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Friday’s Wall Street Highlights: News Corp, Activision Blizzard, Scholastic, AstraZeneca, Alibaba, and more

Fernanda T
Latest News
September 22 2023 03:29AM

US index futures are appreciating in this Friday’s pre-market, awaiting the release of activity data in the country. However, the market is poised to conclude the week with notable declines, reacting to signals from central banks that interest rates will persistently stay elevated to curb inflation.

At 7:00 am, Dow Jones futures (DOWI:DJI) increased by 30 points, or 0.08%. S&P 500 futures ascended 0.21%, and Nasdaq-100 futures went up 0.42%. The yield on the 10-year Treasury note was at 4.486%.

In commodities, West Texas Intermediate crude for November advanced 1.14% to $90.65 per barrel. Brent oil for November elevated 0.92%, nearing US$94.13 per barrel. The iron ore with a 62% concentration grade rose 0.87%, quoted at US$119.36 per ton.

On Friday’s U.S. economic schedule, investors are anticipating September’s composite, industrial, and services PMIs from S&P Global at 9:45 am, likely indicating a contracting economy due to sustained inflation, deterring investments in these sectors. At 1 pm, Baker Hughes will publish the weekly oil rig count.

In Europe, investors are assessing a series of data from the United Kingdom and Germany, validating the Bank of England’s (BoE) stance to maintain interest rates at 5.25%, against market anticipations of a 25 basis point rise.

In the UK, retail sales in August rose 0.40% monthly, below the 0.50% consensus. S&P Global’s composite, industrial, and services PMIs for the last month recorded 46.8, 44.2, and 47.2 points respectively, all beneath the projections and the 50-point threshold distinguishing between activity expansion and contraction.

In Germany, the PMIs, measured by the Hamburg Commercial Bank (HCOB), demonstrated mixed outcomes relative to projections, registering 46.2, 39.8, and 49.8 points in September, respectively.

A statement from the European Central Bank’s (ECB) vice president, Luis de Guindos, is anticipated.

In Asia, markets concluded mixed, affected by Chinese incentives for foreigners and the Bank of Japan’s (BoJ) resolution to maintain negative interest rates at 0.1% and the local 10-year government bond yield target at zero. The BoJ stressed that amid significant global economic uncertainties, it will continue its prudent policy, adapting responsively to alterations in prices and financial circumstances.

In China, the markets ended a three-day losing streak after Shanghai permitted foreign investors to transfer resources unrestrictedly and swiftly. The Chinese government also vowed to ease the capital flows from foreign firms.

At Thursday’s close, stock values have receded, while, concurrently, there has been an increase in the yields of Treasuries and in the valuation of the dollar. Dow Jones fell 370.46 points or 1.08% to 34,070.42 points. S&P 500 fell 72.20 points or 1.64% to 4,330.00. Nasdaq fell 245.14 points or 1.82% to 13,223.98 points. 

This scenario occurred in response to a labor market report that supported the Federal Reserve’s stance to maintain high-interest rates. The long-term yields in the United States, particularly the 10-year rates, reached levels not seen since 2007, demonstrating renewed confidence in the economy.

Economically speaking, applications for unemployment benefits in the US have reduced, reaching their lowest level since January, signaling a robust job market. However, the real estate sector has shown signs of weakness, with a decline in the numbers of property sales due to scarce supply and rising mortgage rates.

Wall Street Corporate Highlights for Today

Apple  (NASDAQ:AAPL) – At the launch of the iPhone 15 in Shanghai, more than a hundred consumers were waiting at Apple’s main store. Despite concerns about government restrictions and competition from Huawei, demand was robust, with premium models selling out quickly online. Some consumers, however, lamented the lack of significant innovations in the new model.

Alphabet  (NASDAQ:GOOGL)Broadcom  (NASDAQ:AVGO) – Google has denied plans to abandon Broadcom as a supplier of artificial intelligence chips, contrary to media reports. Despite rumors of replacing Broadcom with Marvell Technology  (NASDAQ:MRVL) due to price disputes, Google said it values ​​the collaboration with Broadcom, which remains a significant partner. Meanwhile, it continues to expand investments in AI to compete with Microsoft.

Microsoft  (NASDAQ:MSFT) – Microsoft announced a “unified” AI, Copilot, for Windows 11 and four new Surface devices. Copilot will be available on November 1, integrating with numerous apps and services, including Bing and Microsoft 365, intensifying AI competition with giants like Alphabet and Apple.

Activision Blizzard   (NASDAQ:ATVI) – The restructuring of Microsoft’s (NASDAQ:MSFT) $69 billion acquisition of Activision Blizzard has received preliminary approval from the British regulator, which previously blocked the deal due to antitrust concerns. The sale of Activision’s streaming rights to Ubisoft has assuaged concerns, although additional solutions have been proposed to address residual issues. Final approval is still pending following subsequent consultation.

Cisco Systems  (NASDAQ:CSCO)Splunk  (NASDAQ:SPLK) – Cisco Systems acquired cybersecurity company Splunk for approximately $28 billion, aiming to strengthen its software sector and capitalize on artificial intelligence. This is Cisco’s largest deal, marking a strategy to reduce dependence on networking equipment and focus more on services and software, exploiting Splunk’s capabilities in data security and observability. The deal is expected to be completed in the third quarter of 2024.

Intel  (NASDAQ:INTC) – Intel was fined US$400 million (€376.36 million) by the European Union for abusing its dominant position in the x86 chip market, following the annulment of a previous penalty of €1.06 billion. The European Commission reimposed the fine alleging anti-competitive practices by Intel, aimed at excluding competitors. Even with errors highlighted in previous decisions, the court confirmed Intel’s abusive conduct under EU competition rules.

AXT Inc  (NASDAQ:AXTI) – Semiconductor wafer maker AXT Inc said subsidiary Beijing Tongmei has obtained initial licenses to export gallium arsenide and germanium substrates from China, essential for chips. This development comes amid rising tensions and tight controls between the US and China on the microchip trade.

Oracle  (NYSE:ORCL) – On Thursday, in a meeting with analysts in Las Vegas, Oracle reaffirmed its revenue target of US$65 billion for 2026, even after forecasts below Wall Street’s consensus for the current quarter.

News Corp   (NASDAQ:NWSA),  Fox Corp  (NASDAQ:FOX) – Lachlan Murdoch has been named chairman of News Corp and will maintain his role as president and chief executive at Fox Corp. The son of Rupert Murdoch, he now leads important media brands, temporarily resolving succession issues in the media empire. Lachlan has a deep background in family media companies and represents a significant figure in the global media landscape.

Warner Bros Discovery  (NASDAQ:WBD) – Warner Bros Discovery plans to expand its Leavesden studios by 50%, adding 10 sound stages, creating around 4,000 jobs. The investment of US$301 million will increase annual production to US$737.6 million. The works, starting in 2024, will conclude in 2027.

Scholastic  (NASDAQ:SCHL) – Scholastic shares are down 19.8% in pre-market trading Friday after reporting a larger-than-expected second-quarter loss and maintaining its full-year outlook. The company reported a net loss of US$74.2 million and a drop in revenue to US$228.5 million. The administration attributed the results to summer vacations and the temporality of revenue from state programs.

United Parcel Service  (NYSE:UPS) – UPS is in talks with Mexican authorities following the mandatory change of cargo flights to Felipe Angeles International Airport (AIFA), seeking to speed up imports and align operations with military standards. Francisco Ricaurte, head of UPS for Mexico and Latin America, expressed the need for understanding to adapt processes and mitigate the impacts of the hasty transfer.

Ford Motor  (NYSE:F)General Motors  (NYSE:GM)Stellantis  (NYSE:STLA) – Detroit automakers UAW face growing tensions with hourly workers union, entering final hours Friday for new labor agreements, trying to avoid an expansion of the strike. This impasse raises concerns about possible disruptive impacts on US production and the economy.

Ford Motor  (NYSE:F) – U.S. automotive safety regulators are investigating approximately 240,000 Ford EcoSport (2018-2021) vehicles due to complaints of oil pump failures. The National Highway Traffic Safety Administration has received 95 complaints about loss of vehicle propulsion.

Toyota Motor  (NYSE:TM) – Toyota plans to accelerate production of electric vehicles, aspiring to produce more than 600,000 units annually by 2025, Nikkei revealed. The company aims to sell 1.5 million electric vehicles per year by 2026, and 3.5 million by 2030.

Tesla  (NASDAQ:TSLA) – Tesla has proposed manufacturing and selling battery storage systems in India, and is in dialogue about incentives to build a factory. The focus is on the “Powerwall”, to store solar or grid energy. While there are challenges, the proposal reflects Elon Musk’s continued interest in expanding Tesla’s presence in India, encompassing electric vehicles and energy storage solutions. Additionally, more car manufacturers are seeking access to Tesla’s charging network in the US, bringing Elon Musk’s superchargers closer to becoming an industrial standard. Texas now requires compatibility with Tesla plugs to access federal funds, solidifying Tesla’s superior reliability over rival networks like CCS.

VinFast  (NASDAQ:VFS) – VinFast Auto reported a second-quarter loss of $500 million on sales of $315 million. The company has delivered more than 9,000 electric vehicles globally. Despite a strong stock market debut in August, shares are down 71.29% so far this month. VinFast, majority-owned by Vingroup, has substantial plans to invest in a manufacturing facility in North Carolina.

American Airlines  (NASDAQ:AAL) – American Airlines, after internal audits and collaboration with suppliers, identified and removed uncertified components on some aircraft. This issue, also reported by other airlines, comes after the discovery that AOG Technics sold unapproved parts for GE engines. The FAA and the European Union Aviation Safety Agency are investigating, and legal action is underway against AOG for unauthorized practices and falsifying airworthiness approvals.

Ryanair  (NASDAQ:RYAAY) – Ryanair will reduce 17 routes in Dublin, relocating 19 Boeing 737 MAX planes to airports with green flight incentives. The decision, prompted by fee increases and a lack of environmental incentives in Dublin, will see planes flown to Spain, Italy and Luton, UK.

Chevron  (NYSE:CVX) – Australian union alliance and Chevron have reached an agreement, suspending strikes on liquefied natural gas projects, which threatened 7% of global supply. The agreement, which follows proposals from an arbitrator over pay and conditions, ends disputes that have driven up gas prices by 35%. The final terms are being drafted, aiming to improve salaries and working conditions.

TotalEnergies  (NYSE:TTE) – TotalEnergies SE plans to sell its remaining stake in North Sea gas fields in the Greater Laggan region, following the trend of oil majors leaving the area. The decision comes after selling 20% ​​of its stake to Kistos Plc for US$125 million last year. The sale signals continued interest from smaller, newer companies in assets in the region.

Magellan Midstream Partners  (NYSE:MMP)Oneok  (NYSE:OKE) – Shareholders of Magellan Midstream Partners approved the $18.8 billion sale to ONEOK despite concerns about executive compensation. Approximately 96% of votes were in favor of the transaction, but opposed the directors’ remuneration associated with the deal.

NextEra Energy  (NYSE:NEE) – NextEra Energy’s $5.4 billion retirement plan suffered significant losses, exposing 401(k) policy risks with a high concentration in proprietary shares. Nearly 50% of this plan’s investments are in company stock, contrasting with the standard practice of diversification, and placing employees at considerable financial risk, as evidenced by recent declines in the company’s stock value, substantially affecting employee retirement balances.

Constellation Energy  (NASDAQ:CEG) – Joe Dominguez, CEO of Constellation Energy, emphasized in an interview with CNBC the reliability of nuclear energy. He highlighted its importance for decarbonization and its ability to fill gaps in solar and wind energy. Constellation claims to be a leader in clean energy, aiming to surpass renewable energy certificates, ensuring a continuous supply of renewable energy to companies.

US Steel  (NYSE:X) – Canadian steelmaker Stelco Holdings  (USOTC:STZHF) seeks to make an offer for US Steel Corp to expand its portfolio and participation in the automotive market, increasing the number of interested parties in the American company.

Faraday Future Intelligent Electric  (NASDAQ:FFIE) – On Thursday, Faraday Future Intelligent Electric named Matthias Aydt as its new global CEO effective September 29. Aydt, a company veteran, will focus on increasing production and generating revenue as the company faces liquidity and governance crises, as well as delivery delays and shareholding disputes.

AstraZeneca  (NASDAQ:AZN) – AstraZeneca shares rose 2.8% in pre-market trading on Friday after the company, in collaboration with Daiichi Sankyo, announced that it had achieved extremely positive results in trials of its drug Dato -DXd, intended for the treatment of breast cancer. In other news, Bloomberg reported on Thursday that Elmarie Bodes, a former director at AstraZeneca, has sued the company, alleging it refused to pay her $125,000 in bonuses because she worked remotely. Bodes asserts that retroactively modifying bonus criteria, without prior notice, constitutes a breach of contract and transgression of local law.

Alibaba  (NYSE:BABA)  (NASDAQ:JD) – In Friday’s pre-market, Alibaba’s American depositary receipts were up 4.7%, while posted a gain of 4.7%. A Bloomberg report says that China is considering easing rules that restrict foreign ownership of local listed companies. In addition, Cainiao Network Technology, Alibaba’s logistics sector, plans to hold its initial public offering in Hong Kong, potentially raising at least US$1 billion, according to sources. The initiative is part of Alibaba’s strategy of listing its units separately.

Wayfair  (NYSE:W) – Wayfair was up 2.7% in Friday pre-market trading to $62.19 after the online furniture merchant’s stock was upgraded from Underperform to Market Perform by Bernstein, with the price target being adjusted from $60 to $65.

HSBC  (NYSE:HSBC) – HSBC raised its forecast for 10-year U.S. Treasury yields to 3.5%, anticipating that the Federal Reserve will raise interest rates to combat inflation as the economy continues to expand. Despite the Fed’s aggressive stance, some predict rate cuts by global central banks next year.

JPMorgan Chase  (NYSE:JPM) – A judge upheld a $1.4 million arbitration award against JPMorgan in favor of Dustin Luckett, a former consultant, for alleged defamation. Luckett, who was fired in 2017, claimed that the reason given by the bank for his dismissal harmed his future employment opportunities. The decision comes after the bank tried to annul the arbitration award, alleging excessive authority by the arbitration panel.