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Wednesday’s Wall Street Highlights: Qualcomm, Alphabet, Microsoft, GM, SunPower, and More

Fernanda T
Latest News
October 25 2023 03:19AM

US index futures are mixed in Wednesday’s pre-market, influenced by the quarterly results of Microsoft and Alphabet, which set the stage for other major technology companies yet to report their results this week.

At 06:51 AM, Dow Jones futures (DOWI:DJI) rose by 39 points, or 0.12%. S&P 500 futures fell by 0.35%, and Nasdaq-100 futures dropped by 0.58%. The yield on 10-year Treasury bonds stood at 4.863%.

In the commodities market, West Texas Intermediate crude oil for December declined by 0.24% to $83.54 per barrel. Brent crude oil for December fell by 0.12% to nearly $87.97 per barrel. Iron ore with a 62% concentration, traded on the Dalian exchange, rose by 3.32% to $119.20, marking the second consecutive session gain after three declines.

On Wednesday’s economic calendar, investors are awaiting new home sales data for September, to be released by the Department of Commerce at 10:00 AM. At 10:30 AM, inventory data for the week ending October 20th will be published. Jerome Powell is scheduled to speak at an event in Washington at 16:45 PM. In the political arena, the race for the U.S. House Speaker position remains undecided.

Asian stock markets had mixed results. Shanghai Composite and Japan’s Nikkei rose, while Hong Kong’s Hang Seng gained. South Korea’s Kospi and Australia’s ASX 200 fell due to higher-than-expected inflation in Australia. Troubled Chinese developer Country Garden defaulted on a dollar bond, reflecting China’s real estate crisis. Bank of Japan is monitoring bond yields before its policy meeting.

In Europe, most markets declined, except the UK’s FTSE 100, which saw a slight increase. Stoxx 600 fell, with mining stocks rising and retail stocks dropping. Deutsche Bank’s 7% share increase couldn’t boost the index, as Kering, Reckitt Benckiser, Worldline, and Peer Nexi all faced declines.

US Stock markets closed higher on Tuesday’s session, recovering from previous declines, fueled by optimism about the financial results of tech giants, with Alphabet (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) reporting after the closing bell. The Dow Jones rose 204.97 points or 0.62% to 33,141.38 points. The S&P 500 gained 30.63 points or 0.73% to 4,247.68 points. The Nasdaq advanced 121.55 points or 0.93% to 13,139.87 points.

Before Tuesday’s session began, major companies, including Coca-Cola (NYSE:KO), General Motors (NYSE:GM), and Verizon (NYSE:VZ), announced better-than-expected results, boosting investor sentiment. Additionally, international efforts to resolve the impasse between Israel and Hamas influenced a drop in oil prices to less than $90 per barrel. It’s worth mentioning the PMI indicators released in both Europe and the U.S. In Europe, the data was discouraging for both the services and industrial sectors, while in the U.S., the statistics exceeded expectations.

On Wednesday’s corporate earnings front, investors will be watching for reports from Boeing (NYSE:BA), ThermoFisher (NYSE:TMO), T-Mobile (NASDAQ:TMUS), Hilton (NYSE:HLT), Roper Technologies (NASDAQ:ROP) before the market opens. After the closing bell, results from Meta Platforms (NASDAQ:META), IBM (NYSE:IBM), Servicenow (NYSE:NOW), Align Technology (NASDAQ:ALGN), Baker Hughes (NASDAQ:BKR), and several other companies are also expected.

Wall Street Corporate Highlights for Today

Amazon (NASDAQ:AMZN) – Amazon Web Services (AWS) plans to launch a sovereign cloud in Europe, storing data on servers in the European Union with exclusive control by AWS employees residing in the EU. This complies with EU privacy and security regulations, with AWS debuting in Germany and offering services to European customers.

Apple (NASDAQ:AAPL) – Apple will support a right-to-repair bill in the US, allowing independent repair shops and consumers to access parts and tools to fix iPhones and computers, reducing costs and promoting sustainability. Apple has also supported similar legislation in California. Apple also plans to redesign its TV app as part of a tvOS software update scheduled for December. The revamp will include discontinuing dedicated apps for renting and purchasing movies and shows and adopting a user interface similar to Netflix (NASDAQ:NFLX). Additionally, Apple announced a special event called “Scary Fast” on October 30, possibly unveiling new Mac devices with a faster M3 chip.

Nvidia (NASDAQ:NVDA) – US restrictions on Nvidia’s AI chip exports to China took effect on Monday, ahead of the deadline. Nvidia does not foresee an immediate impact on profits, while other companies like AMD (NASDAQ:AMD) and Intel (NASDAQ:INTC) are also assessing the impact.

Qualcomm (NASDAQ:QCOM) – Qualcomm unveiled its Snapdragon Elite X chip for Microsoft (NASDAQ:MSFT) Windows laptops, emphasizing its superior AI performance compared to Apple chips. Qualcomm plans to make it available next year. This development follows Microsoft’s push for AI features in Windows.

VMware (NYSE:VMW) – VMware’s stock had unusual movements on Tuesday, falling and then rising above Broadcom’s (NASDAQ:AVGO) cash offer value. Investors speculate about the extension of the stock election period, driven by concerns about potential regulatory approval delays in China.

ASML (NASDAQ:ASML) – Dutch lawmakers questioned the Minister of Commerce about the legality of new US rules for exporting ASML chip manufacturing machines to China. While they do not oppose the US rules, they call for a more coordinated European approach. The US rules aim to restrict exports of machines containing US-made parts to curb Chinese technological advancement.

Foxconn (USOTC:FXCOF) – Terry Gou, the founder of Foxconn and a Taiwanese billionaire, had ambitions of becoming the country’s president, but his candidacy is declining, and he faces a tax investigation in China, possibly due to his decision to run as an independent, which could benefit Taiwan’s separatist candidate. Despite his wealth and connections, Gou has seen his political popularity decline in polls.

Corning (NYSE:GLW) – Corning projected fourth-quarter core sales below market expectations, citing a potential impact from the strike at Detroit Three automakers. The company provides automotive components and faces a slowdown in demand for fiber optic cables. Its specialty materials business, including Gorilla Glass for smartphones, was a positive exception, boosted by the launch of the iPhone 15.

General Motors (NYSE:GM) – California ordered on Tuesday that General Motors’ Cruise unit remove its autonomous cars from state roads, citing public risk and misrepresentation of safety. Cruise has suspended operations and is reviewing previous incidents. GM withdrew its profit forecast for 2023 due to the United Auto Workers (UAW) strike, which has shut down three highly profitable factories in Arlington, Texas. The strike increases weekly costs by $400 million. Negotiations continue, with the UAW seeking additional gains.

Honda Motor (NYSE:HMC) – Honda Motor is ending its partnership with General Motors to develop affordable electric vehicles due to financial challenges. CEO Toshihiro Mibe stated that the project has been canceled, and both companies will seek solutions separately. The partnership aimed to compete with Tesla (NASDAQ:TSLA) in producing affordable EVs.

Stellantis (NYSE:STLA) – Stellantis plans a joint venture with the French company Orano to recycle electric vehicle batteries and scrap from its gigafactories in Europe and North America. The agreement will provide access to essential materials for electrification. Production will commence in the first half of 2026.

Nikola (NASDAQ:NKLA) – Nikola’s shares closed higher on Tuesday due to the possibility of receiving an infusion of money after an arbitrator ordered former CEO Trevor Milton to pay $165 million to the company for securities fraud conviction in 2022. This adds approximately $80 million to Nikola’s market capitalization, which ended the second quarter with over $225 million in cash.

Carnival Corp (NYSE:CCL) – Carnival Corp’s Australian unit was ordered to pay the medical expenses of a woman who contracted Covid-19, following a judge’s decision that the company misled passengers about safety risks in a landmark class-action lawsuit. The judge concluded that Carnival Australia should have canceled the March 2020 return voyage from Sydney to New Zealand. The lead plaintiff received compensation for medical expenses, but other parties are expected to seek greater damages.

JetBlue Airways (NASDAQ:JBLU) – JetBlue has asked the US Department of Transportation to ban KLM from Air France at JFK Airport, New York, if planned restrictions at Amsterdam’s Schiphol Airport occur, citing violations of the US-EU Air Transport Agreement. KLM has warned of potential retaliation.

BlackRock (NYSE:BLK) – BlackRock’s proposed bitcoin ETF has been added to a DTCC clearinghouse eligibility file, sparking speculation about its success and driving Bitcoin (COIN:BTCUSD) to its highest level in 18 months. However, DTCC clarified that listing does not indicate regulatory approval, and the SEC has not commented. Approval could attract more investment into the crypto sector.

Goldman Sachs (NYSE:GS) – David Kamo has been appointed by Goldman Sachs as global head of financial sponsor mergers and acquisitions, leading efforts to work with private equity firms and alternative asset managers in buying and selling companies in their portfolios. He will also continue to lead cross-market mergers and acquisitions for the bank.

KKR & Co (NYSE:KKR) – KKR & Co. is in advanced negotiations to invest approximately $400 million in OMS Group Sdn, a Malaysian submarine cable company. This investment could accelerate OMS’ expansion plans, although deal details are still under discussion.

S&P Global Ratings (NYSE:SPGI) – S&P Global Ratings downgraded Israel’s sovereign debt outlook to negative, citing risks associated with the Israel-Hamas conflict and predicting a 5% economic contraction in the fourth quarter due to security disturbances and reduced business activity.

Petrobras (NYSE:PBR) – Petrobras confirmed that the capital reserve to be created will not be used for capital investments but exclusively for dividend payments, calming market concerns and positively impacting the company’s shares. The decision on extra dividends will be made later.

Archer-Daniels-Midland (NYSE:ADM) – Archer-Daniels-Midland Co exceeded profit estimates in the third quarter due to strong ethanol and sweetener margins, along with robust Brazilian agricultural exports. The company raised its profit projections for the year and anticipated a return to profit growth in the Nutrition unit in 2024.

SunPower (NASDAQ:SPWR) – SunPower fell 9.4% in pre-market trading after the solar panel manufacturer announced it would review its financial statements for 2022 and the first two quarters of 2023. The company identified an overvaluation of approximately $16 million to $20 million in consigned component stock at third-party locations.

Eli Lilly (NYSE:LLY) – Most people want to lose weight and make money, regardless of global uncertainties. Eli Lilly’s shares are seen as an opportunity to capitalize on the Mounjaro drug for obesity. Although there are risks, the thesis is solid, even amid market turbulence.

Johnson & Johnson (NYSE:JNJ) – Johnson & Johnson’s shares approached their lowest level in 52 weeks on Tuesday, even after recent positive quarterly results, reflecting general concerns about the pharmaceutical and medical device industry due to political uncertainties, including new Medicare drug pricing policies and the impact of obesity drugs on device sales.

Earnings

Alphabet (NASDAQ:GOOGL) – Alphabet’s shares were down 6.5% in Wednesday’s pre-market, despite surpassing analysts’ expectations for third-quarter results and earnings. Revenue showed accelerated growth of 11% compared to the previous quarter, marking the first time in four quarters that revenue reached a double-digit growth rate. However, Google Cloud revenue came in at $8.41 billion, significantly below the consensus estimate of $8.64 billion, as reported by StreetAccount.

Microsoft (NASDAQ:MSFT) – Microsoft’s shares are up 3.7% in Wednesday’s pre-market after reporting first-quarter financial results that exceeded expert expectations. Microsoft reported earnings per share of $2.99 with revenue of $56.52 billion. This contrasts with analysts’ predictions of earnings per share of $2.65 and revenue of $54.50 billion, according to LSEG. Microsoft’s increased profit was driven by lower-than-expected operating expenses and outstanding performance in its Azure cloud computing segment.

Snap Inc (NYSE:SNAP) – The parent company of Snapchat saw a 0.4% increase in pre-market trading after releasing third-quarter results. Snap reported earnings of 2 cents per share and revenue of $1.19 billion, surpassing analysts’ estimates polled by LSEG, which projected a loss of 4 cents per share with revenue of $1.11 billion. CEO Evan Spiegel highlighted a return to sales growth during the quarter. The stock initially rose by up to 20% in after-hours trading but then retreated as investors reacted to news that some advertisers had reduced their spending due to the start of the conflict between Israel and Hamas.

Stride (NYSE:LRN) – The technology-focused education company experienced a 12.3% increase in pre-market trading after reporting fiscal first-quarter financial results that exceeded expectations. Stride announced earnings of 11 cents per share, surprising analysts who had anticipated a loss of 37 cents per share, according to FactSet. Additionally, revenue also exceeded projections, reaching $480.2 million, while analysts estimated $425.2 million. Strong enrollment performance in the General Education and Professional Learning sectors drove revenue growth.

Texas Instruments (NASDAQ:TXN) – Shares of the semiconductor design and manufacturing company fell 4.5% in pre-market trading after reporting mixed earnings results. The company announced earnings per share of $1.85, which exceeded analysts’ expectations of $1.82, according to LSEG. However, revenue slightly missed estimates, totaling $4.53 billion compared to analysts’ consensus of $4.58 billion.

Visa (NYSE:V) – The global payment company’s shares fell 0.7% in Wednesday’s pre-market, even after reporting a decline in profits and revenues for the last fiscal quarter. Visa chose to increase its dividends by around 16% and also approved a $25 billion stock buyback.

Teladoc Health (NYSE:TDOC) – In the third quarter, Teladoc Health reported an increase in revenue, driven by higher access rates, while net losses decreased compared to the previous year. Revenue increased by 8% to $660 million from $611 million a year earlier. Analysts expected $664 million. Teladoc reported a loss of $57.1 million, or 35 cents per share, compared to a loss of $73.48 million, or 45 cents per share, a year ago. Analysts expected a loss of 37 cents per share. The company announced plans for an operational review to improve efficiency.

CoStar Group (NASDAQ:CSGP) – The commercial real estate company released profit and revenue projections for the fourth quarter that did not meet analysts’ expectations. In the third quarter, CoStar’s revenue reached $625 million, which fell short of the consensus estimates of $625 million, according to FactSet. Meanwhile, adjusted earnings per share were 30 cents, in line with estimates.

Deutsche Bank (NYSE:DB) – Deutsche Bank pledged more share buybacks and potentially higher capital returns to shareholders, boosting its shares after reporting third-quarter earnings 8% better than expected. The bank also highlighted growth momentum and cost discipline but faces uncertainties in its investment banking business and regulatory issues in the retail sector.

Meta Platforms (NASDAQ:META) – Meta Platforms CEO Mark Zuckerberg has been focusing on artificial intelligence and cost reduction instead of investments in the metaverse. Advertising remains the primary revenue source, driving third-quarter sales estimates to $33.5 billion, with earnings of $3.61 per share. Meta is seeking efficiency and expects increased capital spending in 2024. Restrictive expenses could turn the “Year of Efficiency” into years of efficiency, but questions about AI-related costs and monetization are expected in the earnings conference call.