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Tuesday’s Wall Street Highlights: Alphabet, TSMC, Instacart, Toyota, Rackspace Technology, and more

Fernanda T
Latest News
September 19 2023 03:36AM

US index futures are slightly higher in Tuesday’s pre-market, a day before Federal Reserve’s decision on monetary policy, with interest rates forecast to remain between 5.25% and 5.50%. Meanwhile, in the euro zone, the latest reading showed more moderate inflation.

At 7:04 AM, Dow Jones futures (DOWI:DJI) rose 30 points, or 0.09%. S&P 500 futures rose 0.11% and Nasdaq-100 futures rose 0.09%. The yield on the 10-year Treasury note was at 4.319%.

In the commodities market, West Texas Intermediate crude oil for October rose 1.14% to $92.52 per barrel. Brent oil for November rose 0.59% to US$94.99 per barrel. Iron ore with a concentration of 62% fell 0.69%, quoted at US$118.12 per ton.

On Tuesday’s United States economic agenda, investors await, at 8:30 AM, data on the construction of new homes for August, while at 1 PM the government holds an auction of 20-year Treasuries. At 4:30 PM, API releases oil stocks for the week ending September 15th.

In August, the euro zone consumer price index rose 0.50%, below expectations of 0.60%. Excluding food and energy, inflation was 5.30%, as expected. Current inflation does not change the outlook that the European Central Bank (ECB) is ending monetary tightening. However, Christine Lagarde, president of the ECB, signaled possible interest rate increases.

In Asia, markets closed with mixed results, awaiting monetary decisions from the US and China. The Chinese five-year benchmark rate is set at 4.20% per year.

The Chinese real estate sector breathed a sigh of relief as Country Garden and Sunac renegotiated debts. Country obtained an extension of a US$500 million onshore bond with interest of 6.15%. In response to its challenges, the Chinese government took supportive measures, giving the company a 30-day grace period to pay off. Sunac, on the other hand, had its US$9 billion debt restructuring plan approved. However, its shares fell 7% after seeking protection from creditors in the US.

At Monday’s close, Dow Jones rose 6.06 points or 0.02% to 34,624.30 points. S&P 500 rose 3.21 points or 0.07% to 4,453.53. Nasdaq Composite rose 1.90 or 0.01% to 13,710.24 points. US stock markets had slight variations, while the price of oil approached US$95 per barrel, intensifying inflationary fears and raising Treasury yields.

This week, global central banks have important meetings, with a highlight on the Federal Reserve on Wednesday. It is expected to maintain the interest rate but indicate potential future increases. Decisions from ECB and BOJ are also expected. Fed will also present the “Dot Plot,” a chart with projections from the FOMC, further emphasizing the significance of Wednesday.

On Tuesday’s corporate earnings front, investors will be watching reports from AutoZone (NYSE:AZO), Endava (NYSE:DAVA), Apogee Enterprises (NASDAQ:APOG) and Steelcase (NYSE:SCS).

Wall Street Corporate Highlights for Today

Alphabet  (NASDAQ:GOOGL) – Google’s chatbot Bard has expanded to other services like Gmail, Google Docs, and YouTube, making it more versatile. A new feature, “Bard Extensions”, allows users to access information across various Google tools. Enhancements also include accuracy checks and conversation sharing. In other news, the U.S. Department of Justice challenged the proposal to exclude the public from discussions about Google’s ad pricing during the antitrust trial. In the federal antitrust trial, Jerry Dischler, Google’s VP of advertising products, testified that the company adjusted ad auctions to meet revenue targets, sometimes raising prices by up to 5% without notifying advertisers. The government aims to prove that Google violated antitrust law to dominate online searches, boosting its advertising revenues.

Microsoft  (NASDAQ:MSFT) – Yusuf Mehdi takes over leadership of Microsoft’s Surface and Windows businesses following the departure of Panos Panay, who may join Amazon  (NASDAQ:AMZN) to manage Alexa and Echo. Panay oversaw Surface and the launch of Windows 11 during his 20 years at Microsoft.

Amazon  (NASDAQ:AMZN) – Amazon announced “Prime Big Deals Day” for October 10 and 11, following a summer sale in July. Similar to 2022, the event will include partners of the “Buy with Prime” feature. Amazon’s online sales grew, with an estimate of US$56.7 billion for September. Responding, WalMart (NYSE:WMT) plans its own event from October 9th to 12th. Amazon shares are up 0.11% in premarket trading Tuesday.

International Business Machines  (NYSE:IBM) – IBM has committed to training 2 million people in artificial intelligence over three years, with a focus on underrepresented communities. They will offer accreditation and partnerships with universities. The initiative comes with the expectation that advances in AI will require significant requalification in the job market.

Taiwan Semiconductor Manufacturing  (NYSE:TSM) – Saxony and Taiwan Semiconductor Manufacturing Co (TSMC) are launching an exchange program for Dresden students, aiming to boost semiconductor talent. From 2024, TU Dresden will send students to study and intern in Taiwan. TSMC also plans a €10 billion factory in Germany, increasing its European presence. In other news, Arizona Governor Katie Hobbs and TSMC are discussing expanding chip packaging capacity in Arizona. Hobbs’ visit to Taiwan focuses on the country’s importance in the semiconductor chain. TSMC plans to increase investment and production in Arizona as it faces growing demands and challenges in producing advanced chips.

Micron Technology  (NASDAQ:MU) – Micron shares outperformed after Deutsche Bank’s Sidney Ho raised his recommendation due to growing demand, particularly from AI servers. He raised the price target to $85 from $65. Micron, a specialist in DRAM and NAND chips, could benefit from increased demand for AI. The company will report earnings on September 27. So far, Micron shares are up 41% this year.

Arm Holdings  (NASDAQ:ARM) – Shares of Arm Holdings closed down 4.5% on Monday at $58.00 following its recent listing. On the first day of its options trading, about 74,000 contracts were traded, mostly puts expiring in October. Bernstein rated the stock “underperform.” Arm shares are down 1.9% in premarket trading Tuesday.

DoorDash   (NYSE:DASH) – DoorDash has expanded its deliveries to include more grocery stores, adding 100,000 non-restaurant locations to its platform in North America. While DoorDash shares rose 2.7% on Monday, rival Instacart is preparing for its public offering. Experts warn of increased competition in the sector.

Instacart (CART) – Instacart priced its IPO at $30 per share, hitting the upper end of the forecast range, indicating strong investor interest. With the sale of 22 million shares, the market valuation is US$9.9 billion. Nasdaq debut will take place under the symbol CART.

Toyota  (NYSE:TM) – Toyota is intensifying its competition with Tesla  (NASDAQ:TSLA) in the EV market, combining technological innovations such as self-propelled assembly lines and gigacasting foundries with its time-honored lean production efficiency. This approach aims to optimize productivity and reduce costs.

Ford Motor  (NYSE:F)General Motors  (NYSE:GM)Stellantis  (NYSE:STLA) – The UAW union has threatened to expand strikes at US factories if there is no progress in negotiations with the three big Detroit automakers. Meanwhile, a Canadian union postponed a strike at Ford after receiving a “substantive offer.” UAW President Shawn Fain expressed frustration with the slow pace of negotiations. Unifor in Canada is seeking better terms and investment commitments from Ford, with the focus shifting to GM and Stellantis following a deal. In the US, around 12,700 workers are on strike, disputing wages and benefits.

Tesla  (NASDAQ:TSLA) – Saudi Arabia is in talks with Tesla to establish a factory in the country, while Turkey has also made a similar request. Elon Musk, CEO of Tesla, had meetings with global leaders but denied the reports. Saudi Arabia seeks to diversify its economy and is considering supporting a cobalt and copper project in Congo, aiming to supply Tesla. Musk plans to decide on a new factory location by the end of 2023.

Nio  (NYSE:NIO) – Chinese EV maker NIO announced a $1 billion convertible bond offering, similar to Nikola  (NASDAQ:NKLA) and Fisker  (NYSE:FSR). These bonds can be converted into shares, diluting existing shareholders but offering financing at lower rates.

Nikola  (NASDAQ:NKLA) – On Monday, Nikola shares rose following the appointment of Mary Chan as chief operating officer. Chan, with experience at VectoIQGM  (NYSE:GM) and Dell  (NYSE:DELL), will start on October 9. Shares rose 34% after the announcement. However, shares are down 26% year to date.

Lyft  (NASDAQ:LYFT) – Lyft will pay $10 million to resolve SEC charges over failure to disclose a director’s financial interest in a transaction. The sale involved US$424 million in shares ahead of the company’s public listing in 2019.

United Airlines  (NASDAQ:UAL) – United Airlines has identified suspicious parts in two engines from supplier AOG Technics Ltd., as have other global carriers. The parts were in a two aircraft engine. The Chicago-based company is replacing the engines and conducting additional investigations. Other companies, such as Southwest Airlines (NYSE:LUV) and Virgin Australia, have also found questionable components of AOG.

Okta  (NASDAQ:OKTA)MGM Resorts  (NYSE:MGM)Caesars Entertainment  (NASDAQ:CZR) – Hackers who compromised MGM Resorts and Caesars Entertainment casino systems also attacked three other companies in the manufacturing, retail and technology sectors. Okta’s David Bradbury confirmed that five of his clients, including casinos, were targeted by the ALPHV and Scattered Spider groups.

UBS  (NYSE:UBS) – UBS CEO Sergio Ermotti expressed optimism about the Swiss bank following its merger with Credit Suisse, bringing its assets under management to $5.5 trillion. He emphasized the advantages of economies of scale at Bank of America’s Annual Financial CEO Conference. Ermotti plans to lead the bank until 2026 and identified four countries – South Korea, India, Ireland and Saudi Arabia – as slow to obtain regulatory approval for the Credit Suisse acquisition. Delays range from 18-22 months in South Korea, up to two years in Ireland and six months in India.

Citigroup  (NYSE:C) – Investors anticipate further declines in the Nasdaq 100 technology index, according to Citigroup analysis. Despite the bearish trend, Chris Montagu indicates that the pessimistic momentum has slowed down. The Nasdaq 100 has retreated since July on concerns about higher interest rates.

Block  (NYSE:SQ) – Alyssa Henry, leader of Square’s commerce business, is leaving the company, with Jack Dorsey assuming her responsibilities. While Block is down 18% this year, other tech stocks have performed better.

BP Plc  (NYSE:BP) – Former BP CEO John Browne believes the company will quickly overcome its recent governance scandal while maintaining its current strategy. Bernard Looney resigned as CEO of BP after failing to disclose employment relationships, leading to a global search for a replacement. Browne highlighted the strength and resilience of large companies in the midst of crises.

Rio Tinto  (NYSE:RIO) – Rio Tinto alone financed the work at Simandou, a large unexplored iron ore deposit, as its Chinese partners did not release funds. The mining company invested more than US$500 million, expecting joint financing with China’s Chalco Iron Ore Holdings. Approval of Chinese financing was delayed, raising concerns about the project’s continuity.

US Steel  (NYSE:X) – US Steel released financial projections for the third quarter that exceeded expectations. However, the company’s shares are flat in pre-market trading on Tuesday. The company expects adjusted earnings of between $1.10 and $1.15 per share, surpassing analysts’ forecast of $1.01. The steel company mentioned that these projections take into account the expected effects of the United Auto Workers strike.

Newmont Corp  (NYSE:NEM)Newcrest   (USOTC:NCMGY) – Newmont Corp received authorization from Australia to acquire the mining company Newcrest for US$16.86 billion. The deal, backed by Newcrest, awaits a shareholder vote in October and approval from additional regulators, and expects closing in the fourth quarter.

Norfolk Southern Corp  (NYSE:NSC) – Norfolk Southern has proposed a plan to compensate residents of East Palestine, Ohio, whose homes depreciated in value after a toxic chemical train derailment in February. Those affected will be able to receive the difference between the market value and the sales price.

Rackspace Technology  (NASDAQ:RXT) – Rackspace Technology rose 8.8% to $1.61 after Raymond James upgraded the cloud computing company’s stock rating from “Market Perform” to “Outperform,” setting a price target of $3.50.

Novo Nordisk  (NYSE:NVO) – MarketWire reported quality control failures at a Novo Nordisk plant  in Clayton. Novo Nordisk did not comment on the report but said the factory operates normally, while MarketWire did not specify when the FDA inspection occurred.

GE HealthCare Technologies  (NASDAQ:GEHC) – GE HealthCare received $44 million from the Bill & Melinda Gates Foundation to develop AI-powered ultrasound to target maternal, fetal health and respiratory diseases. The technology, designed by Caption Health, will focus on globally accessible devices.

Moderna  (NASDAQ:MRNA) – Moderna was up 0.57% in Tuesday’s premarket, recovering from a drop of more than 9% the day before. This drop occurred after the CFO of Pfizer  (NYSE:PFE) anticipated a decrease in demand for Covid vaccines this year. On Monday, Moderna recorded the worst performance in the S&P 500.

Target  (NYSE:TGT) – Target shares fell 3% on Monday, down more than 20% this year, close to their 52-week low. Other retail stocks also fell, although for no apparent reason. While inflation has affected discretionary spending, Target has been hit by concerns such as shoplifting, controversies related to Pride Month and pressures in the food market. The company faces challenges from delivery competitors and an uncertain post-pandemic landscape.

Macy’s  (NYSE:M) – Macy’s plans to hire more than 38,000 workers for the holiday season, fewer than in previous years. A report indicates that year-end hiring in the US is at its lowest level since 2008 due to economic concerns.

Stitch Fix  (NASDAQ:SFIX) – Stitch Fix reported a 22% drop in its fiscal fourth quarter revenue, with its active customer base decreasing to 3.3 million, compared to 3.4 million in the previous quarter and 3.8 million in the same period last year. The company forecasts revenue of between US$355 million and US$365 million for the next quarter, representing a reduction of 18% to 20% compared to the previous year and below analysts’ projection, which was approximately US$402 million. The company also announced the closure of operations in the United Kingdom. CEO Matt Baer expressed commitment to the company’s growth. Shares are flat in Tuesday’s premarket.