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Friday’s Wall Street Highlights: Applied Materials, ChargePoint, Amazon, Gap, IBM, and more

Fernanda T
Latest News
November 17 2023 02:45AM

U.S. index futures are up in pre-market trading on Friday, signaling an optimistic weekly close for the three major indexes, which are heading for their third consecutive week of gains.

At 06:04 AM, Dow Jones futures (DOWI:DJI) rose 76 points, or 0.22%. S&P 500 futures rose 0.20% and Nasdaq-100 futures rose 0.02%. The yield on 10-year Treasury bonds was at 4.393%.

In the commodities market, West Texas Intermediate crude oil for December rose 0.99%, to $73.62 per barrel. Brent crude for January rose 0.98% to near $78.18 per barrel. Iron ore with a concentration of 62%, traded on the Dalian exchange, fell 2.2%, to $130.96 per ton.

On the economic agenda this Friday, investors are waiting for new home construction data at 08:30 AM, and the Baker Hughes rig count at 1:00 PM. Throughout the day, speeches are expected from the President of the Chicago Fed, Austan Goolsbee, the President of the Boston Fed, Susan Collins, and the President of the San Francisco Fed, Mary Daly. Additionally, the U.S. Congress faces a midnight deadline to approve a federal spending measure.

European markets are optimistic, with a focus on healthcare stocks, while waiting for a speech from ECB President Christine Lagarde. Investors are monitoring new inflation data, following signs of a slowdown in the U.S. and UK. In the UK, retail sales fell 0.3% in October, defying expectations. Sales of fuels and food also declined. Eurozone inflation slowed significantly, with the annual rate falling to 2.9% in October. Inflation excluding energy, food, and beverages saw a slight reduction.

Hong Kong’s market led the declines in Asia-Pacific, highlighted by a nearly 10% drop in Alibaba’s (NYSE:BABA) shares. The Hang Seng index fell 2.12% and the Hang Seng Tech index declined 1.7%. Despite this, the Hang Seng is still expected to see weekly gains of 1.5%. Alibaba’s decision not to split its cloud group, impacted by U.S. chip export restrictions, influenced the market. Other Asian indexes varied: Shanghai SE rose 0.11%, Nikkei increased 0.48%, Kospi fell 0.74%, and ASX 200 decreased 0.13%.

At Thursday’s close, U.S. stocks had a modest performance, with the Dow closing slightly down, while the Nasdaq and S&P 500 saw small gains. A decline in Walmart’s (NYSE:WMT) shares negatively impacted the Dow, while gains in the Nasdaq and S&P 500 were driven by optimistic economic data, including a drop in U.S. import and export prices. Concerns about the job market persisted, with an unexpected increase in unemployment claims reported yesterday. Industrial production fell more than expected, and the energy sector suffered from falling oil prices.

On the corporate earnings front this Friday, investors will be watching reports from Yatra (NASDAQ:YTRA), BJ’s Wholesale (NYSE:BJ), Atkore (NYSE:ATKR), Spectrum Brands (NYSE:SPB), Twist Bioscience (NASDAQ:TWST), among others.

Wall Street Corporate Highlights for Today

Apple (NASDAQ:AAPL) – Apple plans to adopt the Rich Communication Services (RCS) standard next year, making communication between iPhones and Android devices easier. After resisting RCS, Apple has yielded to pressure from companies like Google (NASDAQ:GOOGL). RCS will allow high-quality photo and video sending and other advanced functionalities, improving interoperability with iMessage.

Meta Platforms (NASDAQ:META) – Meta Platforms introduced two AI features for video editing: Emu Video and Emu Edit. Emu Video creates four-second videos from captions, photos, or images, while Emu Edit allows for text-instructed video editing. These tools represent an advancement of the Emu model, which generates text-based images, reflecting Meta’s growing interest in AI.

IBM (NYSE:IBM) – IBM suspended its advertising on Elon Musk’s social media platform after a report revealed its ads appeared alongside content promoting Adolf Hitler and the Nazi Party. The decision follows Musk’s endorsement of an antisemitic post on the platform. IBM stated it has zero tolerance for hate speech and discrimination.

Amazon (NASDAQ:AMZN), Hyundai (USOTC:HYMLY) – Starting next year, Amazon will begin selling Hyundai cars online in the USA. Customers can select, customize, and purchase Hyundai vehicles directly on Amazon’s website and schedule delivery with a local dealership. This deal expands a prior partnership between the two companies and includes access to Amazon’s Alexa voice assistant in new Hyundai vehicles starting in 2025.

Alibaba (NYSE:BABA) – Alibaba Group’s shares fell 10% in Hong Kong after the company scrapped plans to split its cloud business due to U.S. export restrictions on semiconductors. The company’s U.S.-listed shares closed 9% lower on Thursday. The decline is the largest in over a year, significantly reducing the Chinese tech giant’s market value.

Starbucks (NASDAQ:SBUX) – Workers at hundreds of Starbucks stores in the USA went on strike on Red Cup Day, demanding better conditions and wages. Despite some store closures, the majority remained open. The event, usually a major traffic driver, faced protests from employees represented by the Workers United union, demanding better working conditions and criticizing recent wage increases as insufficient.

Applied Materials (NASDAQ:AMAT) – Shares of the semiconductor company fell more than 7%. According to Reuters, Applied Materials is under investigation by the Department of Justice on suspicions of circumventing export limitations imposed on Chinese semiconductor manufacturer SMIC.

General Motors (NYSE:GM) – General Motors’ provisional labor deal with the United Auto Workers was ratified, marking the first approval among Detroit automakers. In other news, following an accident that halted its operations, GM’s robotaxi unit Cruise suspended its employee stock buyback program. The company will reassess the program, which was interrupted due to delays in commercialization timelines and revenue generation. GM is also restructuring its BrightDrop electric commercial vehicle unit to more closely integrate it with the company and cut costs. BrightDrop’s CEO Travis Katz will leave the company, although the reason for his departure was not specified.

Toyota (NYSE:TM) – Redwood Materials sealed a long-term contract to supply Toyota with recycled materials for its electric vehicle battery factory in North Carolina, valued at $13.9 billion. Financial details were not disclosed. The company will recycle EV battery components, boosting its closed-loop battery ecosystem in the USA.

Apollo Global Management (NYSE:APO) – Panasonic (USOTC:PCRFY) agreed to sell part of its automotive systems unit in collaboration with Apollo Global Management. The transaction is part of the company’s strategy to restructure after becoming a holding company. The automotive unit accounted for about 15% of Panasonic’s sales in the last fiscal year.

Boeing (NYSE:BA) – Marc Allen will leave his position as Boeing’s chief strategy officer at the end of the year and exit the company in 2024. Boeing will restructure its strategy teams to work directly with business units. Brian West and Mike D’Ambrose will create a realignment plan. Additionally, Boeing announced a partnership with the U.S. government to address challenges in using sustainable aviation fuel (SAF) in the APEC region. SAF, crucial for reducing carbon emissions in aviation, is produced in small quantities and is more expensive than conventional fuel. Boeing will work with the government to identify raw materials and optimize production. The company has acquired 7.6 million gallons of SAF for its U.S. operations since 2022.

BP (NYSE:BP) – BP is seeking partners for offshore wind projects in Japan and considering investing in hydrogen technology. This is part of the company’s plan to expand into renewable energies and face challenges like inflation and equipment bottlenecks in the sector.

TotalEnergies (NYSE:TTE) – Environmental groups have called on financiers to withdraw support from TotalEnergies’ $20 billion LNG terminal in Mozambique, citing climate risks and human rights violations. The letter, supported by over 100 organizations, highlights the financiers’ responsibility.

Northrop Grumman (NYSE:NOC) – Northrop Grumman is considering producing 120mm ammunition in Poland in partnership with local company Mesko. Poland seeks to strengthen its defense, expanding its purchases of equipment, including Abrams tanks from the USA. Northrop plans to expand its business across Europe.

Freeport-McMoRan (NYSE:FCX) – Freeport-McMoRan’s CEO, Richard Adkerson, expressed optimism about improving relations between the USA and China, following talks between Joe Biden and Xi Jinping. However, Adkerson acknowledged significant issues still divide the two countries. He also highlighted Indonesia’s growing strategic importance in international relations.

Sasol (NYSE:SSL) – Sasol Ltd. had to cancel its annual general meeting due to environmental activists storming the stage, protesting the company’s carbon emissions. Some investors plan to reject Sasol’s climate resolutions, citing its unsatisfactory record on environmental goals.

Jacobs Solutions (NYSE:J) – Jacobs Solutions is in talks to merge its government segment, valued at over $4 billion, with Amentum Services Inc. The merger would create a new publicly traded company, predominantly owned by Jacobs shareholders, using the Reverse Morris Trust structure for tax exemption. The deal could be announced soon.

3M (NYSE:MMM) – 3M announced that its independent health business after the spin-off will be named Solventum. The division, planned for the first half of 2024, will retain a 19.9% stake from 3M and focus on wound care, oral hygiene, and health technology, generating about $8.4 billion in sales in 2022. Bryan Hanson was named CEO, and the name Solventum represents innovative solutions and rapid innovation.

Eli Lilly (NYSE:LLY) – Eli Lilly plans to build a $2.17 billion factory in Germany, responding to the need to produce essential health closer to markets. This is Lilly’s first major production complex in Germany, creating over 1,000 jobs, including related business impacts. The facility will produce diabetes medications and potentially obesity drugs, reflecting the growing demand for Lilly’s Mounjaro medication.

Merck (NYSE:MRK) – The Food and Drug Administration (FDA) approved Merck’s Keytruda medication for treating gastrointestinal cancers in adults, combined with chemotherapy, based on advanced trials that showed improvements in overall survival compared to chemotherapy alone. This is Keytruda’s seventh indication in the USA.

Walgreens Boots Alliance (NASDAQ:WBA) – Walgreens will close most of its stores and pharmacies on Thanksgiving Day for the first time, due to employee resistance to poor working conditions. CVS Health (NYSE:CVS) will also close non-24-hour pharmacies on the holiday.

Goldman Sachs (NYSE:GS) – Masanori Mochida, the president of Goldman Sachs’ Japanese unit, will retire after more than 30 years at the U.S. investment bank. His retirement decision was accelerated due to growing internal concern about the need for new leadership in Tokyo amidst competition with rival U.S. investment banks.

Citigroup (NYSE:C) – Geopolitical tensions and economic shocks are leading companies to diversify their supply chains, as highlighted by Citigroup CEO Jane Fraser. This follows events like the pandemic and Russia’s invasion of Ukraine. Additionally, the shift in globalization seeks more resilient supply chains and diversified trade relations. Fraser also praised regional free trade agreements. Furthermore, Citigroup confirmed it is following its restructuring plan, which runs until March. However, it did not comment on reports of job cuts supposedly to be announced daily in the coming days. CEO Jane Fraser promised additional details about the bank’s simplification in January.

Wells Fargo (NYSE:WFC) – U.S. regulators are pressing Wells Fargo to improve detection of criminal activities, focusing on its consumer monitoring systems. Following a scandal in 2016, compliance efforts face criticism, and a public penalty is still possible. The bank also faces charges related to an alleged Ponzi scheme, which it denies having knowledge of or assisting.

Santander (NYSE:SAN) – Santander issued $2.5 billion in tier 1 bonds, aligning with similar issuances by other European banks. These AT1 bonds act as safety buffers in case of drops in capital levels and can be converted into shares if the bank’s common tier 1 capital ratio falls below 5.125%.

BlackRock (NYSE:BLK)BlackRock has filed for a spot Ethereum ETF, the iShares Ethereum Trust, to be listed on Nasdaq, allowing investors direct access to ether without owning it. This move follows optimism in the cryptocurrency sector and the growing acceptance of such investments by the SEC.

Earnings

Applied Materials (NASDAQ:AMAT) – Applied Materials earned $2.12 per share in the fourth quarter on an adjusted basis, beating estimates of $2.00. Revenue also exceeded expectations. The company forecast first-quarter revenue above analysts’ estimates, but its shares fell more than 7% following news that the company is under criminal investigation in the U.S. for possible violations of chip export restrictions to China. The company expects revenue of $6.47 billion in the first quarter. The rules aim to stem the flow of U.S. technology that could be used to bolster China’s military and intelligence capabilities. CEO Gary Dickerson sees no additional material impact at this time.

Grab Holdings (NASDAQ:GRAB) – Grab announced its first adjusted core profit for the third quarter, driven by demand for its food delivery and ride-hailing services. Revenue increased 61% to $615 million, beating analyst estimates. The company now forecasts 2023 revenue in the range of $2.31 billion to $2.33 billion and lowered its full-year adjusted core loss forecast.

ChargePoint (NYSE:CHPT) – Shares of the electric vehicle charging network fell 22.5% after the company announced a restructuring of its top management. Rick Wilmer, who was the COO, was named ChargePoint’s new CEO, replacing Pasquale Romano effective November 16. At the same time, ChargePoint released preliminary third-quarter results, including a revenue forecast of between $108 and $113 million, below the $150 to $165 million previously estimated.

Dolby Laboratories (NYSE:DLB) – Dolby Laboratories issued a below-expectation earnings and sales forecast for the next fiscal year. The company forecast 2024 sales of about $1.3 billion, below estimates, and earnings per share of between $2.30 and $2.45, also below expectations. Fourth-quarter earnings per share fell short of estimates, but sales beat them, driven in part by Apple’s new iPhones that use Dolby technology.

Gap (NYSE:GPS) – Shares rose 17.8% in pre-market trading on Friday in response to the positive third-quarter results reported by the apparel company, exceeding expectations. Gap reported adjusted earnings of 59 cents per share on revenue of $3.77 billion. These numbers exceeded the forecasts of analysts consulted by LSEG, who estimated a profit of 19 cents per share and revenue of $3.60 billion.

Ross Stores (NASDAQ:ROST) – The clothing retailer rose 7.3% after beating estimates in the third quarter. Ross reported earnings of $1.33 per share on revenue of $4.92 billion, while analysts polled by LSEG were forecasting earnings of $1.22 per share on revenue of $4.85 billion.

Compass Minerals International (NYSE:CMP) – Compass Minerals released a report with a steeper-than-expected loss for the fourth fiscal quarter. Compass Minerals reported an adjusted loss of 6 cents per share, in contrast to the forecast of analysts surveyed by FactSet, which estimated a loss of 2 cents per share.