This Thursday morning, U.S. index futures are showing an upward
trend, in anticipation of the imminent consumer inflation data and
the start of the fourth-quarter financial results reporting season,
a crucial period for Wall Street investors and analysts.
At 05:40 AM, the Dow Jones futures (DOWI:DJI) rose 7 points, or
0.02%. S&P 500 futures were up 0.10% and Nasdaq-100 futures
advanced 0.32%. The yield on 10-year Treasury notes was at
3.994%.
In the commodities market, West Texas Intermediate crude oil for
February rose 1.56% to $72.48 per barrel. Brent crude oil for March
was up 1.48%, near $77.94 per barrel. Iron ore with a 62%
concentration traded on the Dalian exchange closed virtually
unchanged at $136.42 per metric ton.
On Thursday’s economic agenda, investors are waiting for the
December CPI data from the Department of Labor at 08:30 AM. The
LSEG consensus forecasts a monthly inflation of 0.2% and an annual
rate of 3.2%. This will test the market’s expectations for six rate
cuts in 2024, challenging the forecast of three cuts. According to
the CME Group’s FedWatch, the probability of a Fed Funds rate cut
at the Federal Reserve’s March meeting is about 65%.
At 08:30 AM, the numbers for unemployment claims for the week
until January 6 will also be released. At 12:40 PM, Thomas Barkin
(FED) will speak.
European markets are in positive territory after several days of
mixed trading, awaiting the U.S. consumer price index report. The
Stoxx 600 is trading higher with most sectors in positive
territory. Banks retreated, but automobiles and retail rose. A
negative highlight for British retailer Marks & Spencer
(LSE:MKS), down due to “short-term challenges,” despite strong
growth in Christmas sales. On the other hand, Tesco (LSE:TSCO) rose
after revising its profit forecast upwards. Another highlight is
the mining company Antofagasta (LSE:ANTO), leading the gains.
Asian markets ended the day with positive results. The highlight
was Japan’s Nikkei index, which rose 1.77%, surpassing the
35,000-point mark, a feat not seen since February 1990, closing at
35,049.86 points. Shanghai SE in China increased by 0.31%, Hang
Seng Index in Hong Kong went up 1.27%, while the ASX 200 in
Australia saw an increase of 0.50%. Only the Kospi in South Korea
recorded a slight decline of 0.07%, following the Central Bank’s
decision to keep interest rates steady.
The main U.S. stock indexes closed higher on Wednesday, with the
Nasdaq up for the fourth straight day. The Dow Jones gained 170.57
points (0.45%), the S&P 500 rose 26.95 points (0.57%) and the
Nasdaq advanced 111.94 points (0.75%). The market was optimistic
anticipating the U.S. inflation reports, which could impact
interest rate outlooks. Software and housing stocks performed
strongly, while energy stocks fell due to declining oil prices.
For this Wednesday’s quarterly earnings front, reports from
Infosys (NYSE:INFY), Northern Technologies
International (NASDAQ:NTIC), among others, are
expected.
Corporate highlights from Wall Street today
Apple (NASDAQ:AAPL), Microsoft
(NASDAQ:MSFT) – Apple’s recent stock decline, due to concerns about
iPhone sales, puts its status as the world’s most valuable company
at risk, threatened by Microsoft. Apple’s shares fell 4% in 2024,
while Microsoft rose 2%. Additionally, the U.S. International Trade
Commission rejected, on Wednesday, Apple’s request for suspension
pending appeal in a case related to the sale of its main
smartwatches, according to court documentation.
Alphabet (NASDAQ:GOOGL) – Google is laying off
hundreds of employees across various teams, including the voice
assistant unit and the hardware team responsible for Pixel, Nest,
and Fitbit, while Fitbit’s co-founders James Park and Eric Friedman
are also leaving the company. The reorganization aims to cut costs,
amid competition with Apple (NASDAQ:AAPL) and
Microsoft (NASDAQ:MSFT) and the growing adoption
of generative AI technology.
Amazon (NASDAQ:AMZN) – Amazon.com will lay off
hundreds of employees in its streaming and studio operations,
extending job cuts into 2024. Teams at Prime Video and Amazon MGM
Studios in the Americas will be affected. The company is focusing
on high-impact projects following massive job cuts in 2022.
Additionally, Amazon failed to address EU antitrust concerns about
its $1.4 billion acquisition of iRobot
(NASDAQ:IRBT), not presenting solutions by the deadline, possibly
resulting in unconditional approval or EU veto.
Meta Platforms (NASDAQ:META) – Max Schrems’
privacy advocacy group Noyb expanded its complaint against Meta
Platforms’ ad-free subscription service. They asked the Austrian
privacy watchdog to investigate the difficulties users face in
withdrawing consent for tracking. The complaint alleges that the
consent withdrawal process is complicated and calls for corrective
measures, including fines. Additionally, Turkey’s Competition
Authority fined Meta $160,000 per day for lacking proper
documentation in a 2022 online video advertising investigation. The
fine started on December 12 and continues until Meta presents a
satisfactory compliance solution.
Netflix (NASDAQ:NFLX) – Netflix’s ad-supported
tier reached over 23 million monthly active users worldwide after
its launch in November 2022 across 12 markets. Netflix raised
prices for ad-free options to boost usage of the ad tier, which now
attracts 85% of customers to stream for more than two hours daily.
The company is projected to lead the race for U.S. advertising
dollars next year, surpassing Disney+
(NYSE:DIS).
Paramount Global (NASDAQ:PARA) – Skydance Media
CEO David Ellison is exploring a cash offer to acquire Paramount
Global, owned by National Amusements. He is seeking funds from
Skydance investors, eyeing a possible merger, but talks are
preliminary. Shari Redstone, who controls Paramount, considers a
sale due to devaluation and changes in the entertainment landscape.
Paramount’s estimated value is $38.8 billion, though no official
comment has been made by the involved parties.
SAP (NYSE:SAP) – The German software company
SAP agreed to pay about $222 million to end bribery investigations
in seven countries, including charges of conspiring to bribe
government officials in Indonesia and South Africa. SAP assumed
responsibility for corrupt practices and will face a criminal fine
of $118.8 million and $103.4 million in forfeiture. The company
welcomed the agreements, ending all U.S. and South Africa
compliance investigations, involving bribery schemes from 2013 to
2022, including falsifying records.
Thomson Reuters (NYSE:TRI) – Thomson Reuters
made an offer of about $627 million to acquire electronic billing
and tax solutions company Pagero, surpassing
Vertex‘s (NASDAQ:VERX) previous proposal. The
offer of 40 crowns per share represents an 11% premium over
Wednesday’s closing. Pagero changed its recommendation to accept
Thomson Reuters’ offer, looking to expand its indirect tax
offerings. The offer acceptance period runs from January 12 to
February 9.
Nike (NYSE:NKE) – Tiger Woods and Nike ended
their 27-year partnership. The “TW” logo ownership has always
belonged to Woods, indicating he may use it in future golf apparel
sponsorships. Nike could initiate a legal dispute, but experts
believe this would harm its image.
Walmart (NYSE:WMT) – Walmart temporarily closed
about a dozen stores on the East Coast due to power outages caused
by a winter storm. The company downplayed the business impact, as
people were buying essential foods. Other companies like
Home Depot (NYSE:HD) and Lowe’s
(NYSE:LOW) also faced challenges but remained open, providing
critical supplies. Chipotle had adjusted hours, but no major
impact, while Target (NYSE:TGT) and
Kroger (NYSE:KR) operated normally.
Smith Douglas Homes – Smith Douglas Homes
priced its initial public offering at $21 per share, reaching the
high end of its estimate, planning to raise about $161.5 million
with 7.69 million shares. The Atlanta-based company is one of the
fastest-growing private homebuilders, specializing in entry-level
homes in the South, recording a net profit of $93.5 million and
revenue of $547.3 million in the nine months ended September 30,
compared to the previous year.
KB Home (NYSE:KBH) – KB Home reported a
significant increase in orders at the start of the first quarter of
2024 due to lower mortgage rates, predicting a possible drop in
house prices for the next fiscal year. In the fourth quarter, it
beat expectations with a net profit of $150.3 million and revenue
of $1.67 billion, but with a decrease in delivered houses and
average price. KB Home forecasts an average selling price between
$480,000 and $490,000, with estimated revenues of $6.4 billion to
$6.8 billion.
Boeing (NYSE:BA), Alaska
Airlines (NYSE:ALK), United Airlines
(NASDAQ:UAL) – Alaska Airlines canceled all 737 MAX 9 jet flights
until Saturday, awaiting regulatory approvals following a “quality”
issue in the cockpit panel. The FAA grounded 171 Boeing jets,
including 65 from Alaska Airlines. United Airlines also canceled
flights. The suspension highlights ongoing safety and supply
concerns at Boeing.
Ryanair (NASDAQ:RYAAY) – Ryanair requested a
reduction in air taxes and airport fees in Germany, aiming to
possibly double its traffic in the country over the next six years
if Berlin meets the low-cost airline’s requests. CEO Michael
O’Leary emphasized that German air taxes and airport fees are among
the highest in Europe, reinforcing the pursuit of lower costs in
Europe’s largest market.
Coinbase (NASDAQ:COIN),
MicroStrategy (NASDAQ:MSTR), Marathon
Digital (NASDAQ:MARA) – Stocks are up in pre-market
trading following the Securities and Exchange Commission’s approval
of the launch of the first Bitcoin exchange-traded funds. This
could simplify and make Bitcoin (COIN:BTCUSD) purchases more
accessible to individual investors.
Mastercard (NYSE:MA) – On Wednesday, Mastercard
reached a milestone of $400 billion for the first time, driven by
confidence in consumer spending and digital payment methods. With a
market capitalization of $401.6 billion, the company is now the
15th largest in the U.S., surpassing Exxon Mobil
(NYSE:XOM) and Johnson & Johnson (NYSE:JNJ).
Mastercard’s shares have appreciated 117% over the past five years,
outperforming the S&P 500 and Visa
(NYSE:V).
Citigroup (NYSE:C) – Citigroup revealed
combined charges and reserves of about $3.8 billion, impacting its
fourth-quarter results, to be announced on Friday. They include
reserves of $1.3 billion for international risks and restructuring
charges of $780 million related to internal reorganization. There
was also an expense of approximately $1.7 billion to replenish a
Federal Deposit Insurance Corp. fund, related to previous bank
collapses.
Morgan Stanley (NYSE:MS) – Morgan Stanley
promoted 155 employees to managing directors in 2024, a reduction
from the 184 of the previous year. Of these, 37% are women, and 29%
of managing directors in the U.S. are ethnically diverse. The bank
follows Wall Street’s trend with fewer promotions this year,
reflecting a challenging scenario for investment banks in 2023 due
to declines in trading activity and mergers and acquisitions.
Occidental Petroleum (NYSE:OXY) – Warren
Buffett’s Berkshire Hathaway (NYSE:BRK.A)
disclosed that it increased its stake in Occidental Petroleum to
34%, according to a statement submitted to the Securities and
Exchange Commission on Wednesday night.
AbbVie (NYSE:ABBV) – AbbVie is confident in
maintaining its strong market share in the aesthetic segment of
Botox, despite competition from anti-wrinkle injections such as
Revance Therapeutics‘ (NASDAQ:RVNC) Daxxify and
Evolus‘ (NASDAQ:EOLS) Jeuveau. The company holds a
market lead of about 68% and is seeing gains in the cosmetic filler
market. The acquisition of Allergan in 2020 strengthened its
position. Additionally, its drugs Skyrizi and Rinvoq are performing
well in inflammatory bowel disease and are expected to surpass
Humira’s peak sales by 2027.
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