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Wall Street Highlights: Vroom Shuts Down Online Car Sales, Ericsson Warns of Decline Outside China, and More

Fernanda T
Latest News
January 23 2024 12:40AM

In Tuesday’s pre-market, U.S. index futures showed a slight negative trend. This movement follows a historic milestone where the Dow Jones surpassed the 38,000-point barrier for the first time.

At 05:09 AM, the Dow Jones futures (DOWI:DJI) fell 29 points, or 0.08%. S&P 500 futures retreated 0.05% and Nasdaq-100 futures fell 0.10%. The yield on 10-year Treasury bonds was at 4.128%. West Texas Intermediate crude for March fell 0.66%, to $74.27 per barrel. Brent crude for March retreated 0.61%, near $79.57 per barrel.

In the Asian market, Hong Kong stocks led the gains, boosted by a potential Chinese stimulus package. Meanwhile, Japan’s Nikkei 225 saw a slight decline after the Bank of Japan maintained its monetary policy. The Hang Seng Index rose nearly 3%, with technology stocks standing out. China’s CSI 300 also recovered, while Hong Kong’s video game stock market was positively affected by the removal of proposed regulations. Elsewhere in Asia, Australia’s S&P/ASX 200 and South Korea’s Kospi gained, but the small-cap Kosdaq index remained stable. In Singapore, inflation exceeded expectations, but monetary policy is expected to remain unchanged.

European markets are down, led by losses in the utilities sector. A negative highlight for Logitech (CHIX:LOGNZ), due to a reduction in sales. On the other hand, HelloFresh (TG:HFG) saw an increase after being fined for sending spam to customers with texts and emails.

On Monday, the US stock market closed higher, with major indexes reaching new records, driven by optimism about profit prospects. The Dow Jones reached a new high of 38,109.20, closing at 38,001.81, up 0.36%. The S&P 500 rose to 4,868.41, closing with a gain of 0.22% at 4,850.43. The Nasdaq reached 15,438.85, ending at 15,360.29, an increase of 0.32%. Highlights include Walt Disney (NYSE:DIS), United Health (NYSE:UNH), among others, with gains of up to 2.2%. Macy’s (NYSE:M) saw a jump of more than 3.5% after rejecting a takeover offer, while Home Depot (NYSE:HD) and Nike (NYSE:NKE) recorded declines.

For the quarterly earnings front this Monday, financial reports are scheduled to be presented by Verizon (NYSE:VZ), 3M (NYSE:MMM), General Electric (NYSE:GE), RTX (NYSE:RTX), Halliburton (NYSE:HAL), J&J (NYSE:JNJ), Lockheed Martin (NYSE:LMT), P&G (NYSE:PG), DR Horton (NYSE:DHI), among others, before market opening. After the close, balance sheets from Netflix (NASDAQ:NFLX), Intuitive Surgical (NASDAQ:ISRG), Texas Instruments (NASDAQ:TXN), Baker Hughes (NASDAQ:BKR), and more are awaited.

Wall Street Corporate Highlights for Today

Apple (NASDAQ:AAPL) – Apple paid a fine of $13.65 million for alleged abuse of its position in the app payment market, according to the Russian antitrust agency FAS. The company had previously disagreed with the FAS decision but made the payment in January 2024. Russia has maintained disagreements with foreign technology companies, especially after the conflict in Ukraine in 2022, leading Apple to halt sales and limit its Apple Pay service in the country.

Meta Platforms (NASDAQ:META) – Meta Platforms, owner of Instagram and Facebook, will offer users in Europe more options for sharing information between its services to comply with the European Union’s Digital Markets Act. This includes the choice to link or separate accounts on Facebook Messenger and manage information between Facebook, Instagram, and Gaming and Marketplace services. These changes aim to meet the new rules of the EU by March 7, following in the footsteps of Google.

Alphabet (NASDAQ:GOOGL) – Alphabet’s Moonshot X Lab is laying off employees and seeking external funding for its projects. X is restructuring to allow its projects to operate as independent startups with support from Alphabet and external investors, while facing pressure to turn bold projects into profitable businesses.

Amazon (NASDAQ:AMZN) – Amazon was fined $34.9 million by the French data protection authority (CNIL) for implementing an intrusive employee monitoring system, which includes activity and performance scanners. The CNIL claimed the system was overly intrusive and lacked adequate security in video surveillance. Amazon contested the findings and reserved the right to appeal.

Netflix (NASDAQ:NFLX) – Netflix’s head of movies, Scott Stuber, will leave the company in March to start his own media company. There is no named replacement. Stuber was instrumental in expanding Netflix’s original films and established relationships with notable filmmakers, contributing to the studio’s success at the Oscars. His new venture will also produce projects for Netflix.

Ericsson (NASDAQ:ERIC) – Ericsson faces challenges with declining demand for 5G equipment from mobile carriers, despite beating profit expectations in the fourth quarter, driven by software sales. In the October-December quarter, Ericsson’s operating profit excluding restructuring fell to 7.37 billion crowns, exceeding expectations. The EBIT margin excluding restructuring rose from 9.4% to 10.3%, while net sales fell 16% to 71.9 billion Swedish crowns, below estimates. Ericsson predicts that its market outside China will continue to decline in 2024, due to low investments by carriers. Additionally, Ericsson appointed Lars Sandstrom as its new CFO, replacing Carl Mellander. Sandstrom will take up the position on April 1, based in Sweden.

Salesforce (NYSE:CRM) – Salesforce’s shares have risen 85% in the past 12 months, but Morgan Stanley analyst Keith Weiss believes there is still more upside potential. He rated the shares as his top pick, predicting a 25% increase. The rise in profitability profile and long-term revenue growth prospects are expected to drive the stock’s valuation. Salesforce shares are currently trading at about a 57% discount compared to other large-cap companies, reinforcing the view of a good risk-reward. The target price set is $350 per share.

Intuit (NASDAQ:INTU) – The FTC banned Intuit, maker of TurboTax, from labeling its services as “free” when many consumers were not eligible, citing deceptive practices. Intuit will appeal the decision, stating it does not expect a significant impact on the business. In May 2022, Intuit agreed to pay $141 million in restitution to settle deception claims across all 50 U.S. states and Washington, DC. The settlement required Intuit to suspend misleading advertisements about “free” products.

Tesla (NASDAQ:TSLA) – Tesla is set to report quarterly results on Wednesday, while facing challenges with lower prices and production disruptions at the Berlin factory. A marginal increase in profit margins is expected due to lower battery material prices, but cost pressures increase with the Cybertruck. Investors are also awaiting delivery targets and are concerned about Elon Musk’s control over the company. According to The Paper, a comprehensive tour across China, highlighting the Cybertruck, Tesla’s flagship vehicle, is scheduled to start at the end of January.

Vroom (NASDAQ:VRM) – Vroom, which once had a valuation of $2.5 billion, announced it is ending its online used car sales business to preserve liquidity, as its market value fell to less than $100 million. The company will now focus on its auto finance and digital analytics for auto retail businesses. Its shares fell about 55% in pre-market trading on Tuesday following the announcement.

Boeing (NYSE:BA) – Boeing and its Seattle machinists union postponed contract negotiations to March due to the grounding of the 737 MAX 9. Formal negotiations scheduled for February were postponed at Boeing’s request, which is under investigation following the explosion of a cabin panel on an Alaska Airlines MAX 9 plane.

Ryanair (NASDAQ:RYAAY) – Ryanair plans to open five new bases in Spain and increase its passenger traffic in the country by 40% by 2030, aiming to reach 77 million passengers, but depends on competitive airport tariffs. The company is investing due to the prospect of an increase in fees until 2026-2027. Group CEO Michael O’Leary pledged to invest $5.44 billion in Spain over the next seven years after a meeting with Prime Minister Pedro Sanchez.

United Airlines (NASDAQ:UAL) – United Airlines reported an adjusted profit of $2 per share for the fourth quarter, beating Wall Street estimates, while forecasting an adjusted profit of $9 to $11 per share in 2024, exceeding analysts’ expectations. However, it warned of an adjusted loss in the first quarter due to the grounding of Boeing 737 MAX 9 planes, which represents about 3 percentage points in non-fuel operating costs during that period.

Intuitive Machines (NASDAQ:LUNR) – Space exploration company Intuitive Machines announced its next launch of the United States’ first commercial lunar module, scheduled for next month. The goal is to become the first private U.S. probe to land on the Moon and conduct reconnaissance missions. The launch will take place on a SpaceX Falcon 9 rocket, and the probe will carry NASA payloads and conduct scientific studies on the Moon. This is part of NASA’s Artemis program, aiming to return American astronauts to the Moon.

Sanofi (NASDAQ:SNY) – Sanofi agreed to buy the drug development project INBRX-101 from Inhibrx Inc (NASDAQ:INBX) for about $2.2 billion to strengthen its rare disease business. Inhibrx shareholders will receive cash, a contingent value right, and shares of New Inhibrx. The acquisition aims to expand Sanofi’s research and development and follows a strategic shift by its CEO. New Inhibrx will continue to operate under the name “Inhibrx,” with Sanofi maintaining an 8% stake.

Choice Hotels (NYSE:CHH) – Choice Hotels proceeded with a hostile $8 billion offer for Wyndham Hotels & Resorts, naming a slate of directors to replace Wyndham’s board. The dispute involves Wyndham’s earlier rejection of the offer, citing antitrust concerns and excessive debt. Choice is confident in obtaining antitrust approval, while Wyndham maintains that the deal could trigger prolonged scrutiny and loss of franchisees.

Marriott International (NASDAQ:MAR), Hilton (NYSE:HLT), Hyatt Hotels (NYSE:H) – Marriott International reported that the company increased its hotel room presence in 2023, with a growth of 4.7%, reaching almost 1.6 million rooms, and a record development pipeline of 573,000 rooms. Hilton opened 132 hotels and 24,000 rooms in the fourth quarter, marking its strongest development quarter in its 99-year history. Hilton reiterated its net unit growth estimate of 5.5% to 6% in 2024. Hyatt Hotels also announced a record in hiring and development pipeline, with 127,000 rooms.