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.
Wall Street Corporate Highlights for Today
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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