecting a small gain in quarterly revenue and future recovery could signal caution for short sellers.

Black Knight  (NYSE:BKI) – Mortgage data company Black Knight will sell its Optimal Blue unit for $700 million to comply with regulatory requirements in relation to its acquisition by the Intercontinental Exchange  (NYSE:ICE). Constellation Software has agreed to purchase the unit. Analysts believe this sale could lead to final approval of the merger. The FTC promised to take action against the original settlement, but the lower purchase price is seen as a positive sign. ICE and Black Knight are willing to fight in court to save the deal.

Starbucks  (NASDAQ:SBUX) – President Joe Biden and Senator Bernie Sanders met young union members from Starbucks and Minor League Baseball at the White House to discuss the growing strikes across the United States. The resurgence of organized work is driven by the high cost of living, housing shortages and technological advances. Biden emphasized the importance of workers’ power to the economy.

Dollar General  (NYSE:DG) – Dollar General Corp. was found guilty of “numerous and egregious” violations of federal labor law by a US labor judge. The judge ruled that the company had interfered with employees’ rights to unionize and ordered them to cease the duress, offer reinstatement to the terminated employee, and inform all employees of their rights. Dollar General has denied the allegations. The company is also under scrutiny by the US Occupational Safety and Health Administration for serious violations of working conditions.

Marriott  (NASDAQ:MAR) – Marriott has signed a 20-year licensing agreement with MGM Resorts  (NYSE:MGM), allowing Marriott loyalty program members to earn and redeem points at MGM properties. The agreement aims to increase Marriott’s net growth and provide benefits to customers.

Goldman Sachs  (NYSE:GS) – Goldman Sachs has lowered the likelihood of a US recession over the next 12 months to 20%, citing recent data that bolstered confidence that lowering inflation will not require a recession. Economic activity remains resilient despite rising borrowing costs. The bank expects a slowdown in growth, but expects the economy to continue to grow. The inversion of the Treasury yield curve was seen as a reflection of overly pessimistic forecasts and not necessarily a sign of an impending recession.

UBS  (NYSE:UBS) – UBS’ acquisition of Credit Suisse could result in job losses, employee departures and integration challenges, but UBS investors see it as a good deal. UBS bought Credit Suisse at a price it considered advantageous, with potential benefits outweighing the pitfalls. The integration of companies can take three to four years. The acquisition strengthens UBS’s position in key markets and could deliver long-term profits.

Deutsche Bank AG  (NYSE:DB) – The European Central Bank (ECB) has issued criticisms of Deutsche Bank AG in relation to the forex sales, even after an internal investigation completed by the bank. The ECB has asked Deutsche Bank to improve supervision and checks in its business selling currency derivatives to European companies. The instruction follows a previous internal investigation that resulted in procedural changes. The ECB expressed concern at the lack of adequate explanation of the risks associated with the products sold to customers by the bank.

BlackRock  (NYSE:BLK) – BlackRock has appointed Amin Nasser, CEO of Saudi Aramco, as an independent director. His experience in the energy industry will fill a gap on BlackRock’s board. The company seeks to balance investments in fossil fuels with the promotion of energy transition. At the same time, BlackRock will offer proxy voting options to retail investors in its flagship exchange-traded fund. This allows for greater investor participation in determining how the fund votes on environmental, social and governance issues. The move is a significant expansion of BlackRock’s efforts to give investors more control.

Coinbase  (NASDAQ:COIN) – Brian Armstrong, CEO of Coinbase, will meet privately with Democrats from the U.S. House of Representatives to discuss the future of digital asset legislation. The meeting comes as Coinbase and Binance face SEC lawsuits for failing to register their trades. Armstrong will address issues such as taxation, national security, privacy and climate. He is a critic of the SEC and SEC Chairman Gary Gensler.

Uber  (NYSE:UBER) – The California Supreme Court has ruled that an UberEats driver can sue the company for reimbursement of business expenses, even though they have signed a private arbitration agreement. This decision could have a significant impact on California businesses and is a victory for labor rights advocates. Business groups have expressed concerns and said this could lead to lawsuits without merit.

Advance Auto Parts  (NYSE:AAP) – TRC Capital Investment Corp. made an unsolicited “mini-offer” to purchase up to 1 million shares of Advance Auto Parts at a price below the stock’s closing price. The company stated that it is not associated with TRC and did not express an opinion on the offer. Offer expires on August 9th.

General Motors (GM) – According to Reuters, General Motors is experiencing high demand for its vehicles in the U.S., but is struggling to deliver them quickly to dealerships due to post-Covid logistical challenges. Availability at dealerships needs to be improved, but the company has enough stock. Sales of the Hummer EV and Lyriq electric vehicles are gaining momentum despite limited quantities available. GM expects strong sales performance in the second half of the year.

Ford Motor  (NYSE:F) – Ford has slashed prices on its F-150 Lightning pickup trucks in an attempt to compete with Tesla  (NASDAQ:TSLA) in the electric vehicle market. The drop in prices was possible due to improvements in the scale of production and raw material costs for batteries. Ford shares closed down 6% on Monday.

Tesla  (NASDAQ:TSLA) – Tesla will hold a question-and-answer session with citizens of the German state of Brandenburg to discuss expansion plans for its EV factory. The event aims to avoid delays and obtain approval from local authorities. Tesla’s factory plans to double its production capacity to one million vehicles a year.

Fisker  (NYSE:FSR) – Fisker has announced that it will produce 100 limited edition electric SUV vehicles for the Indian market, with deliveries expected in the fourth quarter of this year. The company plans to complete final checks on the SUV and offer it at prices in line with the European market. Fisker has a manufacturing contract with Magna International and plans to produce future models in partnership with Foxconn in India.

Raytheon Technologies  (NYSE:RTX)Northrop Grumman  (NYSE:NOC) – Raytheon and Northrop Grumman have been awarded a US Department of Defense contract to continue testing and building ultra-high-speed hypersonic missile systems. The goal is to reduce risk and improve the design of these systems. The companies will build and fly the flying vehicles known as HAWC, which use air to reach speeds beyond the speed of sound. The partnership between the two companies began in 2013 and this program is crucial to providing essential capabilities for the military.

Raytheon Technologies   (NYSE:RTX) – Defense and aerospace company Raytheon Technologies announced that it has changed its name to RTX. However, its shares will continue to trade under the previous name until July 26th.

AT&T  (NYSE:T)Verizon  (NYSE:VZ) – AT&T shares hit a 30-year low on Monday after analysts downgraded the stock following reports that the company left toxic lead power cables buried in the US. The news raised concerns about unquantifiable financial risks and negatively affected share prices. Verizon shares also fell, reflecting the backlash from the report. However, analysts do not believe that the telecom industry will face major legal liabilities arising from this issue.

Moderna  (NASDAQ:MRNA) – One of the co-founders of Moderna recently acquired more shares in Evelo Biosciences  (NASDAQ:EVLO), a biotechnology company. Flagship Pioneering affiliates, led by Noubar Afeyan, paid $12.5 million for 5.4 million shares of Evelo. Flagship now owns 6.5 million shares of Evelo. The purchase was made through a private placement. Evelo will use the proceeds to fund clinical trials and pay down debt. Evelo is developing inflammation drugs that work in the small intestine, with the potential to treat inflammatory diseases and cancer.

Novartis  (NYSE:NVS) – Novartis raised its full-year earnings forecast and announced the planned spinoff and public debut of its generics business Sandoz for October. Group sales in the second quarter beat expectations, boosted by the drug Entresto and the Kesimpta injection. Sandoz will undergo a strategic review as an autonomous group, focusing on biosimilars. Novartis is also starting a share buyback program of up to $15 billion.

BridgeBio Pharma  (NASDAQ:BBIO) – Shares in BridgeBio Pharma rose significantly, rising by 76% on Monday after the biopharmaceutical company reported positive results from a Phase 3 study of its developing drug called acoramidis, intended to treat amyloid cardiomyopathy transthyretin (ATTR-CM).

Earnings

Taiwan Semiconductor Manufacturing  (NYSE:TSM) – TSMC, the world’s largest contract chipmaker, is likely to post a 27% drop in second-quarter net profit on Thursday due to global demand for semiconductors. However, analysts expect an improvement in business in the current quarter, driven by demand for artificial intelligence and launches of new iPhones.

Bank of America  (NYSE:BAC) – Bank of America is set to announce its financial results before market open, and Wall Street expects second-quarter profit to rise 11% year-on-year to $6.90 billion. Earnings per share are estimated at 84 cents on dollar revenue of $25 billion. Increased net interest income to $14.2 billion is expected to be the main driver of earnings.

Morgan Stanley  (NYSE:MS) – Morgan Stanley will also report its second quarter results on Tuesday morning. A slowdown in business activities is expected to affect investment bank profits. According to analysts polled by FactSet, earnings per share were estimated at $1.20 during the period, down from $1.44 a year ago.

FB Financial  (NYSE:FBK) – FB Financial reported second-quarter earnings of 77 cents per share on Monday, beating estimates of 65 cents.

Masimo  (NASDAQ:MASI) – Hospital equipment maker Masimo (MASI) posted a nearly 27% drop in premarket Tuesday after announcing it expects sales of between $453 million and $457 million in the second quarter, significantly below analyst forecasts of $553 million. The company cited the postponement of large orders to the second half of the year as one of the factors. Furthermore, Masimo said it is taking steps to reduce costs in the second half of 2023.

Lockheed Martin  (NYSE:LMT) – In the quarterly results Lockheed reports on Tuesday, attention will be focused on the F-35 fighter jet as deliveries slow and this could affect the second half of 2023. Analysts forecast Lockheed to earn $6.45 per share for the second quarter on sales of $15.92 billion.

International Business Machines   (NYSE:IBM) – When IBM reports its quarterly earnings, analysts will be eyeing the performance of the Red Hat software platform, with concerns about its growth potential. Furthermore, the company’s WatsonX AI initiative may not have a significant financial impact in the near term. Analysts highlight the importance of Red Hat’s growth and the need for evidence of traction in the AI ​​space. While IBM has bet on AI, the material contribution may not come until next year. The company recently acquired Apptio, which could boost its software growth.

Market view

Pinterest  (NYSE:PINS) – Pinterest rose 3.5% to $30.18 after analysts at Evercore ISI raised the stock to “Outperform” from “In Line”, setting a price target of $41.

Shopify  (NYSE:SHOP) – Shopify stock has had a volatile ride over the past three years. After a strong rally during the pandemic, the stock has dropped significantly, but has recovered this year. However, Evercore analyst Mark Mahaney downgraded his rating to In Line from Outperform while sticking to his $69 price target, citing this year’s robust rally has reduced the stock’s appeal.

Yelp   (NYSE:YELP) – Yelp rose 10% on Monday after the local recommendation site was upgraded to Buy from Neutral by Goldman Sachs.

Yeti  (NYSE:YETI) – Yeti fell 6.5% on Monday after the maker of high-end refrigerators was downgraded to Underweight from Sector Weight by KeyBanc.

Progressive  (NYSE:PGR) – Progressive gained 4.3% on Monday after the insurer was upgraded to Overweight from Neutral by JP Morgan.

State Street  (NYSE:STT) – State Street closed down 2.4% on Monday after receiving downgrades from UBS, JP Morgan and Keefe Bruyette. The stock fell 12% on Friday after it released second-quarter results.

Twilio  (NYSE:TWLO) – Twilio closed down 0.6% on Monday after the software company’s stock was downgraded to Neutral from Overweight by Piper Sandler.