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Tuesday’s Wall Street Highlights: GM, Unity, Northrop Grumman, ParaZero, PepsiCo, and More

Fernanda T
Latest News
October 10 2023 03:28AM

US index futures advanced in pre-market trading on Tuesday, extending the positive momentum from the previous day. This came in response to optimistic comments about interest rates in the U.S., contributing to improved investor sentiment.

At 06:53 AM, Dow Jones (DOWI:DJI) futures rose by 79 points, or 0.23%. S&P 500 futures increased by 0.22%, and Nasdaq-100 futures rose by 31%. The yield on 10-year Treasury bonds was at 4.682%.

In the commodities market, West Texas Intermediate crude oil for November fell by 0.57% to $85.89 per barrel. Brent crude oil for December declined by 0.48% to near $87.75 per barrel. Iron ore with a 62% concentration, traded on the Dalian exchange, fell by 1.74% to $112.31 per ton.

The conflict between the terrorist group Hamas and Israel raises concerns, creating uncertainty in the markets. There are fears of a potential geopolitical escalation and impacts on the commodities market, especially in the price of Brent crude oil. Investors are concerned about a destabilization in the oil supply if Iran becomes involved and closes the Strait of Hormuz, through which a significant portion of global oil production passes. Additionally, the conflict has led to a search for safe-haven assets, such as gold and the U.S. dollar, which could harm developing economies.

On the agenda, the IMF and World Bank meetings in Morocco stand out, featuring speeches by central bank presidents, including Christine Lagarde of the European Central Bank (ECB). The IMF has also released a report warning of persistent inflation and the need for more restrictive monetary policies, as well as weaker global growth in 2024.

In Asia, markets closed with mixed directions. In Japan, the current account balance in August fell below projections due to reduced global demand for the country’s products, impacted by inflation. In China, despite expectations of new stimuli, the market did not sustain positive territory. The country is considering issuing additional sovereign debt to finance infrastructure spending. Furthermore, real estate developer Country Garden indicated the possibility of default and hired consultants due to declining sales. In the corporate sphere, another executive, He Jinbi, founder of Maike Metals, was detained by police due to creditor actions, following the case of Hui Ka Yan, founder of Evergrande.

On Tuesday’s U.S. economic agenda, investors are awaiting a speech by Atlanta Fed President Raphael Bostic at 9:30 AM, followed by Fed Governor Christopher Waller at 1:30 PM. Neel Kashkari, President of the Minneapolis Fed, will speak at 3:00 PM, and San Francisco Fed President Mary Daly will address the audience at 6:00 PM.

At Monday’s close, the Dow Jones gained 197.07 points or 0.59% at 33,604.65. The S&P 500 finished up 27.16 points or 0.63% to 4,335.66, while the Nasdaq Composite ended with a gain of 52.90 points or 0.39% to 13,484.24. It was a day of ups and downs, and US markets headed towards a positive close, thanks to more conciliatory statements from Federal Reserve leaders. Fed Vice Chairman Philip Jefferson recommended a cautious approach to monetary policy. On the other hand, L. Logan, leader of the Dallas Fed, opined that an increase in long-term interest rates could reduce the need for future rate hikes by the FOMC. Notably, the price of Brent registered an increase of over 4% on the day.

On Tuesday’s corporate earnings front, investors will be watching reports from Pepsico (NASDAQ:PEP), Neogen (NASDAQ:NEOG), AZZ (NYSE:AZZ) and E2Open (NYSE:ETWO).

Wall Street Corporate Highlights for Today

Microsoft  (NASDAQ:MSFT)Apple  (NASDAQ:AAPL) – The EU is investigating whether Microsoft’s Bing, Edge and Microsoft Advertising as well as Apple’s iMessage must follow the new Digital Markets Act (DMA) technology rules. The European Commission questioned users and competitors about the importance of these services in relation to competitors and their ecosystems. The investigation is expected to be completed within five months.

Nvidia  (NASDAQ:NVDA) – Nvidia shares have faced pressure due to news about OpenAI exploring manufacturing its own AI chips, threatening Nvidia as a supplier. However, Nvidia remains optimistic, expecting to maintain its leadership in the AI ​​GPU market.

Arm Holdings  (NASDAQ:ARM) – Arm Holdings has received positive reviews from Wall Street analysts, highlighting its leadership in smartphone chips and potential in data centers. This followed the post-IPO quiet period when banks underwrote Arm’s initial public offering. Analysts expressed confidence in increased revenue through royalties and expansion in markets such as cloud and automotive. While some brokerages were cautious due to uncertainty in the smartphone market, most analysis was bullish, with target prices in the range of $57 to $85. SoftBank Group, owner of Arm, expects to maintain its majority stake in company.

Unity Software  (NYSE:U) – Video game software maker Unity has announced the immediate retirement of John Riccitiello as CEO. James Whitehurst has been named interim CEO, joining from IBM  (NYSE:IBM) following its acquisition of Red Hat, where he served as president and CEO from 2008 to 2020. Roelof Botha has been named president.

PagerDuty  (NYSE:PD) – PagerDuty, a company specializing in incident management software, announced its intention to issue $350 million in convertible senior notes.

ParaZero Technologies  (NASDAQ:PRZO) – ParaZero Technologies shares rose in Tuesday’s pre-market trading, following a 133% gain on Monday, after its drone manufacturing partner received approval in Australia to operate drones in densely populated areas.

Walt Disney  (NYSE:DIS) – Activist investor Nelson Peltz plans a new challenge to Walt Disney’s board less than 10 months after plans to respond to his criticism. With Disney shares falling 30% since then, Peltz, an 82-year-old billionaire, could seek multiple board seats, including one for himself. Peltz’s Trian Fund Management is one of Disney’s biggest investors, owning about $2.5 billion in the company’s shares. If Disney rejects the request, Trian could nominate director candidates, paving the way for shareholders to vote.

Best Buy  (NYSE:BBY) – Best Buy is expanding its presence in healthcare by selling the Dexcom G7 prescription medical device, which monitors glucose levels. The company plans to expand its glucose monitoring product offering and enter other areas of healthcare. The initiative is part of Best Buy’s efforts to increase its long-term profitability.

Ventyx Biosciences  (NASDAQ:VTYX) – Pivotal results from Ventyx Biosciences’ VTX002 clinical trial in patients with moderately to severely active ulcerative colitis were at the low end of the company’s guidance.

General Motors  (NYSE:GM)Stellantis  (NYSE:STLA)Ford Motor  (NYSE:F) – Canada’s Unifor union announced strikes at three General Motors facilities after negotiations to improve wages and pensions failed before the deadline. The strike affects locations in Oshawa, St. Catharines and Woodstock, increasing unrest in the U.S. and Canadian auto industry. GM expressed disappointment and will continue negotiations. Stellantis said Monday it laid off 570 workers, and General Motors cut nearly 200 employees due to the United Auto Workers strike. Ford also laid off another 70 workers in Michigan, bringing the total to 1,865 layoffs since the strike began.

Tesla  (NASDAQ:TSLA) – Employees at Tesla’s factory in Brandenburg, Germany, are joining the IG Metall union over health, safety and overwork concerns. The union alleges understaffing and inadequate safety measures, leading to frequent accidents and a high rate of illness among workers. IG Metall reported a sharp increase in Tesla membership.

Rivian Automotive  (NASDAQ:RIVN) – Rivian Automotive saw a 3.3% increase in Tuesday pre-market trading to $19.40 after receiving an upgrade to “Buy” from “Neutral” along with a target price of $24 per share. The electric truck maker’s shares fell significantly last week due to the announcement of a $1.5 billion convertible note offering to raise additional funds.

Northrop Grumman  (NYSE:NOC)Lockheed Martin  (NYSE:LMT) – In the wake of Hamas’ attack on Israel, defense stocks performed remarkably well on Monday. Northrop Grumman posted an 11% increase in regular trading on Monday, with an additional 0.99% in pre-market trading on Tuesday, while Lockheed Martin, which gained 8.9% on the same day , had an increase of 0.88% in pre-market negotiations.

Chevron  (NYSE:CVX) – For security reasons amid the conflict with Hamas, Israel requested that Chevron close a natural gas platform in the Eastern Mediterranean Sea. Chevron operates two platforms in the Tamar and Leviathan gas fields in Israel. Shares rose 3.1% on Monday, leading the Dow Jones Industrial Average.

Pioneer Natural Resources  (NYSE:PXD)Exxon Mobil  (NYSE:XOM) – Exxon Mobil’s possible acquisition of Pioneer Natural Resources could further restrict production growth in the Permian oil field, affecting companies and pipeline suppliers. This could also allow the company to negotiate favorable pricing due to increased work volume. The White House would have difficulty preventing such a takeover.

AO Smith  (NYSE:AOS) – AO Smith Corp. announced on Monday a 7% increase in its quarterly cash dividend, bringing it to 32 cents per share. The company justified the increase as a reflection of confidence in the stability of replacement demand in its business and its commitment to returning capital to shareholders.

Truist Financial  (NYSE:TFC) – Truist Financial Corp is in discussions to sell its insurance brokerage unit to private equity firm Stone Point for approximately $10 billion, according to Semafor. The sale follows the sale of a 20% stake in Truist’s insurance business to Stone Point in February. The deal is still in progress and may depend on Stone Point’s ability to obtain adequate financing.

JPMorgan  (NYSE:JPM)Apple  (NASDAQ:AAPL) – JP Morgan lowered its confidence in demand for Apple’s iPhone 15 Pro and 15 Pro Max, citing shorter delivery times suggest less robust demand.

Morgan Stanley  (NYSE:MS) – Morgan Stanley has agreed to pay a $20 million option mentioned in the commodities fraud case involving Neil Phillips, co-founder of Glen Point Capital, who faces trial in New York. The bank was involved as an options seller in the case, but was not directly accused. The trial could question the legality of so-called “barrier chases” in foreign exchange markets, as Phillips alleges authorities are trying to criminalize normal trading practices. The trial begins on October 16th.

Citigroup  (NYSE:C) – Investors are reducing their bets on the continued decline in U.S. stock futures as the pace of flows slows, according to Citigroup strategists. While positioning is still moderately bearish on S&P 500 and Nasdaq 100 futures, it is unclear whether this slowdown in momentum will mark the end of the sell-off. The S&P 500 rebounded in October after two months of declines, but 10-year bond yields have fallen recently. The minutes of the last Fed meeting and US inflation data are on investors’ radar.

Deutsche Bank (NYSE:DB) – Spanish securities regulator CNMV is scrutinizing Deutsche Bank’s sales of currency derivatives to small businesses in Spain, intensifying its investigation into the matter. The analysis focuses on compliance with rules that prohibit the marketing of complex derivatives to inexperienced buyers. The European Central Bank also expressed concern about Deutsche Bank’s sales in the country. The bank has stopped selling these products and is trying to reduce its existing portfolio, but this process is taking longer than expected. Additionally, Deutsche Bank formed a panel with internal executives and external organizations, such as the United Nations and the World Wide Fund for Nature, to assess nature-related risks and develop financial products linked to biodiversity. The bank seeks to better understand these risks, integrate them into its processes and offer sustainable products to global clients, while global biodiversity faces challenges. Deutsche Bank is also considering investing in nature-related startups and participating in debt-for-natural resource swaps, aiming for financial and environmental sustainability.

Imax Corp  (NYSE:IMAX) – Benchmark raised its price target for Imax Corp. from US$23 to US$24, due to better than expected box office performance. Global box office in the third quarter surpassed estimates, reaching 141% of pre-pandemic performance. China is seen as a market with recovery potential by 2024, and national and international markets are expected to equal or exceed pre-pandemic values. Imax had success with the film “Oppenheimer” and had the best July at the box office ever. Imax shares fell 1.9% on Monday.

Carnival  (NYSE:CCL),  Royal Caribbean  (NYSE:RCL),  Norwegian Cruise Line Holdings  (NYSE:NCLH) – Of the three major cruise operators, Carnival Corp. is the least exposed to cruises in Israel, but its shares are taking the most significant hit. Wells Fargo analyst Daniel Politzer notes that Hamas’ surprise attack on Israel over the weekend had the biggest impact on the Royal Caribbean Group, followed by Norwegian Cruise Line Holdings and then Carnival. He predicts pressure on prices in the fourth and first quarter due to cancellations and modifications of cruise itineraries to Israel.

Hyatt Hotels  (NYSE:H) – Hyatt Hotels will replace National Instruments Corp in the S&P MidCap 400 before trading opens on Thursday, after Emerson Electric Co. agreed to acquire National Instruments.

Gamer Pakistan  (NASDAQ:GPAK) – Gamer Pakistan, the first Pakistani esports company listed on the Nasdaq, saw its shares debut higher before falling. The company raised $6.8 million in its IPO and is looking to develop collegiate and professional sporting events in Pakistan, with plans for global expansion. The company sold 1.7 million shares at a price of $4 each. With 25.6 million shares outstanding, the company was valued at $102.4 million at the IPO. The shares opened at US$4.20, exceeding the IPO price by 5%, reaching a valuation of around US$107.4 million. After trading at $4.39, they fell 29%.

PepsiCo  (NASDAQ:PEP) – PepsiCo exceeded analysts’ expectations by reporting quarterly earnings and revenue. Adjusted EPS was $2.25 compared to the $2.15 expected, and revenue came in at $23.45 billion compared to the $23.39 billion forecast. Additionally, Pepsi raised its full-year profit outlook, projecting 13% growth from its previous forecast of 12%. However, the company’s sales volume continued to fall due to price increases implemented to combat inflation. The company’s shares rose 2.5% in pre-market trading.