WFC Wells Fargo and Company

In the pre-market on Friday, U.S. index futures experienced declines, reflecting investors’ reactions to lower-than-expected sales forecasts by giants such as Intel (NASDAQ:INTC) and Tesla (NASDAQ:TSLA), announced on Thursday. The market is also anticipating the release of the Personal Consumption Expenditures price index deflator, which is the inflation indicator most closely monitored by the Federal Reserve.

At 05:48 AM, Dow Jones futures (DOWI:DJI) fell by 61 points, or 0.16%. S&P 500 futures dropped 8 points, or 0.16%, and Nasdaq-100 futures declined by 96 points, or 0.54%. The yield on 10-year Treasury bonds was at 4.11%.

In the commodities market, West Texas Intermediate crude for March fell by 0.87% to $76.69 per barrel. Brent crude for March dropped by 0.58% to around $81.95 per barrel. Iron ore with a 62% concentration, traded on the Dalian exchange, fell by 0.10% to $139.49 per metric ton.

At 08:30 AM, today’s economic agenda features the release of the PCE index by the Commerce Department. Simultaneously, data on personal income and spending for November will be unveiled. Later, at 10:00 AM, the National Association of Realtors will announce December’s pending home sales.

Asian markets closed on Friday without uniformity, reflecting the influence of both external and internal factors. In Hong Kong, the Hang Seng index fell by 1.60%, dragged down by shares of electric vehicle manufacturers like BYD, XPeng (NYSE:XPEV), and Li Auto (NASDAQ:LI), which faced declines after Tesla’s (NASDAQ:TSLA) recent quarterly report. Meanwhile, mainland China’s market showed a mixed stance, with investors exercising caution and awaiting new economic stimulus measures from the government, following recent initiatives to revitalize the banking and real estate sectors.

European markets are trading higher, defying the downward trend observed in the U.S. pre-market. This optimism was fueled by a positive report from the world’s leading luxury conglomerate, indicating that consumption among the wealthier remains strong. The Stoxx 600 index was a highlight, appreciating after a significant increase in shares of LVMH, the biggest rise since March 2022. This jump occurred after LVMH (EU:MC), known for brands like Louis Vuitton and Dior, announced a 10% growth in its sales for the last quarter.

The US stock market closed higher on Thursday after a volatile start, with the Dow and S&P 500 setting new records. Buoyed by a positive economic report, stocks rallied, reflecting strong GDP growth and slowing inflation, fueling hopes for a more accommodative monetary policy. The Dow Jones rose 0.64% to 38,049.13 points. The S&P increased by 0.53% to 4,894.16 points, and the Nasdaq advanced 0.18% to 15,510.50 points.

For this Friday’s quarterly earnings front, financial reports are scheduled from American Express (NYSE:AXP), Colgate-Palmolive (NYSE:CL), Autoliv (NYSE:ALV), Norfolk Southern (NYSE:NSC), First Citizens Bancshares (NASDAQ:FCNCA), among others.

Alphabet (NASDAQ:GOOGL) – Alphabet’s Google Cloud has partnered with the startup Hugging Face to simplify the development of artificial intelligence (AI) software on its platform. The partnership will allow developers to access Hugging Face’s open-source AI software repository through Google Cloud’s technical infrastructure, further boosting personalized AI development.

Microsoft (NASDAQ:MSFT) – On Thursday, Microsoft’s shares closed at $404.87, reaching a market capitalization above $3 trillion, becoming the second US public company to reach this mark, behind Apple (NASDAQ:AAPL). However, Apple still leads with a valuation of $3.01 trillion. Microsoft reached $1 trillion in 8,351 days, $2 trillion in 543 sessions, and now $3 trillion in 650 days. The company continues to focus on areas such as artificial intelligence, Azure, and gaming to drive its growth in 2024. Fiscal second-quarter results will be announced on Tuesday. In other news, Microsoft plans to lay off 1,900 employees from its gaming division. These cuts represent about 8% of Microsoft’s overall gaming division and come after mass layoffs in the tech industry in 2024.

Meta Platforms (NASDAQ:META) – Meta is implementing additional measures to protect teenagers from unsolicited direct messages on Instagram and Facebook. Teenagers will not receive direct messages from non-followers by default and will need parental approval to change app settings. On Messenger, users under 16 and under 18 in some countries will only receive messages from Facebook friends or people they have phone connections with. Adults over 19 will not be able to send messages to teenagers who do not follow them. These measures aim to enhance the safety of young users amid concerns about harmful content and online harassment.

Amazon (NASDAQ:AMZN) – Amazon Web Services (AWS) plans to invest $10 billion in two data center complexes in Mississippi to meet the growing demand for cloud services amid AI expansion. AWS is keeping pace with competition, including Google (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT), in expanding its cloud infrastructure to meet the increasing needs of businesses. The project will also create at least 1,000 jobs in the state.

Alphabet (NASDAQ:GOOGL), Amazon.com (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT) – Alphabet, Amazon, and Microsoft are being investigated by the US Federal Trade Commission (FTC) for their investments and partnerships with AI startups Anthropic and OpenAI. The FTC seeks to understand how these actions impact competition in the tech industry, focusing on investments totaling over $19 billion. The investigation reflects concerns about the tech giants’ influence on AI startups and the potential formation of a highly consolidated market.

Intel (NASDAQ:INTC) – Intel forecasts first-quarter revenue of $12.2 billion to $13.2 billion, below market estimates of $14.50 billion. The expected profit is 13 cents per share, compared to the expected 33 cents per share. In the fourth quarter, Intel exceeded expectations by reporting revenue of $15.4 billion, with a profit per share of $0.54. The gross margin was 48.8%. CEO Pat Gelsinger stated that Intel’s projection is being impacted by challenges faced in the company’s programmable chips division and its autonomous driving business unit. Shares are down 12% in Friday’s pre-market.

Western Digital (NASDAQ:WDC) – Western Digital reported a larger-than-expected adjusted quarterly loss due to structural changes in its flash memory and HDD businesses. The company also faced underutilization charges. Shares fell 5.7% in Friday’s pre-market. The quarter’s revenue was $3.03 billion, below analysts’ estimates of $3.39 billion. The company expects adjusted earnings for the current quarter to range from a loss of $0.10 to a profit of $0.20 per share.

Salesforce (NYSE:CRM) – Salesforce is eliminating about 700 jobs, approximately 1% of its global workforce, as part of workforce adjustments. Although it still has 1,000 open positions, this move reflects a trend of job cuts in the tech industry following significant hiring during the pandemic. Last year, the company had already reduced its workforce by 10% to optimize operations and improve financial results.

PayPal (NASDAQ:PYPL) – PayPal is launching new AI-based products, including a platform that uses AI to help merchants reach new customers based on their purchase history. CEO Alex Chriss seeks to revitalize the company and promote revenue growth.

Paramount Global (NASDAQ:PARA) – Paramount plans to make job cuts as it seeks to become a leaner and more efficient organization in response to challenges faced by the entertainment industry, including a weak advertising market and the transition to streaming. CEO Bob Bakish did not specify how many jobs would be cut but emphasized focusing on powerful franchises and fewer local and international originals. The tech industry has also faced recent layoffs, reflecting economic pressure across various sectors.

Comcast (NASDAQ:CMCSA) – Comcast reported a 2.3% revenue growth, totaling $31.25 billion in the fourth quarter, exceeding estimates. The adjusted earnings per share of 84 cents surpassed the expected 79 cents by LSEG. Revenue was $31.25 billion, in contrast to the predicted $30.51 billion. Despite losing 34,000 broadband customers, the streaming service Peacock saw a 56.5% increase in revenue compared to the previous year, reaching $1.03 billion. The company increased its dividend by $0.08, to $1.24 per share on an annualized basis for 2024.

STMicroelectronics (NYSE:STM) – The European chipmaker STMicroelectronics forecasted a more than 15% drop in first-quarter revenue, reaching $3.6 billion, due to weaker automotive demand and a decline in industrial orders. The company reported fourth-quarter net revenue of $4.28 billion, slightly below analysts’ expectations.

Tesla (NASDAQ:TSLA) – Tesla’s shares fell by over 12% on Thursday after CEO Elon Musk predicted slower sales growth due to price cuts and technological challenges. This resulted in an $80 billion loss in market value, totaling about $210 billion for the month. Elon Musk, Tesla’s CEO, expressed concern over the rise of Chinese electric vehicle manufacturers, stating that they could dominate the global market without trade barriers. BYD, backed by Warren Buffett, surpassed Tesla in sales in the last quarter, despite the American company’s price cuts. However, reputation and quality remain challenges for Chinese manufacturers in the US and European markets.

General Motors (NYSE:GM), Honda (NYSE:HMC) – GM and Honda have begun delivering fuel cell systems near Detroit, a test for hydrogen technology. Initial production is small, with Honda aiming for 2,000 units annually by mid-decade. The fuel cells will be used in their CR-V sports utility vehicle and other products, including power generators. GM plans to supply systems to commercial truck manufacturers and heavy equipment makers. Other automakers are also pursuing fuel cell technology as an alternative to diesel.

General Motors (NYSE:GM) – GM’s autonomous vehicle unit, Cruise, is under investigation by the US Department of Justice and the SEC due to an accident in October, in which one of Cruise’s autonomous vehicles hit a pedestrian and dragged them for a distance of 6 meters. Cruise promises to reform its culture after a “leadership failure” related to the incident.

Boeing (NYSE:BA) – Problems with Boeing’s 737 MAX jets are affecting the aerospace industry’s plans for 2024, due to regulations following an incident in January. This concerns airlines and suppliers, potentially delaying deliveries and impacting production. Boeing is under scrutiny and plans to increase production of the 737 MAX to compete with Airbus. However, the FAA’s decision may impact future plans.

Southwest Airlines (NYSE:LUV) – Southwest Airlines will reduce deliveries of the Boeing 737 MAX due to supply chain challenges and uncertainty in the MAX 7 certification. Southwest expects to receive 79 aircraft this year, compared to the previous estimate of 85. United Airlines also plans a fleet without the MAX 10.

Gol (NYSE:GOL) – Brazilian airline Gol has filed for Chapter 11 bankruptcy protection in the United States due to debt and challenges faced by the pandemic and delays in Boeing deliveries. The company will receive financing from bondholders of the Abra Group, seeking to deleverage and face the aviation crisis.

Visa (NYSE:V) – Visa exceeded profit estimates, recording an adjusted profit of $2.41 per share, surpassing analysts’ expectations of $2.34. The company predicted a “mid to high single-digit” increase in net revenue for the second quarter, compared to 11% growth in the same period of 2023. In the first quarter, there was an 8% increase in payment volume in constant currency terms, and cross-border volume, excluding transactions in Europe, which is an indicator of international travel demand, recorded a 16% increase. Visa’s shares fell 3.2% in Friday’s pre-market.

Wells Fargo (NYSE:WFC) – Wells Fargo announced it has increased the total compensation of its CEO, Charles Scharf, to $29 million in 2023, including a base salary of $2.5 million and variable compensation of $26.5 million, demonstrating confidence in Scharf’s leadership in transforming the bank.

JPMorgan Chase (NYSE:JPM) – JPMorgan Chase conducted an executive reorganization in its investment and consumer banking units, appointing Marianne Lake as the sole CEO of the consumer division. Jennifer Piepszak became co-CEO of the commercial and investment bank following a merger with Troy Rohrbaugh. These changes may influence succession plans for CEO Jamie Dimon.

Bank of America (NYSE:BAC) – Bank of America is distributing about $800 million in restricted stock to most of its employees, including those with annual salaries up to $500,000. This is part of efforts to retain talent while controlling expenses, with the bank paying similar premiums since 2017, totaling more than $4.8 billion. Some employees will also receive cash awards based on salary and location criteria. The bank is distributing shares for the seventh year, despite a lower fourth-quarter profit due to extraordinary charges and a drop in interest revenues.

Capital One Financial (NYSE:COF) – Capital One Financial (COF.N) announced a 43% drop in fourth-quarter profit, recording a net income of $706 million, or $1.67 per share, compared to $1.23 billion, or $3.03 per share, in the same period last year. The company increased its provisions for credit losses to $2.86 billion, compared to $2.42 billion the previous year. Capital One’s net interest income rose 4% to $7.52 billion during the quarter. Additionally, it recorded a $289 million charge related to replenishing the FDIC’s deposit insurance fund.

Raymond James Financial (NYSE:RJF) – Raymond James Financial achieved impressive results at the end of 2023, with assets under administration of $1.37 trillion and assets under management of $215 billion, representing year-over-year increases of 17% and 16%, respectively. The company reported an adjusted net income of $514 million in the fiscal first quarter, exceeding estimates, and reached a record earnings per share of $2.40. The private client group generated $21.6 billion in new net assets in the quarter, demonstrating its solid retention and recruitment of financial advisors.

Blackstone (NYSE:BX) – Blackstone exceeded Wall Street expectations with a profit of $1.11 per share in the last quarter of 2023, a 4% increase from the same period the previous year. However, the annual profit fell 24% to $3.95 per share. The company managed over $1 trillion in assets, a 3% increase from the previous quarter and 7% from 2022. Despite the solid performance, the company needs to accelerate asset gathering to boost its fee revenue and faces challenges in the real estate area. The company is seeking about $250 million in private debt from direct lenders to finance its acquisition of Rover Group for $2.3 billion. Negotiations are ongoing, with financing terms subject to potential changes.

Nomura (NYSE:NMR) – Nomura projected a 100 basis-point cut in the US Federal Reserve’s interest rate in 2024, along with a reduction in the pace of balance sheet runoff in June and the end of quantitative tightening in December. The expectation is based on the PCE report, predicting the core PCE to stay below the Fed’s 2.0% target.

Vale (NYSE:VALE), BHP Group (NYSE:BHP) – A Brazilian federal judge ruled that Vale and BHP, through their joint venture Samarco, must pay 47.6 billion reais ($9.67 billion) in damages for the 2015 dam burst. BHP Group is reviewing the decision, analyzing implications, possible appeals, and impact on its supply. Negotiations for a settlement have been ongoing since 2021, and BHP has already set aside $3.7 billion for this purpose.

Walmart (NYSE:WMT) – Walmart was accused by the US National Labor Relations Board (NLRB) of employing illegal tactics to prevent unionization at its store in California, including interrogating employees, removing union material, and threats, according to a complaint issued by the NLRB. The retail giant faces various charges of labor law violations in the US, with 21 ongoing complaints.

Lowe’s Cos (NYSE:LOW) – The building materials retailer Lowe’s Cos announced the elimination of non-customer-facing corporate positions, following the trend of workforce reduction to cut costs.

Levi Strauss & Co (NYSE:LEVI) – Levi Strauss & Co forecasts annual sales and profits below Wall Street expectations, announcing the elimination of 10% to 15% of global corporate jobs. The company faces challenges due to weakness in the wholesale business and other factors.

Macy’s (NYSE:M) – Macy’s reported that Sycamore Partners, a private equity firm, is negotiating a possible acquisition, days after Macy’s rejected an offer from Arkhouse and Brigade Capital. The financial terms of the deal were not disclosed. The news boosted hopes for a competing offer. In recent years, Macy’s has faced challenges in the retail market and previously rejected acquisition offers.

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