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Monday’s Wall Street Highlights: Cisco Systems, GM, Alibaba, SVB Financial, Clorox and More

Fernanda T
Latest News
September 18 2023 03:25AM

US Index Futures are slightly up in Monday’s pre-market, a day with a light global agenda, with the whole week’s global focus being on the U.S. interest rate decision on Wednesday.

At 6:52 AM, Dow Jones (DOWI:DJI) futures were up 35 points, or 0.10%. S&P 500 futures rose 0.14%, and Nasdaq-100 futures increased by 0.17%. The yield on the 10-year Treasury bonds stood at 4.345%.

In the commodities market, iron ore with a 62% concentration level dropped by 0.17%, priced at $119.50 per ton, after recent rises that saw the commodity surpass the $120 mark. West Texas Intermediate crude oil for October rose 0.80% to $91.50 per barrel. Brent crude for November went up 0.64% to around $94.53 per barrel.

On Monday’s U.S. economic calendar, investors are awaiting, at 10:00 AM, NAHB housing market index, which forecasts 50 points for September, the same figure as in August, indicating the sector’s resilience. It’s worth noting that a reading below 50 points indicates a contraction in activity. At 4 PM, the government will release the foreign investment in bonds for July. In the immediately preceding month, the figure was $66.40 billion.

In Europe, markets are starting the week with losses, reacting to the 25 basis point increase in interest rates by the European Central Bank (ECB) the previous week, set at 4.50% annually, aiming to curb inflation.

In the European context, the financial sector faces challenges after the new CEO of Societe Generale, France’s third-largest bank, unveiled a strategic plan focused on cost-cutting to boost profits by 2026. As a result, the bank’s shares dropped over 6%.

In Asia, market outcomes were mixed, reflecting the positive indicators released in China the previous Friday. Data such as retail sales and industrial production exceeded expectations, demonstrating that recent incentives in the real estate and financial sectors have benefited the economy, albeit modestly.

Interest rates from two Asian giants, Japan and China, will be announced soon. Japan is trying to balance its expansive monetary policy with rising inflation, while China is seeking to boost its growth.

At Friday’s close, North American markets faced a pullback due to the notable strike by auto workers in Detroit and the expiration of options, intensifying market instability. Furthermore, information has emerged about possible delays in deliveries by Taiwan Semiconductor Manufacturing, negatively affecting the technology sector and generating fears about inflationary impacts. Dow Jones fell 288.87 points or 0.83% to 34,618.24 points. S&P 500 fell 54.78 points or 1.22% to 4,450.32. Nasdaq Composite fell 217.72 points or 1.56% to 13,708.33.

During the session, certain financial indicators were presented, such as the University of Michigan’s consumer confidence index, which indicated a positive advance and a reduction in inflationary projections. Furthermore, there was an increase in industrial production numbers. Now, the market’s attention turns to the next Fed meeting, where, although an immediate interest rate increase is not expected, there may be indications of an adjustment at the next meeting.

On Wednesday’s corporate earnings front, investors will be watching reports from GreenTree Hospitality Group (NYSE:GHG), Stitch Fix (NASDAQ:SFIX) and Investcorp Credit Management BDC (NASDAQ:ICMB).

Wall Street Corporate Highlights for Today

Alphabet  (NASDAQ:GOOGL)Verizon  (NYSE:VZ) – In the antitrust trial against Google, Verizon’s Brian Higgins will be the Justice Department’s star witness, discussing Google’s deals with carriers to dominate smartphones. Google is accused of securing dominant positions in devices through billion-dollar deals, aiming for increased profits. However, Google maintains that its agreements are aimed at quality and user experience. The antitrust investigation questions whether users stick with defaults or change them, with significant implications for Big Tech.

Arm Holdings  (NASDAQ:ARM) – Nasdaq will begin listing options contracts from SoftBank’s Arm Holdings on Monday, offering investors a new way to invest in the biggest initial public offering of the year. Other exchanges have not confirmed similar plans. The options listing could attract traders due to interest in Arm’s IPO and AI technology. Arm shares had significant fluctuations after the IPO. Experts predict high demand for the options.

Klaviyo (KVYO) – Klaviyo raised its IPO target to more than $550 million, adjusting the share price to $27 to $29. This could give the company a valuation of $8.7 billion. It will open on the NYSE on Tuesday under the symbol “KVYO.”

Instacart (CART) – Grocery delivery company Instacart is expected to begin trading Tuesday under the ticker symbol “CART.” It was recently valued at US$9.6 billion, adjusting its price between US$28 and US$30 per share. The company had revenue of $2.55 billion last year, with significant growth in its advertising business. Still, it faced losses in 2020 and 2021. The IPO market’s recent positivity could benefit its debut.

Cisco Systems  (NASDAQ:CSCO) – Cisco will lay off 350 employees in Silicon Valley in October after cutting 700 jobs in March. Despite the increase in revenue, its outlook for 2024 is cautious. Cisco shares have grown 18% this year.

Ford Motor  (NYSE:F)General Motors  (NYSE:GM) – Following the UAW strike at three auto facilities, negotiations have resumed with the ‘Big Three’ automakers, leading to a modest rise in Ford and GM shares. Shawn Fain, president of the UAW, rejected a pay raise proposed by Stellantis. Ford announced Friday that it has laid off 600 workers in Michigan.

Tesla  (NASDAQ:TSLA) – Turkish President Tayyip Erdogan asked Elon Musk, CEO of Tesla, to build a factory in Turkey. Musk mentioned he already has Turkish suppliers and considers Turkey as a potential location for a new factory. During the meeting in New York, Erdogan invited Musk to a technology festival in Turkey.

Ferrari  (NYSE:RACE) – Ferrari has renewed its multi-year partnership with Puma, which will be its premium partner next year. Puma will continue as a licensee of Ferrari products and an apparel supplier to the F1 team, continuing the collaboration that began in 2005.

Nikola  (NASDAQ:NKLA) – Nikola announced an expansion in Canada through a partnership with ITD Industries. The company, which has faced problems such as vehicle fires and recalls due to battery leaks, assured that such issues would not affect the production or delivery of its fuel cell vehicles. Deliveries are scheduled for the end of September and beginning of October.

Starbucks  (NASDAQ:SBUX) – Starbucks named Molly Liu executive vice president and co-CEO of Starbucks China, effective October 2. Liu, chief operating officer since 2021, will co-lead with Belinda Wong, current CEO.

Clorox (NYSE:CLX) – Clorox shares fell in premarket trading Monday after revealing a cyberattack in August that will affect its fiscal first-quarter results. The full financial impact is still uncertain. The attack crippled its IT infrastructure, causing major disruptions to operations.

Alibaba  (NYSE:BABA) – Alibaba plans to invest US$2 billion in Turkey, as informed by the company’s president, Michael Evans, to Turkish President Tayyip Erdogan. Previously, Alibaba invested $1.4 billion in Turkish platform Trendyol. New investments will include a logistics center in Ankara and export operations in Istanbul.

Pfizer  (NYSE:PFE),  Seagen  (NASDAQ:SGEN) – The European Commission will decide whether to approve Pfizer’s $43 billion bid for Seagen by October 19, and may require further investigation.

JPMorgan Chase  (NYSE:JPM) – On Friday, JPMorgan and ANZ adjusted their China growth forecasts for 2023 following signs of economic stabilization in August. They raised GDP expectations to 5% and 5.1%, respectively, citing retail sales and services activity. Despite the recovery, concerns about the real estate sector persist. Goldman  Sachs (NYSE:GS) maintained its forecast at 4.9%, highlighting the challenges facing the Chinese economy. Additionally, India expects to raise more than $30 billion annually through equity sales starting in 2024, according to JPMorgan. Abhinav Bharti of JPMorgan believes in the growing willingness of Indian companies to raise funds. IPO activity in India declined in 2023 but could revive after the 2024 elections.

Goldman Sachs  (NYSE:GS) – Goldman Sachs strategists raised forecasts for Japanese stocks, anticipating that the yen will not strengthen significantly. They forecast profit growth in the Topix index at 12% this fiscal year and 8% and 7% in subsequent years. They also claim that strong fundamentals and structural changes in Japan will drive the market through 2023. Optimism is bolstered by strong earnings and value stocks outperforming highly valued ones.

Wells Fargo  (NYSE:WFC) – Carrie Tolstedt, former head of Wells Fargo retail banking, received three years probation, six months of home confinement and a $100,000 fine in connection with the fake accounts scandal. She admitted obstructing an investigation into misconduct at the bank. Wells Fargo paid $3 billion in 2020 for inappropriate sales practices. Tolstedt also accepted an industry ban and paid $20 million in fines.

SVB Financial Group  (NASDAQ:SIVB) – SVB Financial Group plans to sell SVB Capital to avoid bankruptcy, as reported by the Wall Street Journal. SkyBridge Capital, Atlas Merchant Capital and Vector Capital are competing for the business.

KKR and Company  (NYSE:KKR) – KKR will acquire 20% of SingTel’s regional data center business for $806.87 million, valuing it at $4.03 billion. The funds will assist in the expansion of data centers in Southeast Asia. KKR’s David Luboff highlighted the importance of robust digital infrastructure for the region. The Southeast Asian data center market is expected to grow 17% over the next five years. The transaction will close by the fourth quarter of 2023.

Nexstar  (NASDAQ:NXST) – DirecTV and Nexstar have agreed to temporarily restore signals from Nexstar and NewsNation stations. In July, DirecTV had removed these signals due to distribution agreement disagreements, affecting several major US markets.

Valero Energy  (NYSE:VLO) – Refinery Valero Energy approved a share buyback of up to $2.5 billion, supplementing the $2.5 billion authorized in February, with no set deadline for completion.

GameStop  (NYSE:GME)Foot Locker  (NYSE:FL),  Five Below  (NASDAQ:FIVE)Dick’s Sporting Goods   (NYSE:DKS) – After declines in retailer stocks, insiders are buying. Shares of GameStop, Foot Locker, Five Below and Dick’s have fallen this year. Directors of GameStop, CEO of Foot Locker, CEO of Five Below and vice president of Dick’s recently acquired shares.