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Wednesday’s Wall Street Highlights: Amazon, Costco, Sirius XM, Electronic Arts, Peloton, and more

Fernanda T
Latest News
September 27 2023 7:28AM

US Index Futures are trending upward on Wednesday, reflecting the possibility of new stimuli in China and a temporary agreement to maintain U.S. government funding, with Wall Street aiming to recover from significant declines in the previous session.

As of 06:55, Dow Jones futures (DOWI:DJI) rose 88 points, or 0.26%. S&P 500 futures increased by 0.35%, and Nasdaq-100 futures were up by 0.34%. The yield on 10-year Treasury bonds was at 4.509%.

In the commodities market, West Texas Intermediate crude oil for November rose 1.58%, to $91.82 per barrel. November Brent oil increased 1.25%, nearing $95.13 per barrel. Iron ore with a 62% concentration level rose 0.59%, quoted at $115.72 per ton.

On Tuesday, Senate leaders, both Democrats and Republicans, agreed on a plan to avert government shutdown until mid-November and to provide $6 billion in aid to Ukraine. However, to avoid the shutdown on October 1st, the existing impasse in the House still needs resolution.

On Wednesday’s U.S. economic agenda, investors are awaiting the weekly mortgage index at 7 AM, and durable goods orders at 8:30 AM. At 10:30 AM, the Department of Energy will release last week’s oil stock, which is expected to see a decline of 1.65 million barrels. Later, at 1 PM, the government will conduct another Treasury auction, this time with a five-year maturity. Yesterday, the two-year auction had a rate of 5.085%, with a volume of $48 billion.

In Germany, the GfK Index revealed that inflation is impacting economic recovery, with a drop of 26.50 points in October, surpassing the forecasted decline of 26 points. Andrea Enria, from the ECB, is scheduled to speak at 8 AM.

In Asia, relief signs were noted after a 17.2% increase in China’s industrial profit in August, compared to a 6.7% decline in July. The People’s Bank of China stated it will intensify support to the economy, responding to external challenges and decreased internal demand, with precise and robust monetary policies to encourage demand and economic confidence.

However, Evergrande is again in focus after reports that creditors may seek judicial liquidation if no new debt restructuring plan emerges by October. The company is seeking approval for a debt restructuring proposal offshore of $31.7 billion.

In Japan, Prime Minister Fumio Kishida has proposed tax incentives to stimulate investments in sectors such as semiconductors and batteries and implement strategies to boost wage growth.

At Tuesday’s close, international markets experienced a strong aversion to risk, with indices showing significant depreciation in response to disappointing data on consumer confidence and new home construction, revealing a weakening of consumption in the world’s largest economy. The Dow Jones fell 388.00 points or 1.14% to 33,618.88 points. The S&P 500 dropped 63.91 points or 1.47% to 4,273.53 points. The Nasdaq Composite plummeted 207.71 points or 1.57% to 13,063.61 points.

The reaction to this data was intensified by the expectation that interest rates will remain at elevated levels for an extended period in the U.S., a stance frequently reiterated by Federal Reserve leaders following the most recent FOMC meeting on monetary policy.

Ahead of Wednesday’s corporate earnings, investors will be watching the Paycheck (NASDAQ:PAYX) report before the market opens. After the close, results are awaited from Micron Technology (NASDAQ:MU), Jefferies Financial Group (NYSE:JEF), Concentrix (NASDAQ:CNXC), Duckhorn Portfolio (NYSE:NAPA), HB Fuller (NYSE:FUL), Worthington (NYSE:WOR), Aytu BioScience (NASDAQ:AYTU) and Sangoma Therapeutics (NASDAQ:SANG).

Wall Street Corporate Highlights for Today

Apple  (NASDAQ:AAPL) – China’s cyberspace regulator has listed the first app stores that have submitted business details under new supervision rules. Among the 26 are Tencent, Huawei and Xiaomi; Apple’s App Store is not included. These measures intensify state control, potentially affecting the availability of apps in China.

Amazon  (NASDAQ:AMZN) – The US Federal Trade Commission (FTC) has accused Amazon of antitrust practices, asking for consideration for the sale of assets of the online retail giant, valued at $1.3 trillion. The FTC alleges that Amazon inflates costs, monopolizes and harms consumers and sellers. Amazon refutes this, citing stimulation of competition and innovation. The case could have significant repercussions, highlighting growing bipartisan concerns about the power of big technology companies. States and individual consumers have also filed suit, increasing legal pressure on the retail giant.

Alphabet  (NASDAQ:GOOGL) – Judge Amit Mehta, who is overseeing the US antitrust case against Google, will allow trial documents to be published online at the end of each day. Google and others will have until 9pm to oppose the release of any exposure. This adjustment seeks to resolve public access disputes to information from the high-profile legal case, providing insider glimpses into the influential technology company, while balancing privacy concerns and sensitivity of the information presented.

OpenAI  – OpenAI, developer of ChatGPT, is in talks about a possible share sale that could value it between US$80 billion and US$90 billion, a value almost triple its previous valuation this year, according to the Wall Street Journal. The company, a pioneer in generative AI, with Microsoft (NASDAQ:MSFT) investing US$13 billion, is seeing growing revenues as companies embrace ChatGPT technology, heading towards annual revenue of $1 billion.

SAP  (NYSE:SAP) – SAP introduced Joule, a generative AI co-pilot integrated into its enterprise software products, enabling natural language queries. Available in November, Joule provides proactive, contextualized insights, increasing productivity and improving business results. It performs tasks autonomously and will be embedded in several of the company’s software offerings. SAP has not yet revealed the pricing strategy.

Vedanta  (NYSE:VEDL) – Vedanta shares hit their lowest value in more than a year after Moody’s downgraded Vedanta Resources, citing high debt restructuring risk. The decline reflects concerns about subsidiaries’ ability to generate cash flow as commodity prices decline.

Bunge  (NYSE:BG)Glencore  (LSE:GLEN) – The government of Canada is reviewing the proposed merger between Bunge and Viterra, expected to be completed by June 2, 2024, to assess the impact on competition in port terminals and access for farmers at fair prices and services. Bunge anticipates that the transaction, creating a US$34 billion giant in agricultural trade, will be completed in mid-2024.

Tesla  (NASDAQ:TSLA) – Tesla CEO Elon Musk warned that demands from the United Auto Workers for a 40% pay raise and a 32-hour work week could lead to GM (NYSE:GM), Ford (NYSE:F) and Stellantis (NYSE:STLA) into bankruptcy. Musk criticized President Biden’s support for these demands, pointing out that the increases would make cars unaffordable, decrease sales and cause bankruptcies. Tesla, which is not unionized, could benefit from this impasse involving its competitors.

Stellantis  (NYSE:STLA),  Samsung SDI  (USOTC:SSDIY) – Samsung SDI Co Ltd plans to invest US$2 billion in a second electric vehicle battery factory in the US, in partnership with Stellantis NV, running from April 2024 to November 2027 Production is expected to begin in 2027.

Fisker  (NYSE:FSR) – Shares of electric vehicle startup Fisker Inc rose on Tuesday after the company reiterated its plans to increase deliveries of the Ocean SUV and received a positive review from Wall Street. The company, focused on EVs, has already built 5,000 units and plans to ramp up deliveries to 300 per day, positioning itself advantageously in the growing EV market with a business model considered low risk.

Instacart  (NASDAQ:CART) – On Tuesday, Instacart shares closed below their IPO price for the first time, falling 1.65% to $29.89. Meanwhile, Arm Holdings  (NASDAQ:ARM) and Klaviyo  (NYSE:KVYO) have also experienced declines, with lackluster performances from both since their debuts, raising questions about the viability of future IPOs after a prolonged period of market inactivity.

TrueCar  (NASDAQ:TRUE) – TrueCar announced Oliver Foley as its new chief financial officer, succeeding Teresa Luong, effective October 30. Foley, who will report to CEO Jantoon Reigersman, leaves Flexcar LLC to join TrueCar.

JPMorgan Chase  (NYSE:JPM) – JPMorgan Chase has made leadership changes at its investment bank, naming Jay Horine as the new head of North America, succeeding Fernando Rivas. Additionally, it formed a new digital banking group, led by Samik Chandarana, focused on advanced technology.

Wells Fargo  (NYSE:WFC) – Wells Fargo is collaborating with Centerbridge Partners to create a fund capable of lending more than $5 billion to midsize U.S. companies. This fund, called Overland Advisors, reflects increased collaboration between traditional banks and private equity providers to offer credit as regulation and costs intensify, forcing banks to diversify services. The loans, intended for significant initiatives, will likely have higher interest rates compared to traditional bank debt.

Morgan Stanley  (NYSE:MS) – Guy Metcalfe, who helped build Morgan Stanley’s real estate banking segment, will retire after 33 years. Metcalfe, who served as president of the unit, participated in transactions worth over US$850 billion and excelled in corporate ownership and institutional investments, playing a vital role in several important negotiations, such as the sale of Canary Wharf Group and the exit from Morgan Stanley of Revel Casino post-2008 crisis.

Deutsche Bank AG  (NYSE:DB) – Deutsche Bank AG has appointed experienced insurance executive Dominik Hennen to lead a new division focused on personal banking services, encompassing its German retail business. Formerly of Talanx AG, Hennen will take up the role next month, reporting to Lars Stoy, and will manage the Deutsche Bank and Postbank brands, which have faced challenges following systems integration issues and customer complaints.

Coinbase  (NASDAQ:COIN) – The cryptocurrency exchange Coinbase is coordinating a significant lobbying effort today, called “Stand With Crypto Day,” aiming to build legislative support for crypto-friendly regulations. The company has mobilized crypto executives and launched a non-profit alliance, the “Stand With Crypto Alliance,” to advocate for more friendly laws, although expectations for legislative success in the short term are limited, considering the current focus of lawmakers on pressing issues such as the looming government shutdown.

AssetMark  (NYSE:AMK) – AssetMark will pay $18 million to resolve US Securities and Exchange Commission (SEC) allegations of failure to disclose conflicts of interest and payments received. Accused of benefiting financially without due transparency between 2016 and 2021, the company neither admitted nor denied the SEC’s conclusions. This agreement comes after recent changes in leadership at AssetMark, including the departure of CEO Natalie Wolfsen.

Envestnet  (NYSE:ENV) – Envestnet, a leading provider of wealth management technology, has selected former BlackRock  (NYSE:BLK) executive Joshua Warren as its new chief financial officer, replacing Peter D’Arrigo. Warren will officially take over on November 15, with D’Arrigo becoming senior advisor to CEO William Crager until March 2024. Warren seeks to strengthen the company’s market position, expand margins and deliver value. D’Arrigo had held the position of CFO since 2008.

Target  (NYSE:TGT) – Target will close nine stores in the US due to concerns about theft and organized crime, affecting the safety of employees and customers. Despite security efforts, challenges persist. The company seeks to relocate affected employees and reiterates the significant impacts of organized crime on business performance.

Dick’s Sporting Goods   (NYSE:DKS) – Dick’s Sporting Goods will hire 8,600 temporary workers for Christmas, down from last year. Other retailers have also announced conservative hiring plans, reflecting a trend toward reduced seasonal hiring in the U.S. due to rising labor costs and inflation.

United Parcel Service   (NYSE:UPS) – UPS plans to hire more than 100,000 seasonal workers for holiday 2023, similar to the previous year. This comes after the company lowered revenue targets due to unexpected labor costs and lost business during negotiations with the Teamsters union.

Costco Wholesale  (NASDAQ:COST) – Costco exceeded expectations with increases in quarterly revenue and profit. Consumers, looking for more affordable products, drove robust sales, even with weak demand for discretionary items. Membership grew 8%, and membership revenue rose 13.7%. Total revenue increased 9.5% to US$78.94 billion, and earnings per share were US$4.86, exceeding forecasts.

Rocket Lab USA  (NASDAQ:RKLB) – Following an unsuccessful launch on September 19, Rocket Lab USA has adjusted its projections for the third quarter, now expecting revenues between $66 million and $68 million, below previous expectations. Adjusted gross margin was also reduced to 26%-28%. The company is investigating the incident but does not anticipate significant additional expenses.

MillerKnoll  (NASDAQ:MLKN) – Furniture company MillerKnoll has improved its financial forecast for 2024, now anticipating adjusted earnings of between $1.85 and $2.15 per share, up from its previous forecast of $1.70 per share. Additionally, the company reported quarterly earnings and revenue that exceeded analysts’ estimates.

AAR Corp  (NYSE:AIR) – AAR Corp, a provider of aviation services to commercial and government entities, anticipates profit in the current fiscal second quarter due to expanding operating margins, as mentioned by CEO John Holmes to The Wall Street Journal. The company recently reported quarterly adjusted earnings of 78 cents per share, beating forecasts, accompanied by 23% sales growth.

Peloton Interactive  (NASDAQ:PTON) – On Tuesday, Peloton announced the appointment of Nick Caldwell as chief product officer effective November 1, succeeding co-founder Tom Cortese. Caldwell will report to CEO Barry McCarthy.

Airbnb  (NASDAQ:ABNB) – Airbnb plans to host half a million people in Paris during the 2024 Olympics and CEO Brian Chesky is encouraging more residents to list their homes to avoid price hikes. It ensures that the platform can offer affordable prices compared to hotels during the event, circumventing potential accommodation issues due to high demand and hotel space limitations.

Uber Technologies  (NYSE:UBER) – Uber is partnering with Los Angeles Yellow Cab to integrate more taxis onto its platform. The company has already entered into similar partnerships globally. The partnership will allow Uber users to book with taxis associated with LA Yellow Cab, potentially adding up to 1,200 taxis to the Uber platform, benefiting both drivers and users as the post-pandemic recovery continues.

Activision Blizzard  (NASDAQ:ATVI)Take-Two  (NASDAQ:TTWO)Electronic Arts  (NASDAQ:EA)Playtika Holding  (NASDAQ:PLTK)Microsoft Corp  (NASDAQ:MSFT) – On Tuesday, video game stocks outperformed the market after striking actors voted to expand their protest to the games industry, a sector larger than film and TV. The vote took place on Monday, with 98.3% of Screen Actors Guild members supporting a “strike authorization” in the gaming industry, affecting major companies like Activision Blizzard and Electronic Arts. The union seeks better wages, safety precautions and protections against exploitative uses of AI.

Liberty Media  (NASDAQ:LSXMA)Sirius XM Holdings  (NASDAQ:SIRI) – Liberty Media has proposed a long-awaited merger with Sirius. The proposal favors Liberty, which owns 82% of Sirius XM, but raises skepticism. Sirius XM’s current investors, who hold the remaining 18%, and the proposed share exchange structure are under scrutiny, and the offer is significantly below market value. Offer discounting is controversial, and complex and structural tax issues persist.