Wall Street Highlights: Google Rejects Union Negotiations, Exxon Mobil Announces $2.5 Billion Accounting Write-Down in California

U.S. index futures are registering a decline in pre-market trading this Friday, anticipating a crucial report on the job market as Wall Street seeks to overcome a lukewarm start to January. The three major indices are set to end nine consecutive weeks of gains, with the Nasdaq facing the biggest weekly drop, down 3.3%.

At 05:27 AM, Dow Jones (DOWI:DJI) futures fell 89 points, or 0.24%. S&P 500 futures fell 0.26% and Nasdaq-100 futures fell 0.38%. The yield on 10-year Treasury bonds was at 4.038%.

In the commodities market, West Texas Intermediate crude for February rose 0.93%, to $72.86 per barrel. Brent crude for March rose 0.70%, near $78.13 per barrel. Iron ore with a concentration of 62%, traded on the Dalian exchange, fell 1.53%, to $139.33 per metric ton.

On Friday’s economic agenda, investors await, at 08:30 AM, the number of jobs created or lost by the economy (payroll) and the unemployment rate for December. The ISM Index of December service sector activity will be published at 10:00 AM by ISM. November factory orders will be published at 10:00 AM by the Commerce Department.

European markets are performing negatively, with the Stoxx 600 falling 0.9%. The retail sector led the losses, with German retail shares falling more than expected in November. Inflation in the eurozone rose to 2.9% annually in December. In the UK, house prices rose 1.7% in 2023, defying expectations of a decline.

Asia-Pacific markets had a mixed week, with declines in most indices, including Hong Kong’s Hang Seng and South Korea’s Kospi. Inflation in the Philippines slowed, while Japan’s PMI for services signaled stabilization in private sector activity. Japan’s Nikkei 225 index rose 0.3% on Friday.

In Thursday’s trading, U.S. indices had mixed performance, with the Nasdaq and S&P 500 ending lower, while the Dow Jones closed slightly higher. The Nasdaq fell 0.34% and the S&P 500 also recorded a decline of 0.34%. The Dow rose 0.03%, despite Walgreens (NASDAQ:WBA) shares plummeting due to dividend cuts. U.S. employment data ruled out the possibility of an interest rate cut in March, resulting in a negative reaction in the markets. This led to an increase in interest rates and a fall in U.S. government bonds, also affecting the country’s main stock indices. The Nasdaq performed weaker compared to the S&P, recording its fifth consecutive decline, with accumulated losses of 4% since December 28. Apple (NASDAQ:AAPL) shares also fell due to concerns about iPhone sales.

Wall Street Corporate Highlights for Today

Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL) – Microsoft is closing in on Apple in market value, with a capitalization of about $2.73 trillion compared to Apple’s $2.83 trillion. Microsoft has performed slightly better in stocks in 2023 and is driven by continued growth in Azure and artificial intelligence. Meanwhile, Apple faces challenges with competition in China and macroeconomic pressures. The market value gap between the two companies has not been this small since November 2021. Apple’s shares have fallen 5.5% so far in 2024 and closed lower for four consecutive days.

Apple (NASDAQ:AAPL), Disney (NYSE:DIS) – The U.S. Securities and Exchange Commission (SEC) decided that Apple and Disney cannot avoid shareholder votes on the use of artificial intelligence. The AFL-CIO, the largest union federation in the U.S., submitted similar proposals at four other tech companies. The SEC believes these proposals transcend common business issues.

Alphabet (NASDAQ:GOOGL) – Google, owner of YouTube, violated U.S. labor law by refusing to negotiate with the union representing YouTube Music contracted workers, according to the National Labor Relations Board (NLRB). The agency rejected Google’s claims that it should not be considered an employer of these workers and, therefore, would not need to negotiate with the union. The decision implies that Google must negotiate with the Alphabet workers’ union.

Thermo Fisher Scientific (NYSE:TMO) – Thermo Fisher Scientific decided to cease the sale of forensic technology and equipment in Tibet, after offering human identification (HID) technology used to track criminals. The company did not explain the reasons behind the decision, which follows a similar restriction in Xinjiang in 2019. Some shareholders welcomed the move, citing concerns about human rights violations.

Brookfield Asset Management (NYSE:BNH), American Tower Corp (NYSE:AMT) – Brookfield Asset Management will acquire the loss-making Indian operations of American Tower Corp for $2.5 billion, becoming the largest telecom tower operator in India. ATC will exit India after almost 17 years, while Brookfield positions itself to manage the challenges faced by ATC due to high exposure to Vodafone Idea. India is experiencing an increase in data demand and the implementation of 5G.

Nokia (NYSE:NOK) – Nokia signed a 5G patent agreement with Honor, a Chinese smartphone manufacturer. However, Nokia is still involved in legal disputes with other Chinese manufacturers, such as Oppo and Vivo, over 4G and 5G patents. Patent licensing revenues accounted for 39% of Nokia’s operating profit in 2022. In December, Nokia stated it would not meet its financial targets for 2023 due to ongoing discussions on renewing patent licenses.

Verizon Communications (NYSE:VZ) – Analyst Peter Supino of Wolfe Research upgraded Verizon Communications to an Outperform from Peer Perform, highlighting confidence in industrial economy stability and underestimation. He believes Verizon will see declining capital expenses and leverage, as well as potential sales increases and improved execution, offering an attractive picture for investors.

Microchip Technology (NASDAQ:MCHP) – The U.S. Department of Commerce plans to grant $162 million in subsidies to Microchip Technology to increase semiconductor and microcontroller unit production in the U.S. This funding will allow Microchip to triple its production, helping to reduce dependence on global supply chains and strengthen U.S. national and economic security.

Qualcomm (NASDAQ:QCOM) – Qualcomm announced the Snapdragon XR2+ Gen 2 chip designed for mixed and virtual reality headsets. Samsung and Google (NASDAQ:GOOGL) plan to use the chip but did not specify in which products it will be used. The mixed reality headset market is heating up, with Apple launching its Vision Pro headset soon.

Ford Motor (NYSE:F) – Ford Motor recorded its best annual vehicle sales in the United States since 2020, with 1.99 million units sold in 2023, an increase of 7.1%. Crossover SUVs and pickups drove demand, while electrified vehicles accounted for nearly 17% of total sales. Ford ranked third in U.S. sales, behind General Motors (NYSE:GM) and Toyota (NYSE:TM).

Tesla (NASDAQ:TSLA) – Tesla’s aggressive real-time management strategy of its stores in China is boosting its edge over dealerships like BYD in the world’s largest automotive market. Tesla sold more than 1,500 electric vehicles on average per store in the first 10 months of 2023, while BYD sold fewer than 600. Although facing increasing competition, limited production capacity, and the need to improve margins, Tesla maintains its strong position. Additionally, Tesla is conducting a recall of 1.62 million vehicles in China, including S, X, 3, and Y models, following two recalls in the U.S. The automaker will remotely update the software to prevent misuse of the Autosteer function and correct door issues in some vehicles.

Fisker (NYSE:FSR) – Electric vehicle manufacturer Fisker plans to add up to 50 partner dealerships in the U.S., Canada, and Europe to expand its sales and delivery network. The company, which has so far followed a direct-to-consumer model, plans to ship its first Ocean vehicles to new dealerships by the end of the first quarter.

Mobileye Global (NASDAQ:MBLY) – Autonomous technology company Mobileye Global warned on Thursday that a reduction in customer orders will result in weaker results in 2024 due to an oversupply of automotive chips. Its shares plummeted in response, indicating that the automotive chip industry may face a slowdown.

QuantumScape (NYSE:QS) – QuantumScape registered an increase in pre-market trading, following a 43% gain the previous day. Volkswagen, through its battery subsidiary PowerCo, announced that QuantumScape’s solid-state battery cell demonstrated significantly better performance than expected in tests, successfully completing over 1,000 charging cycles. This points to advances in technology that could result in more affordable batteries, faster charging, and greater range.

Phillips 66 (NYSE:PSX) – Phillips 66 is in active discussions to sell non-core assets, as part of its plan to monetize $3 billion in non-core assets in 2024. There is no fixed timeline for sales, and CEO Mark Lashier stated that it will be determined by the value offered for these assets. The company seeks to increase returns and cut costs after a period of underperformance compared to rivals in the refining industry. The CEO also expressed optimism about the long-term prospects of the CP Chemical joint venture with Chevron (NYSE:CVX).

Exxon Mobil (NYSE:XOM) – Exxon Mobil announced it will take a writedown of about $2.5 billion on assets in California in the fourth quarter due to regulatory challenges. Lower energy prices also affected operating profits, which could fall about 30% compared to the previous year. The company will also take a goodwill impairment of about $250 million in its chemicals business.

SolarEdge (NASDAQ:SEDG) – The U.S. solar industry will see modest growth in 2024, according to SolarEdge’s chief financial officer, due to falling electricity prices and support from the Inflation Reduction Act. Demand is expected to increase with anticipation of lower interest rates and improvements in tax incentives. Battery installation is also expected to continue growing.

RTX (NYSE:RTX) – Industry veteran Phil Jasper will take over as president of RTX’s Raytheon unit after Wesley Kremer’s retirement at the end of the first quarter. The change comes as Raytheon benefits from growing demand for its equipment due to the war in Ukraine. Since the Russian invasion in 2022, RTX has received $3 billion in orders related to the conflict.

United Parcel Service (NYSE:UPS), FedEx (NYSE:FDX) – India’s antitrust body is investigating global delivery companies, including DHL, UPS, and FedEx, on suspicion of collusion in discounts and tariffs. The investigation, initiated in October 2022, alleges that these companies jointly controlled prices and discounts, possibly violating Indian antitrust laws. The companies are cooperating but deny the allegations.

AMC Entertainment (NYSE:AMC) – AMC Entertainment’s shares fell 5% on Thursday to $5.30, hitting another record low and ending a four-day losing streak. The stock price is far below its peak during the meme stock craze, when it reached $339.05 in June 2021. AMC recently issued shares to tackle its debt of over $5 billion and faces liquidity challenges.

Costco (NASDAQ:COST) – Costco reported a 9.9% increase in December sales, totaling $26.15 billion, driven by e-commerce, with sales in the 17 weeks to December 31 reaching $82.86 billion, an increase of 5.9%. Same-store sales in December increased 8.5%, with a 5.2% increase in the 17 weeks. Online sales in December grew by 17.7%.

Carrefour (EU:CA), PepsiCo (NASDAQ:PEP) – Carrefour informed customers in France, Italy, Spain, and Belgium that it will no longer sell PepsiCo products, such as Pepsi, Lay’s, and 7up, due to price increases deemed unacceptable. This decision affects over 9,000 stores and represents two-thirds of the retailer’s global presence. Retailers in various countries have halted orders from food companies due to inflation concerns.

Conagra Brands (NYSE:CAG) – Conagra Brands lowered its forecasts for organic net sales growth and annual profit, due to a slower recovery in demand for packaged meals and snacks. The company faces its tenth consecutive quarter of volume decline and is increasing marketing and advertising spending in some categories. Conagra also plans to lower prices in some categories to stimulate demand.

Kura Sushi (NASDAQ:KRUS) – In the first quarter, Kura Sushi USA, a Japanese restaurant chain, reported a per-share loss of 18 cents, beating analysts’ expectations of a 10-cent loss. Comparable restaurant sales increased 3.8%, exceeding estimates, while total sales reached $51.5 million, surpassing expectations. The company projects sales between $239 million and $244 million for the fiscal year 2024.

McDonald’s (NYSE:MCD) – McDonald’s CEO Chris Kempczinski reported that the Israel-Hamas conflict and misinformation have harmed its business in some Middle East markets and beyond, due to boycott actions based on misconceptions about the company’s stance.

Amer Sports – Amer Sports, a tennis racket manufacturer and owner of sports brands like Wilson, revealed a 30% revenue increase in the first nine months of 2023. The company plans to conduct an initial public offering (IPO) in the U.S., capitalizing on the recovery of the IPO market. Amer Sports owns iconic brands like Arc’teryx, Salomon, and Atomic, in addition to the famous tennis racket brand Wilson. Its IPO is awaited at a time when investor sentiment is recovering and the IPO market looks more promising after a difficult period.

Citigroup (NYSE:C) – Citigroup plans to launch its investment banking unit in China by the end of 2024, expanding its market presence. The bank is also in active discussions to sell non-core assets as part of its efforts to increase returns.

BlackRock (NYSE:BLK) – BlackRock named Leigh Farris as its Global Head of Corporate Communications, bolstering its position amidst pressure related to socially and environmentally conscious capitalism. She will succeed Jim Badenhausen and will join in March.

Berkshire Hathaway (NYSE:BRK.B), Liberty (NASDAQ:LSXMA), SiriusXM (NASDAQ:SIRI) – Berkshire Hathaway acquired 2.8 million shares of Liberty SiriusXM tracking stock to capitalize on the discount relative to Sirius XM Holdings’ stake. Berkshire Hathaway paid about $82 million, raising its stake to about 20%. The investment is seen as managed by Ted Weschler, not Warren Buffett. Liberty and Sirius XM announced a deal in December to combine the tracking stock with Sirius XM Holdings. The discount is about 35%, with expectations for the gap to narrow as the transaction approaches, but remains wide due to challenges in trading Sirius XM stock and short selling.

Walgreens Boots Alliance (NASDAQ:WBA) – Walgreens Boots Alliance’s dividend cut could hasten its exit from the Dow Jones Industrial Average. The company is seen as vulnerable to removal due to its low stock price and market cap. Walgreens’ shares fell after announcing a 48% dividend cut.

AlloVir (NASDAQ:ALVR) – AlloVir announced a reduction of about 95% in its workforce following the termination of three clinical trials related to its lead T-cell therapy, posoleucel. The goal is to preserve capital, with the layoffs primarily planned for the first quarter of 2024. The company expects charges of about $13 million for severance and other benefits. Shares are up 4.3% in Friday’s pre-market.

Fusion Pharmaceuticals (NASDAQ:FUSN) – Fusion Pharmaceuticals, a clinical-stage oncology company, announced FDA approval for a phase 2/3 protocol and development plan for FPI-2265 treatment targeting certain prostate cancers.

Eli Lilly (NYSE:LLY) – Eli Lilly launched LillyDirect, offering streamlined access to treatments, including weight loss medications. The site provides disease management resources and facilitates access to healthcare providers and direct delivery of certain Lilly medications. The company aims to improve patient experience and outcomes.

Novo Nordisk (NYSE:NVO) – Novo Nordisk announced research collaborations with U.S. biotech companies Omega Therapeutics and Cellarity Inc. These partnerships aim to develop new treatments for obesity and MASH liver disease. Novo will reimburse research and development costs, and the agreements could pay up to $532 million in upfront payments and commercial milestones, plus royalties on sales.

Peloton Interactive (NASDAQ:PTON) – Peloton Interactive partnered exclusively with TikTok to bring its workout content to the short-video platform. The company is focusing on software and content to drive subscriber growth, as demand for connected home fitness equipment has waned post-pandemic peak. This partnership marks Peloton’s first collaboration outside its own channels.

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