Wall Street Highlights: Tesla’s Competition with BYD, JPMorgan Stocks Achieve New Records, and More

U.S. index futures show a decline in Wednesday’s pre-market trading, a direct reaction to the performance of the Nasdaq Composite, which faced its most challenging session since October in the previous session.

At 05:10 AM, the Dow Jones futures (DOWI:DJI) fell 75 points, or 0.20%. The S&P 500 futures fell 0.25% and the Nasdaq-100 futures retreated 0.44%. The yield on 10-year Treasury notes was at 3.978%.

In the commodities market, West Texas Intermediate crude oil for February fell 0.68%, to $69.90 per barrel. Brent crude for March fell 0.62%, close to $75.42 per barrel. Iron ore with a 62% concentration, traded on the Dalian exchange, rose 2.83%, to $142.38 per ton.

On Wednesday’s economic agenda, investors await, at 10:00 AM, the JOLTS report released by the Department of Labor for November, with an LSEG projection of 8.850 million job openings. At the same time, the ISM will publish the ISM index of industrial sector activity for December, with an LSEG forecast of 47.1. The minutes of the last monetary policy meeting of the Federal Open Market Committee (Fomc), held between December 12 and 13, will be released at 2:00 PM by the Federal Reserve.

European markets had a mixed opening on Wednesday. The Stoxx 600 fluctuated between losses and gains, falling 0.5% in the morning. Food and beverage stocks rose, while construction stocks fell. Danish Maersk (TG:DP4B) saw an increase after pausing routes in the Red Sea. Meanwhile, inflation in Turkey reached 64.8%. Asian markets fell, affected by downgrades of major technology companies, especially chip manufacturers. In Japan, the stock exchange remains closed for a market holiday.

U.S. stocks fell on Tuesday, with the Nasdaq leading the decline due to weakness in technology stocks. The Dow Jones recovered slightly, while the S&P 500 also fell. Apple (NASDAQ:AAPL) saw a sharp drop following a downgrade in rating by Barclays. Some traders were absent due to the New Year’s holiday. Semiconductor and airline sectors also experienced notable declines, while health, pharmaceutical, and biotechnology stocks showed strength.

Wall Street Corporate Highlights for Today

Apple (NASDAQ:AAPL) – Apple’s shares fell 3.6% on Tuesday to a seven-week low after Barclays (NYSE:BCS) downgraded its rating due to concerns of weak demand in 2024 for products like iPhone and Mac. This drop reflects the highest number of negative recommendations in two years. The company, which has a significant weight in the S&P 500, faces demand challenges and competition, particularly in China, and growing concerns about its services business.

AMD (NASDAQ:AMD), Intel (NASDAQ:INTC), ASML (NASDAQ:ASML), Nvidia (NASDAQ:NVDA) – On Tuesday, the semiconductor sector faced a broad sell-off, with the VanEck Semiconductor ETF dropping 3.4% in one day, after all its 25 components recorded declines. This follows an exceptional year in 2023, when the ETF rose 72.3%, its best performance since 2003. Advanced Micro Devices led the declines with a 6% drop, followed by Intel with 4.9%, after a 90.1% rise in 2023. ASML Holding saw a 5.3% drop due to export restrictions. In contrast, Nvidia had the best performance in 2023, with a 238.9% increase, but fell 2.8% on the day.

Lattice (NASDAQ:LSCC) – Benchmark recommended buying Lattice shares due to underperformance compared to peers in the semiconductor industry. Analyst David Williams raised the target price to $95, citing a positive outlook for the Avant product line. Although shares fell after a disappointing forecast in October, the analyst is optimistic about future growth. Lattice shares rose 5% in 12 months, lagging behind the iShares Semiconductor ETF, which gained 61%.

Palantir Technologies (NYSE:PLTR) – Palantir will hold a board meeting in Tel Aviv next week as a gesture of solidarity with Israel during the conflict with Hamas. The data analytics company states its work in the region is vital and will continue. They have had a presence in Israel for over a decade, with an office in Tel Aviv.

MicroStrategy (NASDAQ:MSTR) – Michael Saylor, the largest public Bitcoin holder, is selling about $216 million in MicroStrategy shares, the company he co-founded. The shares were acquired through options and are part of a previously announced plan. MicroStrategy, which increased its Bitcoin holdings to over $8 billion, continues to attract investors interested in Bitcoin exposure, despite possible approval of Bitcoin ETFs in the U.S. MicroStrategy’s shares rose 372% last year.

Electric Vehicles – Due to new battery supply rules, many electric vehicles, including the Nissan Leaf, Tesla Cybertruck All-Wheel Drive, some Tesla (NASDAQ:TSLA) Model 3 models, and the Chevrolet Blazer EV, lost eligibility for tax credits of up to $7,500 in the U.S. The U.S. Treasury implemented these rules to reduce the electric vehicle supply chain’s dependence on China. The number of models eligible for tax credits dropped from 43 to 19. Manufacturers like Nissan (USOTC:NSANY) and General Motors (NYSE:GM) are adjusting their supply chains to regain eligibility for tax credits.

Tesla (NASDAQ:TSLA) – In the fourth quarter of 2023, Tesla set a record with 494,989 electric vehicle deliveries, exceeding expectations and meeting its annual target, but not reaching the internal annual goal of 2 million, delivering 1.8 million in total. China’s BYD surpassed Tesla with 526,409 vehicles delivered in the quarter and 3.02 million for the year. Despite facing competition and regulatory challenges, Tesla led sales in Norway for the third consecutive year, with electric vehicles representing 82.4% of new vehicle sales in the country. In Sweden, Tesla overcame union challenges, increasing its registrations to 1,789 new vehicles in December and raising its market share to 6.1%.

Rivian (NASDAQ:RIVN) – Rivian Automotive delivered 13,972 vehicles in the fourth quarter of 2023, 10% below the previous quarter and below market expectations of 14,430 units. Intense competition and high interest rates in the U.S. impacted demand, resulting in a drop in the company’s shares on Tuesday. Rivian produced 17,541 vehicles in the last quarter, surpassing the annual target of 54,000.

Ryanair (NASDAQ:RYAAY) – Ryanair reported that online travel agents, including Booking.com (NASDAQ:BKNG), Kiwi, and Kayak, ceased selling its flights since early December due to legal and regulatory pressure. The airline anticipates a 1-2% reduction in occupancy in the short term in December and January but does not expect a significant impact on annual traffic volume or net profit projection.

American Airlines (NASDAQ:AAL), Delta Air Lines (NYSE:DAL), United Airlines (NASDAQ:UAL), Southwest Airlines (NYSE:LUV) – Airlines for America, representing major airlines such as American, Delta, United, and Southwest, requested more efforts from U.S. transportation authorities to balance commercial and private air traffic and address air traffic controller shortages. They emphasized the need to minimize delays and cancellations, especially during holidays. The FAA acknowledged the controller shortage but indicated it is taking steps to recruit and train more personnel.

Chevron (NYSE:CVX) – Chevron plans to take non-cash charges of $3.5 to $4 billion in the fourth quarter of 2023, mainly related to oil and gas production in California and asset abandonment in the Gulf of Mexico. The impairment in California is due to regulatory challenges, while in the Gulf of Mexico, it is related to decommissioning costs for previously sold offshore properties. Chevron will continue operating the affected assets for many years.

HSBC (NYSE:HSBC) – HSBC’s subsidiary, HSBC Continental Europe, completed the sale of its retail banking business in France to Crédit Commercial de France, owned by the My Money Group, on January 1st. The My Money Group, backed by Cerberus, will have assets above $33.11 billion and a solid solvency position. The deal, initially proposed in June 2021 for one euro, further strengthens My Money Group’s financial position. Additionally, HSBC will launch the international payments app Zing to compete with fintechs like Revolut and Wise, initially in the UK, with plans for global expansion. The app will be accessible to non-HSBC clients and seeks a share in the international payments market. HSBC aims to compete with fintechs in mobile banking services, and the news caused a drop in Wise (LSE:WISE) shares.

JPMorgan Chase (NYSE:JPM) – JPMorgan’s shares reached a new record on Tuesday, surpassing the highest level set in October 2021. The largest U.S. bank had a solid performance last year, rising 27%, outperforming its rivals and raising its market capitalization to about $500 billion. Despite the strong run, the expected return potential is about 3% this year, according to analysts.

Morgan Stanley (NYSE:MS) – In December 2023, global long-term funds unloaded Chinese stocks at the fastest pace of the year, with net outflows of $3.8 billion, as reported by Morgan Stanley. This was due to investor redemptions and portfolio diversification. China and Hong Kong underperformed in major global indices in 2023, impacted by geopolitical risks and a slow economic recovery. Morgan Stanley also noted a realignment of European fund managers’ positions on China, contrasting with the more bullish stance of hedge funds at the end of the year.

Alibaba (NYSE:BABA) – In 2023, Alibaba repurchased 897.9 million of its shares, spending $9.5 billion, in both the U.S. and Hong Kong markets. After this buyback program, the remaining authorized amount until March 2025 is $11.7 billion. The company noted a net reduction of 3.3% in its outstanding shares, considering the issuance of shares for its Employee Stock Ownership Plan (ESOP).

Abercrombie & Fitch (NYSE:ANF) – In 2023, Abercrombie & Fitch’s shares saw an impressive increase of 285%, even outperforming companies like Nvidia (NASDAQ:NVDA) and Meta Platforms (NASDAQ:META) in the S&P 500. This marked a turnaround after struggles in 2022 due to supply chain issues and inflation. However, analysts express concerns that the current success may be hard to sustain, with risks of reversal of gains and the cyclicality of fashion.

Hasbro (NASDAQ:HAS) – Hasbro’s shares faced turbulence in early 2024, due to D.A. Davidson’s downgrade amid concerns about the future of the toy industry. The analyst downgraded the rating to “Neutral” and lowered the target price from $60 to $53, citing uncertainty over growth. Hasbro cut almost 20% of its workforce due to lower-than-expected toy sales in 2023, raising concerns about dividends and debt. The shares fell 17% in 12 months.

Bloomin’ Brands (NASDAQ:BLMN) – Bloomin’ Brands has appointed David George and Jon Sagal from Starboard to its Board of Directors as part of a cooperation agreement. Starboard holds approximately 9.7% of the company’s shares. The Board has also formed an Operational Committee to drive corporate and operational improvements. The agreement has been filed with the SEC. Financial advisors include BofA Securities, and legal advisors include Wachtell, Lipton, Rosen & Katz for Bloomin’ Brands and Olshan Frome Wolosky LLP for Starboard.

Moderna (NASDAQ:MRNA) – Moderna’s shares jumped on Tuesday after Oppenheimer upgraded its rating to “Outperform.” CEO Stéphane Bancel reaffirmed the sales growth target for 2025, driven by the expected launch of RSV vaccines and a combined flu/Covid vaccine. Despite a 45% drop in 2023, Moderna expects to break even financially in 2026 and projects $4 billion in revenue in 2024 from its vaccines.

IQVIA (NYSE:IQV) – A U.S. court upheld the Federal Trade Commission’s (FTC) decision to block IQVIA’s acquisition of DeepIntent, citing concerns over competition in the healthcare advertising sector. The FTC argued that the merger would increase prices for consumers and harm patients. Judge Edgar Ramos supported the FTC, stating that the acquisition could substantially harm competition. IQVIA expressed disappointment with the decision and is evaluating its options.

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