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Monday’s Wall Street Highlights: US Steel, Tesla, Nikola, AMC Entertainment, and more

Fernanda T
Latest News
August 14 2023 03:15AM

US index futures are up in premarket trading on Monday, signaling a recovery after the previous week’s falls, which were influenced by fears related to inflation and interest rates in the global scenario.

By 6:47 AM, Dow Jones futures (DOWI:DJI) were up 88 points, or 0.25%. S&P 500 futures were up 0.29% and Nasdaq-100 futures were up 0.44%. The 10-year Treasury yield was at 4.148%.

On Monday’s American economic agenda, investors will follow the speech by US Treasury Secretary Janet Yellen at 5 pm, which may address inflationary risks.

In Germany, there was a retraction of 0.20% in the wholesale price index in July, compared to the previous year, maintaining last month’s trend. On an annual basis, the indicator fell by 2.8% in July, slightly lower than in June, indicating an improvement in the year-on-year comparison.

In the Asian scenario, the markets started the week in a low mood, reflecting the latest Chinese economic data and the growing concern about the Country Garden construction company. The latter announced a pause in the trading of eleven domestic titles.

Additionally, the Japanese yen fell below the 145 to the dollar mark for the first time since November 2022. This raises the possibility of an intervention by the Bank of Japan, as the currency has lost strength against the dollar since July.

In the commodities market, West Texas Intermediate crude for September fell -0.43% at $82.83 a barrel. Brent crude for October fell 0.40% near $86.46 a barrel. Iron ore futures traded in Dalian, China, fell 0.41% to $99.65 a tonne.

At Friday’s close, the Dow rose 0.30% to 35,281.40 points. The S&P 500 fell 0.11% to a one-month closing low of 4,464.05 points. The Nasdaq Composite fell 93.14 points or 0.56% to 13,644.85 points, also ending the session at its lowest closing level in more than a month.

The two main factors that moved the markets were loans in China, which fell sharply in July, and the US producer inflation index (PPI), which increased more than expected. The inflation rate increased by 0.3% from the previous month, beating the market forecast of 0.2%. This increase was also reflected in the core inflation, which rose 0.3%, surprising compared to the expectation of 0.2%. In addition, the University of Michigan consumer confidence index showed two contradictory trends: a decrease in inflation expectations and, at the same time, a deterioration in optimism regarding economic activity. This mixed data resulted in increased volatility throughout the day across markets, but cautious investor sentiment towards risk remained unaffected.

Ahead of Monday’s corporate results, traders await reports from Hut 8 (NASDAQ:HUT), Jinko Solar (NYSE:JKS), Embraer (NYSE:ERJ), (NASDAQ:MNDY), Li-Cycle (NYSE:LICY), Rockwell Medical (NASDAQ:RMTI), before market opening. After the closing, the results of Suncor Energy (NYSE:SU), Canoo (NASDAQ:GOEV), Navitas (NASDAQ:NVTS), Rumble (NASDAQ:RUM), Getty Images (NYSE:GETY), among others, will be released.

Wall Street Corporate Highlights for Today

Apple  (NASDAQ:AAPL)Foxconn  (USOTC:FXCOF) – Foxconn, which manufactures Apple’s iPhones, reported a slight drop in second-quarter earnings, but beating expectations. Despite a 14% decline in revenue and narrowing margins, the stock rallied on better-than-expected results. The company projected improvement in the performance of its consumer electronics division in the third quarter, although it may still not reach the level of last year. Apple shares were up 0.46% in premarket trading on Monday.

Okta  (NASDAQ:OKTA) – Okta stock was up 4.2% in premarket trading on Monday to hit $74.38 after receiving a rating upgrade to “Buy” from “Sell” by Goldman Sachs, which also raised the price target to $91 from $77.

United States Steel  (NYSE:X) – United States Steel announced a formal review to evaluate strategic options after receiving unsolicited bids for parts or all of its businesses. The review comes after several offers and involves financial and legal advisors. Rival Cleveland-Cliffs  (NYSE:CLF) also made an offer, dismissed by the US Steel board as “unreasonable”. US Steel, facing higher costs, has seen strong demand for its products and plans to buy back shares.

Chevron  (NYSE:CVX) – The Australian labor regulator has opened up the possibility of a strike at Chevron’s Wheatstone platform, should workers vote in favour. This raises concerns about disruptions to the country’s exports.

Southwest Airlines  (NYSE:LUV)Boeing  (NYSE:BA) – The US FAA and National Transportation Safety Board are investigating a near collision between a Southwest Airlines Boeing 737 and a Cessna Citation 560X jet in San Diego. The incident is part of a troubling series of events in American aviation. The FAA reported that the Cessna was cleared to land while the Boeing taxied. The surveillance system alerted and the FAA will send a team to investigate. Southwest is cooperating with the review.

Ford Motor  (NYSE:F) – Ford’s Brazilian unit signed a transfer agreement with the government of Bahia to transfer the factory complex closed since 2021. The agreement includes financial compensation compatible with the market, without disclosing amounts. Electric vehicle manufacturer BYD  (USOTC:BYDDY) has expressed interest in the complex and is in negotiations with the government of Bahia. BYD is planning investments in Camaçari, but it is unclear whether it involves the Ford area.

Nikola  (NASDAQ:NKLA) – Nikola is recalling and suspending sales of its electric trucks after battery coolant leaks cause fires. With 209 vehicles affected, the company contacted those involved and seeks to resolve the problem. The change comes after thermal incident and supply challenges and security measures were requested from customers. The company focuses on hydrogen fuel cell trucks after supply challenges.

Tesla  (NASDAQ:TSLA) – Tesla reduced prices on its Long Range and Performance versions of the Model Y in China effective Aug. 14, according to a company statement on Monday. Starting prices for both models have been cut by $1,934.58, with the Model Y Long Range down 4.5% and the Model Y Performance price down 3.8%. Tesla also announced insurance subsidies for buyers of the rear-wheel drive Model 3 between August 14 and September 30 in China.

General Motors  (NYSE:GM) – GM received a rating upgrade to “Outperform” by RBC Capital, at a price target of $36.84. Analysts believe GM should benefit from the Inflation Reduction Act credits and reduce battery costs in the long run.

Stellantis  (NYSE:STLA) – Chrysler parent Stellantis sharply criticized the demands of the United Auto Workers (UAW) union on Friday, stressing the need for economic realism. Stellantis director of operations in North America, Mark Stewart, said they are looking for a deal based on reality. The UAW is seeking bold improvements, including pay increases and pension restoration. Current negotiations are aimed at improving efficiency and reducing fixed costs.

Yellow Corp  (NASDAQ:YELL) – Former customers of the defunct Yellow Corp trucking company could face rate increases of 10% to 20%, compared to pre-closure levels after nearly a century of operation. Yellow had rates 10%-20% below rivals. Rivals now benefit and increases may persist due to lesser competition.

Mastercard  (NYSE:MA) – MTN Group  (USOTC:MTNOY), Africa’s largest wireless operator, announced that Mastercard will acquire a minority stake in its financial technology business, valued at $5.2 billion. The agreement encompasses a commercial payment and remittance arrangement and the investment in the minority interest. This reflects the growing adoption of mobile financial services in Africa, opening up opportunities in the fintech sector.

UBS  (NYSE:UBS) – Retail investors who faced losses from UBS’ March acquisition of Credit Suisse are expected to file a lawsuit contesting the deal, the Financial Times revealed on Sunday. The Swiss Investor Protection Association will represent around 500 investors in Zurich’s commercial court, filing the case on Monday.

Citigroup  (NYSE:C) – Citigroup US has finalized the sale and transfer of its consumer businesses in Taiwan to DBS Group (USOTC:DBSDY) of Singapore, as announced on Monday. The transfer includes retail banking, credit cards, mortgages, unsecured loans and approximately 3,000 employees, freeing up $1.2 billion in capital. Citi’s institutional business in Taiwan was not affected. Citi intends to exit consumer banks in 14 global markets.

Goldman Sachs  (NYSE:GS) – David Solomon, leader of Goldman Sachs, has faced pressure for his role at the company, but a controversial interaction with university students in his role as chairman has caught the eye. A group of Hamilton College students accused Solomon of ignorance and disrespect after a conversation about the school’s investments in fossil fuels. Students claimed that Solomon indicated that he did more for climate change in a week than they would in a lifetime, referring to his wealth and position. The episode reflects growing tensions over Solomon’s management style and the backlash to his ESG approach.

Fox Corp  (NASDAQ:FOX) – Fox said Chief Legal Officer Viet Dinh is leaving following the $787.5 million deal with Dominion Voting Systems in April related to election coverage. Dinh led legal divisions during the process. Host Tucker Carlson also split in April. Dinh will receive $23 million and will continue as a special adviser.

WeWork  (NYSE:WE),  Amyris  (NASDAQ:AMRS),  Proterra  (NASDAQ:PTRA) – WeWork, formerly valued at $47 billion, now facing financial difficulties, along with Amyris and Proterra, has attracted speculative bets from retailers. Its three-cent shares rose between 40% and 120% after hitting record lows. Amyris has filed for bankruptcy, Proterra has filed for Chapter 11 bankruptcy, and WeWork has warned of the possibility of bankruptcy. Volatility attracts investors, online trading and Reddit forums influencing decisions.

Wayfair  (NYSE:W) – Wayfair has been upgraded from “Neutral” to “Buy” by UBS, with a price target of $83.09, citing the degree of positive profit the company is likely to generate in the coming periods.

Dell Technologies  (NYSE:DELL) – The Federal Court of Australia on Monday ordered Dell to pay a fine of $6.46 million for misleading representations about discounts for computer monitors on its website. Dell Australia sold more than 5,300 monitors at steep discounts, leading to significant penalties and refunds for affected customers.

Wynn Resorts  (NASDAQ:WYNN) – Wynn Resorts is terminating its online sports betting and iGaming operations, WynnBET, in several US states due to a lack of clear regulation and high customer acquisition costs. The company will cease operations in several states, including Arizona, Colorado and West Virginia, citing regulatory challenges and marketing costs. Operations in Nevada and Massachusetts will remain, while New York and Michigan are under review.

YouGov  (LSE:YOU) – Britain’s YouGov is considering listing in its “natural” market in the United States following an acquisition that doubled its size, non-executive chairman Stephan Shakespeare told the Financial Times. . The company may change its primary or secondary US listing after acquiring GfK’s consumer panel business for $342 million. However, YouGov stated that it has not made a final decision on the US listing in the near term.

AMC Entertainment  (NYSE:AMC) – AMC stock plunged 27.2% in premarket trading on Monday following approval for the planned conversion of AMC Preferred Equity Units (APE) into common stock, while APE units rallied 30%. AMC seeks to convert preferred stock units into common stock and perform a 10-to-1 reverse split for fundraising.

McDonald’s  (NYSE:MCD) – McDonald’s has quietly removed the term “ESG” from parts of its website, amid criticism from conservative US politicians of environmental, social and governance initiatives. The fast-food “Purpose & Impact” page removed mentions of ESG, and is now called “Our Approach & Progress”. The network did not comment, but affirmed its ongoing commitment to annual reporting of social and environmental targets.

Sony  (NYSE:SONY) – Six major record labels, including Sony Music Entertainment, have filed a lawsuit against the Internet Archive, accusing the non-profit organization of posting thousands of old songs and recordings online without permission. The lawsuit alleges that this amounts to large-scale theft of copyrighted music and lists a number of infringing recordings. The labels are seeking removal of the recordings and damages of up to $150,000 for infringed work, totaling $372 million. The Internet Archive maintains a vast digital collection of music and other media.