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Friday’s Wall Street Highlights: Applied Materials, Farfetch, Bloomin’ Brands, and More

Fernanda T
Latest News
August 18 2023 03:32AM

US Index Futures are lower in premarket trading on Friday, weighed down by economic uncertainty, particularly in China, after major developer Evergrande filed for creditor protection in the U.S.

By 6:45, Dow Jones futures (DOWI:DJI) were down 53 points, or 0.15%. S&P 500 futures were down 0.23% and Nasdaq-100 futures were down 0.43%. The 10-year Treasury yield was at 4.221%.

In the American economic agenda for Friday, investors will follow, at 1 pm, the number of oil probes for the week by Baker Hughes.

In the UK, July retail sales declined by 1.20% from the previous month, beating expectations for a 0.50% decline. More notable was the 1.40% decline in monthly core data, beating the forecast for a 0.7% retraction.

In the euro zone, July inflation retreated 0.10% monthly, in line with expectations. Annually, inflation in the region is at 5.30%. These figures reinforce inflationary pressure and the possible need for measures by the European Central Bank (ECB). The ECB’s chief economist, Philip Lane, mentioned that although inflation is high, reduced energy prices could balance the situation in the future.

In Asia, concerns over Japanese inflation and Evergrande’s filing for bankruptcy protection in the US led markets to close lower. In Japan, monthly inflation for July increased by 0.40%. Annually, it is at 3.30%, beating expectations of 2.5%. The annual core inflation, often considered in forecasts, was 3.1% in July, in line with projections.

Evergrande recently sought protection from creditors in the US, using Chapter 15 of the Bankruptcy Code, seeking to safeguard its assets. Previously, it had already postponed debt meetings to give holders more time to evaluate a restructuring plan.

Additionally, the PBoC, China’s central bank, pegged the onshore yuan at 7.2006 against the dollar today. This rate serves as a daily reference, with fluctuations limited to 2% in both directions.

In commodities markets, West Texas Intermediate crude for September fell 0.04% to trade at $80.36 a barrel. Brent crude for October fell 0.17% near $83.98 a barrel. Iron ore futures traded in Dalian, China, rose 2.94% to $105.45 a tonne.

At the close of Thursday, US market had another bearish day, influenced by the growth of Treasury yields. The S&P 500 and Nasdaq 100 ended near their lowest points, mainly affected by the performance of large technology companies. The Dow closed down 290.91 points or 0.84% ​​to 34,474.83 points. The S&P 500 dropped 33.97 points or 0.77% to settle at 4,370.36 points, while the Nasdaq Composite fell 157.70 points or 1.17% to 13,316.93 points.

Most traders expect rates to hold at the next FOMC meeting, but after the minutes released yesterday, expectations of a hike gained steam. Yields on US bonds reached the highest level since 2007 on concerns about inflation and US government debt.

Ahead of Friday’s corporate results, traders are watching reports from Deere (NYSE:DE), Xpeng (NYSE:XPEV), Estée Lauder (NYSE:EL), Madison Square Garden Sports Corp (NYSE:MSGS), Palo Alto Networks (NASDAQ:PANW) and more.

Wall Street Corporate Highlights for Today

Streaming – The Writers Guild of America (WGA) alleges that Disney  (NYSE:DIS)Amazon  (NASDAQ:AMZN) and Netflix  (NASDAQ:NFLX) wield excessive power in streaming and calls for more regulation. They argue that these companies hurt competitors, raise prices and lower wages. The Federal Trade Commission has expressed similar concerns. The WGA is on strike calling for better compensation and protections.

Microsoft  (NASDAQ:MSFT) – Microsoft will close the Xbox 360 online store and marketplace on July 29, 2024, focusing on newer consoles and Game Pass. Users can still play titles already purchased for the Xbox 360.

Amazon  (NASDAQ:AMZN) – Amazon, trying to leverage its TikTok-like feed, offered $25 per video to influencers. The offer was ridiculed on social media. The initiative aims to leverage “Inspire”, a feed that presents products. As TikTok expands e-commerce, Amazon faces challenges in competing with TikTok content. Influencers like Jazmine Flores highlight the effort it takes to create quality content.

Berkshire Hathaway  (NYSE:BRK.A) – Warren Buffett donated $27 million worth of Berkshire Hathaway stock to an unnamed charity. This gesture is part of the billionaire’s pledge to give away his fortune. His shares in Berkshire represent about 15% of the company.

Goldman Sachs  (NYSE:GS) – Goldman Sachs is hiring hundreds of employees due to increased regulatory scrutiny in the US, according to Bloomberg. The bank has not officially commented on the situation.

Citigroup  (NYSE:C) – Citibank was subpoenaed by the US House Judiciary Committee, chaired by Jim Jordan, regarding alleged sharing of financial data with the FBI. The investigation focuses on the sharing of information related to the events of January 6, 2021 in the Capitol.

Nomura Holdings  (NYSE:NMR) – Nomura lowered its China growth estimate to 4.6% due to disappointing July data and a slumping economy. The previous forecast was 5.1%.

Barclays  (NYSE:BCS) – Barclays has revamped its leadership in India, appointing Pramod Kumar as CEO, replacing the retired Ram Gopal. India is a key market for Barclays, with its business in the country growing considerably over the last 10 years, outpacing other Asian markets. The team will face increased competition and challenges associated with significant clients such as the Adani Group.

Ralph Lauren  (NYSE:RL) – Patrice Louvet, CEO of Ralph Lauren, is navigating modern fashion shifts, including accepting hoodies at the office and embodying the metaverse. It emphasizes the importance of sustainability in attracting young consumers and talent, and values ​​leaders with authenticity and consumer understanding.

Hershey  (NYSE:HSY)Mondelez International  (NASDAQ:MDLZ) – Chocolate companies such as Hershey and Mondelez are facing challenges with rising cocoa costs as consumers reduce consumption due to rising prices. Inflation in the sector worries, while more affordable brands gain space.

Bloomin’ Brands  (NASDAQ:BLMN) – Shares in Bloomin’ Brands are up more than 6% in premarket trading on Friday after the Wall Street Journal reported that activist investor Starboard Value acquired more than 5% of the company, which owns from Outback Steakhouse. It’s unclear what Starboard’s intentions are.

Chegg  (NYSE:CHGG) – Education software company Chegg announced on Thursday a $200 million increase in its share repurchase program, bringing the total to $289 million. Despite facing competition from AI chatbots, Chegg is adapting its software tools to technology.

Yellow Corp  (NASDAQ:YELL) – Estes Express offered $1.3 billion for the shipping hubs of bankrupt Yellow Corp. Despite the offer including a bankruptcy loan, Yellow opted for a $142.5 million financing from Citadel and MFN Partners. Yellow’s debt includes a 2020 pandemic loan to the US Treasury.

Tesla  (NASDAQ:TSLA) – Australian company Core Lithium  (ASX:CXO) has not finalized a planned supply agreement with Tesla by the October 26, 2022 deadline. In response, Tesla threatens to use “all available legal remedies” . The agreement under discussion related to the supply of spodumene, an essential mineral for electric vehicle batteries.

Ford Motor  (NYSE:F) – A consortium, led by Ford and South Korean companies, will invest $887 million in a plant in Becancour, Quebec, to produce materials for electric vehicle batteries. With financial support from the Canadian and Quebec governments, the plant will produce 45,000 tons of cathode materials annually. The facility, to be completed in 2026, will strengthen Becancour as a hub in the North American EV supply chain.

Stellantis  (NYSE:STLA) – Stellantis will invest more than $100 million in Controlled Thermal Resources to extract lithium amid growing demand for electric vehicle batteries. DLE technology allows for sustainable extraction without extensive mining. The deal will also increase Stellantis’ lithium purchases to 65,000 tonnes annually from 2027.

US Steel  (NYSE:X) – US Steel has stated that the United Steel Workers (USW) union has no right to veto a sale of the company. This statement came after the USW endorsed Cleveland-Cliffs Inc as a potential buyer. US Steel is evaluating several bids, including one from Esmark Inc and ArcelorMittal SA (MTCN).

CVS Health  (NYSE:CVS) – Blue Shield of California announced Thursday that it will discontinue most of its services with CVS Health, aiming to work with Amazon (AMZN) and drugmaker Mark Cuban to cut drug costs . This move estimates savings of $500 million annually starting in 2025.

Dolby Laboratories  (NYSE:DLB) – Dolby Laboratories will replace Staar Surgical in the S&P MidCap 400. Staar, in turn, will replace Urstadt Biddle in the S&P SmallCap 600 on Aug. 22, due to the acquisition of the latter by Regency Centers Corp.


Applied Materials   (NASDAQ:AMAT) – Applied Materials forecast fourth-quarter profit above expectations due to increased demand for chips and government subsidies. The company reported earnings of $1.90 a share on revenue of $6.43 billion that beat estimates in the third quarter. Governments globally have earmarked billions for domestic semiconductor production, benefiting the company.

Walmart   (NYSE:WMT) – Walmart raised its full-year guidance after outperforming second-quarter sales and earnings on Thursday, buoyed by demand for groceries and health products. US sales grew 6.4%, and the company highlighted strong consumption at seasonal events. Walmart expects fiscal 2024 earnings to be in the range of $6.36 to $6.46 per share, up from its previous forecast of $6.10 to $6.20.

Keysight Technologies  (NYSE:KEYS) – Test equipment maker Keysight Technologies projected fourth-quarter earnings below expectations, leading to a drop of about 11.2% in its premarket stock. The company anticipates earnings of between $1.83 and $1.89 per share on revenue of between $1.29 billion and $1.31 billion, while analysts were projecting $2 per share and $1.39 billion in revenue.

Farfetch  (NYSE:FTCH) – Shares in Farfetch fell about 37.4% premarket after reporting lower-than-expected quarterly sales and a loss of $281 million, or $0.68 per share. Revenue was US$ 572 million, against US$ 650 million forecast. José Neves, CEO, highlighted the company’s adaptation to the recent macroeconomic environment.

Bill Holdings  (NYSE:BILL) – Bill Holdings, maker of software to help small businesses with payments, forecast revenue of $1.29 billion for 2024, below analyst expectations of $1.31 billion.

Ross Stores  (NASDAQ:ROST) – Ross Stores stock rose more than 5% premarket after beating Q2 expectations and updated forecast, attributing this to budget-conscious customers. Ross reported earnings of $446 million and sales of $4.9 billion. The company updated its annual forecast despite ongoing concerns about inflation.