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Wednesday’s Wall Street Highlights: Apple, Intel, Cal-Maine, A10 Networks, and more

Fernanda T
Latest News
October 04 2023 03:22AM

US index futures are slightly down in Wednesday’s pre-market, following a challenging session that pushed the Dow Jones into negative territory for the year 2023. Signs of stabilization emerge as Treasury yields firm up, and the dollar, after climbing to a 10-month peak against the G10 currencies, stabilizes.

At 06:42 AM, Dow Jones futures (DOWI:DJI) rose by 13 points, or 0.02%. S&P 500 futures were down 0.03%, and Nasdaq-100 futures declined by 0.14%. The 10-year Treasury bond yield stood at 4.829%.

In the commodities market, West Texas Intermediate crude for November dropped by 1.82% to $87.61 a barrel. December Brent oil fell by 1.76%, near $89.34 a barrel.

On Wednesday’s economic calendar, investors await the ADP report on private sector employment for September at 08:15 AM. At 09:45 AM, S&P Global will present the final September PMI composite. Subsequently, at 10:00 AM, attention turns to the indices: ISM will release the services PMI and August’s industrial orders will be presented. Concurrently, the President of the Kansas City Fed and the interim President of the St. Louis Fed will participate in an event. Shortly after, at 10:25 AM, Fed Director Michelle Bowman will deliver her speech. The dynamics of the oil market will be outlined at 10:30 AM with the DoE’s release of weekly oil stocks. Finally, at 12:00 PM, focus shifts to NY, where Lagarde will speak at a university.

European markets rebounded after initially declining, especially in the automotive sector. The slowdown in industrial production and the decline in new orders accentuated pessimism. Meanwhile, U.S. Treasury yields reached 16-year highs.

Asian stock markets displayed a predominantly negative performance on Wednesday. In Tokyo, the Nikkei ended the day down by 2.28%, closing at 30,526 points. Hong Kong also felt the weight of the bearish market, with the Hang Seng dropping 0.78% to 17,195 points. The Shanghai stock exchange remained closed, as did the CSI300 index, which encompasses the largest companies listed in both Shanghai and Shenzhen. Seoul was no exception to the regional trend, with the KOSPI recording a sharp decline of 2.41%, ending at 2,405 points. Taiwan also saw a decrease, with the TAIEX dropping 1.10% to 16,273 points. In Singapore, the Straits Times fell 1.41%, closing at 3,147 points. Finally, in Sydney, the S&P/ASX 200 retreated 0.77%, finishing at 6,890 points.

On Tuesday’s close, stock indices declined, and Treasury yields reached their highest values in over a decade after recent employment indicators suggested that the Federal Reserve might need to maintain high-interest rates for an extended period. The Dow Jones fell 430.97 points or 1.29% to 33,002.38 points. The S&P 500 declined by 58.94 points or 1.37% to 4,229.45 points. The Nasdaq Composite plummeted by 248.31 points or 1.87% to 13,059.47 points.

JOLTS study showed that job opportunities rose to 9.6 million, up from 9 million in July, intensifying expectations of a Federal Reserve rate hike in December, currently almost 50% likely. However, the crucial labor market data to watch this week is the payrolls report, expected on Friday, potentially setting the stage for market recoveries by week’s end.

Moreover, throughout the day, there were stricter remarks from some Fed officials. Loretta Mester, president of the Cleveland Fed, expressed support for another rate hike this year, while Michelle Bowman emphasized the need for multiple hikes.

On Wednesday’s corporate earnings front, investors will be watching before the market opens for reports from Tilray (NASDAQ:TLRY), Helen of Troy (NASDAQ:HELE), RPM (NYSE:RPM), Acuity Brands (NYSE:AYI) and Angiodynamics (NASDAQ:ANGO). After closing, results from Accolade (NASDAQ:ACCD) and RGP (NASDAQ:RGP) will be awaited.

Wall Street Corporate Highlights for Today

Apple  (NASDAQ:AAPL) – KeyBanc downgraded Apple from “overweight” to “sector weight,” citing that shares are trading at near-record values ​​and at a hefty premium to the Nasdaq. Analysts predict moderate growth for Apple in the Americas. KeyBanc did not set a price target for the shares, which fell 0.99% in premarket trading to trade at $170.69.

Meta Platforms (NASDAQ:META) – Meta plans to lay off employees from its Reality Labs unit, focused on the metaverse and the creation of custom silicon. The extent of the cuts in the FAST team, which has 600 members, is uncertain. Significant reductions could impact Mark Zuckerberg’s plans for the metaverse. Meta has already cut 21,000 jobs since November of the previous year. Additionally, Meta’s Oversight Board will investigate a manipulated video of Joe Biden on Facebook following a complaint. Funded by Meta, the board will assess media manipulation and the company’s policies on election misinformation. Meta also plans to launch ad-free subscription plans for Facebook and Instagram in Europe, aiming to comply with EU regulations. The most viable plan will cost 10 euros per month, with an increase for mobile devices due to app store commissions.

Amazon  (NASDAQ:AMZN)Microsoft  (NASDAQ:MSFT) – British regulator Ofcom will pursue an antitrust investigation into Amazon and Microsoft due to their dominance in the UK cloud computing market. Together, these companies hold 60-70% of the market, while Google  (NASDAQ:GOOGL) holds around 10%.

Microsoft  (NASDAQ:MSFT) – LinkedIn will integrate artificial intelligence to help recruiters search for candidates using natural language and make it easier to create advertising campaigns. The technology, coming from OpenAI, allows for more intuitive searches, focusing on skills rather than specific titles. The implementation will not incur additional costs for users.

Netflix  (NASDAQ:NFLX) – Netflix plans to raise prices for its ad-free service after the Hollywood actors’ strike ends. The increase will likely begin in the US and Canada, as reported by the Wall Street Journal.

Warner Bros. Discovery  (NASDAQ:WBD) – Warner Bros.’ Discovery+ streaming service, Discovery, has increased the price of its ad-free monthly subscriptions from $6.99 to $8.99. This is the first increase since its launch in January 2021.

Paramount Global  (NASDAQ:PARA) – Paramount Global may delay the launch of Paramount+ in India, opting to strengthen existing partnerships, such as with streaming service JioCinema. Many media companies are reevaluating global expansions and reducing spending to achieve profitability in streaming services, given competition and the shift from traditional to digital. Local deals can be more strategic in certain markets to effectively reach target audiences.

Intel  (NASDAQ:INTC) – Intel announced plans to make its programmable chip unit an independent business in January, with a potential public offering in 2-3 years. The company acquired that unit in 2015. Intel shares rose 1.8% in premarket trading Wednesday.

Spotify  (NYSE:SPOT) – Spotify will offer 15 hours of free audiobooks monthly to premium subscribers in the UK and Australia, expanding the feature to the US later this year. With this, the company expands its portfolio beyond music, challenging Amazon’s Audible.

Zoom Video Communications  (NASDAQ:ZM) – Zoom faces challenges with the return to in-person work and competition from Microsoft. In response, it launched Zoom Docs, with AI capabilities, to assist users with writing, editing, summarizing and adjusting tone, in addition to incorporating points discussed in meetings.

A10 Networks  (NYSE:ATEN) – A10 Networks fell 14.3% in Wednesday’s pre-market after forecasting third-quarter revenue of between $56.5 million and $58.5 million, below estimates. US$72.1 million recorded in the previous year and also lower than analysts’ expectations of US$74.6 million. The company attributed the reduction to delays caused by capital expenditures by its service provider customers in North America.

Johnson & Johnson  (NYSE:JNJ) – A New Jersey appeals court overturned a $223.8 million verdict against Johnson & Johnson, awarded to individuals who claimed cancer due to exposure to asbestos in the company’s talcum powder products. The ruling questioned the validity of expert testimony presented at the original trial. J&J has reaffirmed the safety of its products and faces other lawsuits over similar allegations.

Eli Lilly  (NYSE:LLY) – Eli Lilly will acquire Point Biopharma for $1.4 billion, expanding its portfolio of targeted cancer therapies. This move follows Lilly’s trend of strengthening its pipeline through acquisitions while facing competition in the oncology market. Point Biopharma is developing radioligand therapies in advanced studies.

Takeda Pharmaceutical  (NYSE:TAK) – Takeda Pharmaceutical announced that its dengue vaccine has been recommended by a WHO advisory. Dengue affects around 390 million people annually in more than 100 countries.

Novavax  (NASDAQ:NVAX) – The FDA has approved Novavax’s updated Covid-19 vaccine. The new vaccine targets the XBB.1.15 variant. Unlike messenger RNA technology, Novavax uses protein.

Insulet Corp  (NASDAQ:PODD)3M  (NYSE:MMM) – Wayde McMillan will step down as chief financial officer of Insulet Corp on October 20 to become CFO of 3M’s healthcare unit, which plans to become a listed company until the end of 2023.

Krispy Kreme  (NASDAQ:DNUT) – Krispy Kreme is considering selling its Insomnia Cookies unit to focus on its core donut business. As US food companies reassess their portfolios, Insomnia, present in three countries, expects to generate US$230 million in 2023.

Molson Coors Beverage  (NYSE:TAP) – Molson Coors announced a five-year, $2 billion share repurchase program, targeting its second consecutive year of growth in sales and profits. Executives expect an increase in sales, driven by premium beverages and diversification beyond beer.

Cal-Maine Foods  (NASDAQ:CALM) – Shares of Cal-Maine Foods fell 12.3% in premarket trading Wednesday after the company reported a 30% drop in egg prices, significantly impacting its profitability. First-quarter net income fell 99% to $926,000, or 2 cents per share. That was well below FactSet analysts’ consensus estimate of 33 cents per share. Sales also fell to $459.3 million.

UBS  (NYSE:UBS) – UBS is offering superior deposit rates to attract customers following its acquisition of troubled Credit Suisse. Customers who deposit with Credit Suisse, now part of UBS, receive around 1.8%. UBS aims to regain client trust and funds.

Goldman Sachs  (NYSE:GS) – Chris Kojima, a Goldman Sachs executive with almost 28 years of experience, will leave the bank at the end of the year. He will join private equity firm General Atlantic in 2024. During his career at Goldman, Kojima held several leadership roles, contributing significantly to the bank. Matt Gibson will assume his responsibilities.

Barclays  (NYSE:BCS)Citigroup  (NYSE:C),  Standard Chartered  (LSE:STAN) – Top bankers and investors, who ignored the UN climate conference in Sharm El-Sheikh, prepare for a significant presence at COP28 in Dubai, due to its financial relevance. Barclays, Citigroup and Standard Chartered will expand their delegations, highlighting a focus on climate finance and renewable energy. Expectations are high for concrete commitments and real funding for green initiatives.

KKR & Co.  (NYSE:KKR) – KKR & Co. has opened an office in Gurugram, India, to strengthen investment operations and serve clients. The company intends to hire 150 professionals in various areas by next year. Nisha Awasthi, formerly of  BlackRock  (NYSE:BLK), will lead the office. KKR, active in India since 2006, recently invested in billionaire Mukesh Ambani’s retail unit.

Ford Motor  (NYSE:F) – Ford has submitted a seventh offer to try to resolve the UAW strikes, proposing significant wage increases. Despite this, negotiations over battery factories remain a point of contention.

General Motors  (NYSE:GM) – General Motors laid off an additional 163 workers due to strikes. U.S. auto production may decline due to shutdowns.

United Airlines  (NASDAQ:UAL) – United Airlines has ordered 110 aircraft from Boeing  (NYSE:BA) and Airbus  (USOTC:EADSY), aiming for deliveries from 2028 and expanding its international network. This move aims to address supply chain delays and infrastructure bottlenecks.

BP  (NYSE:BP) – BP Plc is considering selling 49% of its pipeline network in the Gulf of Mexico to raise up to $1 billion. This move aims to reduce debt and maintain dividends. The company already has precedent, selling assets in the US previously.

United Parcel Service  (NYSE:UPS)FedEx  (NYSE:FDX) – U.S. retailers are getting discounts from UPS and FedEx after four years, reversing the trend of 2021 and 2022 when companies turned away discounts due to the rise in online shopping. Currently, with reduced demand, both delivery companies are looking to fill their trucks and offer competitive prices.