U.S. index futures are falling in the pre-market on Tuesday as
investors eagerly await the first in a series of labor data. These
numbers are likely to influence the atmosphere surrounding the
Federal Reserve meeting scheduled for next week.
At 05:20 AM, Dow Jones futures (DOWI:DJI) dropped 64 points, or
0.18%. S&P 500 futures declined 0.32%, and Nasdaq-100 futures
fell 0.58%. The yield on 10-year Treasury bonds stood at
4.251%.
In the commodities market, West Texas Intermediate crude oil for
January rose 1.03% to $73.79 per barrel. Brent crude oil for
February increased 0.99%, nearing $78.80 per barrel. Iron ore with
a 62% concentration, traded on the Dalian exchange, fell 0.36% to
$136.38 per ton.
On the economic calendar for Tuesday, investors are watching the
revised Purchasing Managers’ Index (PMI) for the November services
sector activity by S&P Global at 09:45 AM. At 10:00 AM, the ISM
(Institute for Supply Management) will release the ISM Services PMI
for November. At the same time, the Department of Labor will report
on job openings and labor turnover for October. At 4:30 PM, the
American Petroleum Institute (API) will release Crude Oil Inventory
data.
European markets showed mixed performances as the momentum that
drove a positive November began to weaken. The Stoxx 600 index
recorded a slight decline of 0.10% at the start of trading, with
different sectors showing varying results. The oil and gas sector
saw an increase of 0.35%, while the mining sector suffered a 1.15%
decline. The telecommunications sector had significant movements,
with Ericsson (NASDAQ:ERIC) rising 9% after reaching an agreement
with AT&T (NYSE:T) to build an extensive telecommunications
network using ORAN technology, while Nokia (NYSE:NOK) registered a
sharp decline.
Asian stock markets had a negative day with significant losses
in Shanghai (-1.67%) and Tokyo (-1.37%). The Reserve Bank of
Australia maintained interest rates but did not rule out future
increases, leading to a drop in the Sydney Stock Exchange (-0.89%).
Concerns about economic growth in China persist despite recent
government measures to support the economy. Moody’s reaffirmed
China’s rating but changed the outlook to negative due to the
indebtedness of local and state governments.
US stocks fell on Monday following a strong performance on
Friday. The Dow Jones fell 0.11% to 36,204.44 points, the S&P
500 declined 0.54% to 4,569.78 points, and the Nasdaq lost 0.84% to
14,185.49 points. The initial decline was attributed to
profit-taking after recent gains. Gold prices dropped, while
airline company stocks rose with the news of Alaska Air Group
(NYSE:ALK) acquiring Hawaiian Airlines (NASDAQ:HA).
In the corporate earnings front for Tuesday, investors will be
attentive before the market opens to the reports from
Nio (NYSE:NIO), AutoZone
(NYSE:AZO), Signet (NYSE:SIG), J.M
Smucker (NYSE:SJM), America’s Carmart
(NASDAQ:CRMT), Ferguson (NYSE:FERG)
ZeroFox (NASDAQ:ZFOX), and more. After the
closing, the reports from MongoDB (NASDAQ:MDB),
SentinelOne (NYSE:S), Toll
Brothers (NYSE:TOL), Asana (NYSE:ASAN),
HealthEquity (NASDAQ:HQY), Box
(NYSE:BOX), Stitch Fix (NASDAQ:SFIX), among
others, will be awaited.
Wall Street Corporate Highlights for Today
Alphabet (NASDAQ:GOOGL) – Wall Street has high
estimates for Alphabet’s fourth quarter, with concerns about the
cloud division and costs of the NFL Sunday Ticket streaming
package. Analyst James Lee from Mizuho maintains a buy rating, but
has concerns about cloud spending, legal expenses, losses on Sunday
Ticket, and investments in infrastructure.
Meta Platforms (NASDAQ:META) – Mark Zuckerberg
and entities linked to him sold about 682,000 shares of Meta
Platforms, valued at nearly $185 million, after a tumultuous year
in 2022. Meta saw a 172% increase in its shares in 2023, aiding in
maximizing Zuckerberg’s returns on his activities outside the
company. This is the first time in two years that entities related
to Zuckerberg have sold Meta shares.
International Business Machines (NYSE:IBM) –
IBM unveiled a new chip and quantum computing system, aiming to be
the foundation for larger systems in a decade. This advancement is
part of the global race to develop quantum computing, which
promises processing speeds superior to traditional computers. IBM’s
new technology, including an innovative method of connecting chips
and error correction, aims to overcome current challenges and
achieve effective quantum machines by 2033.
Meta Platforms (NASDAQ:META),
International Business Machines (NYSE:IBM) – IBM
and Meta lead the AI Alliance, an initiative with over 50 entities,
including major companies and academic institutions, to promote
open and responsible AI. The group, with members like
Intel (NASDAQ:INTC), Sony
(NYSE:SONY) and Yale, plans to develop standards and tools for AI
systems. Meta has already made its Llama 2 model open source, while
IBM, owner of Red Hat, supports the open-source approach. The
alliance aims to create an open AI ecosystem, focusing on
challenges like climate and education, comparable to IBM’s role in
forming the Linux Foundation.
Nvidia (NASDAQ:NVDA) – Nvidia plans to
collaborate with Japanese organizations to build an AI ecosystem in
Japan. The California-based company will invest in AI research, AI
factories, local startups, and public education about AI in Japan.
The initiative aims to boost Japan’s technological leadership in
artificial intelligence.
Twilio (NYSE:TWLO) – Cloud communication
services provider Twilio plans to lay off about 5% of its
workforce, or 295 employees, by the first quarter of 2024, seeking
profitable growth. The company estimates restructuring costs
between $25 million and $35 million by the end of 2023. This
follows earlier layoffs this year and office closures.
GitLab (NASDAQ:GTLB) – Shares of GitLab rose
16.2% in pre-market trading after the announcement of third-quarter
results and quarterly projection, exceeding Wall Street
expectations. The adjusted profit was 9 cents per share, while
revenue reached $149.7 million. The company recorded its first
adjusted operating profit and continued to grow responsibly, with
non-GAAP operating margin expansion. Revenue grew 32%
year-over-year, with 874 customers contributing more than $100,000
in annual recurring revenue.
Disney (NYSE:DIS) – The Florida
governor-appointed board overseeing Walt Disney’s theme parks
accused the company of providing millions of dollars in benefits,
like passes and hotel discounts, to employees of a previous local
board, characterizing them as “public employee bribes.”
AT&T (NYSE:T), Ericsson
(NASDAQ:ERIC) – AT&T chose Ericsson to build an ORAN network,
covering 70% of U.S. wireless traffic by 2026. This milestone in
ORAN technology, which reduces costs using software and equipment
from multiple vendors, marks a significant advancement.
Verizon Communications (NYSE:VZ) – Verizon
Communications announced that it will include streaming
subscriptions to Netflix (NASDAQ:NFLX) and
Warner Bros Discovery’s Max (NASDAQ:WBD) in its
“myPlan” package for customers. Starting Thursday, subscribers can
access both ad-supported services for a combined value of $10 per
month.
Telefonica (NYSE:TEF) – Telefonica, Spain’s
largest telecommunications company, plans to eliminate about 5,100
jobs in the country by 2026. The goal is to cut costs and adjust
the size of the company to the current market, according to UGT, a
Spanish union. Telefonica, with 21,000 employees in Spain and over
103,000 globally, justifies the decision with productivity and
organizational reasons. The company confirmed the personnel
adjustment but did not specify the number of cuts. The next round
of negotiations with the union will take place the following
week.
Frontier Communications (NASDAQ:FYBR) –
Activist investor Jana Partners is pressuring Frontier
Communications to consider a strategic review, including a
potential sale. Jana suggests selling the company, partnerships, or
divesting non-essential assets to improve the company’s stock
performance.
Take-Two Interactive (NASDAQ:TTWO) – Rockstar
Games, a subsidiary of Take-Two Interactive, released a trailer for
the new “Grand Theft Auto VI,” ending years of anticipation. The
release is planned for 2025, revealed after a leak, and coincides
with the 25th anniversary of Rockstar.
NetEase (NASDAQ:NTES) – NetEase lost about $7
billion in market capitalization this week due to investor concern
over competition from Tencent Holdings Ltd’s (USOTC:TCEHY) upcoming
game Dream Star. Shares fell 11% this week due to direct
competition with NetEase’s hit game Eggy Party. Tencent plans to
invest $196 million in developing Dream Star.
Eli Lilly (NYSE:LLY) – Eli Lilly extended until
December 15 the deadline for shareholders of Point Biopharma
(NASDAQ:PNT) to accept its purchase offer. The offer remains at
$12.50 per share, despite low uptake due to investors considering
the price low.
EyePoint Pharmaceuticals (NASDAQ:EYPT) –
EyePoint Pharmaceuticals initiated a public offering of $175
million in common stock, with an option for underwriters to
purchase up to an additional $26.25 million in shares. This follows
a 177% increase in shares on Monday after announcing promising data
for its macular degeneration treatment EYP-1901, the biggest
single-day gain ever recorded for the company. The proceeds will be
used to advance the clinical development of EYP-1901 and support
early-stage pipeline projects.
Caterpillar (NYSE:CAT) – Caterpillar invested
in Nth Cycle, a recycling technology developer, aiming to promote
the reuse of metals in batteries and construction equipment. The
investment is part of a Series B funding round of $44 million for
Nth Cycle, seeking to commercialize recycling methods for the green
energy transition. Nth Cycle’s technology uses an electrochemical
process to extract nickel and cobalt, targeting mining and electric
vehicle markets.
Kinder Morgan (NYSE:KMI) – Kinder Morgan
forecasts an 11% increase in net income per share for 2024, driven
by growth in its natural gas pipelines and energy transition
projects. The U.S. pipeline operator expects earnings of $1.21 per
share for 2024, compared to the $1.09 forecast for 2023. The growth
will be aided by increased contract rates and demand for renewable
diesel and renewable natural gas.
Chevron (NYSE:CVX) – John Kerry, the U.S.
climate envoy, criticized oil companies, including Chevron, for not
fulfilling environmental commitments. He emphasized the industry’s
leadership importance in fighting climate change, praised
commitments at COP28, and expressed support for the gradual
elimination of fossil fuels.
3M (NYSE:MMM) – Barclays upgraded 3M’s stock
rating on Monday. Analyst Julian Mitchell cited expected progress
in increasing legal responsibilities as the reason for the upgrade
from “underweight” to “equal weight”. Mitchell pointed to the
expected update on the 3M litigation agreement and improved
prospects in electronics and consumer markets in 2024. He also
predicts a possible operational margin expansion after years of
decline.
Joann (NASDAQ:JOAN) – After reporting a larger
fiscal loss in the third quarter and sales below Wall Street’s
expectations, shares of Joann Inc. fell 11.6% in Tuesday’s
pre-market. The craft retailer had a loss of $21.6 million, or 51
cents per share, worsening from the previous year. Total sales fell
4.1% to $539.8 million, with same-store sales also reduced. Joann
projects a sales drop of 1% to 2% for fiscal 2024, with its shares
accumulating a 69% loss on the year.
Barclays (NYSE:BCS) – The Qatar Investment
Authority (QIA) announced the sale of almost half of its stake in
the bank. The sale comes as Barclays prepares for a strategic
review in 2023.
Moody’s (NYSE:MCO) – Moody’s downgraded China’s
credit outlook from stable to negative, citing reduced medium-term
economic growth and risks in the vast real estate sector. This
reflects the need for financial support to indebted local
governments and state-owned enterprises, increasing fiscal and
economic risks. Additionally, Moody’s predicts a negative outlook
for banks in 2024, citing slow economic growth, default risks, and
pressures on profitability. Previous interest rate hikes and rising
unemployment in advanced economies may weaken asset quality,
especially with real estate exposures in the US and Europe.
Blackstone (NYSE:BX) – Blackstone, a private
equity firm, is considering selling Anthos Therapeutics, a
developer of a new generation of anticoagulants founded four years
ago with support from Novartis (NYSE:NVS). Anthos, which has no
products on the market yet, could be worth billions, well above
Blackstone’s initial investment of $250 million. Its main product,
abelacimab, is in advanced clinical trials, increasing its
potential value. Blackstone is working with investment bankers on
the sale, but there’s no certainty of a deal. Additionally,
Blackstone acquired the Moxy Kyoto Nijo, a hotel in Kyoto, Japan,
from Goldman Sachs Group (NYSE:GS) for $54 million as tourism in
Japan recovers quickly, boosting the hospitality sector.
American Express (NYSE:AXP) – Vanguard ended
its automated financial advisory offer with American Express,
halting new enrollments on November 15 and ending the service on
February 29. Customers will be transferred to the Vanguard Digital
Advisor or Vanguard Personal Advisor Service. The reason was not
explained.
Palantir Technologies (NYSE:PLTR) – Client
concerns about data ownership may limit the growth of Palantir
Technologies, according to William Blair. Doubts emerged following
a presentation by the US Army, indicating a possible smaller
contract. Palantir faces competitive pressures, with its shares
recently falling.
Virgin Galactic (NYSE:SPCE) – Founder Richard
Branson indicated he will no longer invest in the space tourism
company. While Branson’s lack of future investment may seem
concerning, it’s common for founders to turn to capital markets for
additional financing. Virgin Galactic, still unprofitable, has
about $1.1 billion in cash and expects to generate positive free
cash flow by 2026. Branson has already invested tens of millions in
the company, and his reluctance for future financing doesn’t
necessarily reflect a lack of confidence.
Tesla (NASDAQ:TSLA) – Tesla’s sales of electric
vehicles made in China fell 17.8% year-on-year in November to
82,432 cars, the biggest drop since December 2022, according to
data from the China Passenger Car Association. Tesla adjusted
production and prices in response to increased inventory and
weakened demand, facing strong competition in the Chinese market.
Elsewhere, the Danish union 3F announced support for Swedish
mechanics on strike against Tesla, refusing to unload or transport
Tesla cars to customers in Sweden. The action is a global effort to
protect workers’ rights and responds to a request from the Swedish
union IF Metall.
General Motors (NYSE:GM) – General Motors CEO
Mary Barra emphasized the company’s commitment to resolving issues
with its autonomous unit, Cruise, but postponed discussions about
funding until the completion of ongoing safety evaluations,
expected in early 2024.
Ford Motor (NYSE:F) – In November, Ford Motor
recorded a slight 0.5% drop in new vehicle sales in the US,
following a long strike that affected production. On the other
hand, Ford’s electric vehicle sales, including the F-150 Lightning
and Mustang Mach-E, grew 43.2%, totaling 8,958 units. The company
resumed production at its main factories after resolving the strike
with the United Auto Workers union at the end of October.
Nio (NYSE:NIO) – Nio, the Chinese electric
vehicle manufacturer, was included in a database by China’s
Ministry of Industry, an important step towards vehicle production
in the country. Nio, which has been producing electric vehicles in
partnership with JAC since 2018, has not yet released details on
obtaining a manufacturing license. The potential approval would
alleviate uncertainties about the impact of JAC’s asset sales on
factories producing Nio vehicles.
Vinfast (NYSE:VFS) – Vietnamese electric
vehicle manufacturer VinFast announced that the US International
Development Finance Corporation (DFC) will consider its $500
million loan application for expansion. The funding would be aimed
at constructing lithium-ion battery manufacturing facilities in
Vietnam, subject to DFC review and approval. VinFast, which began
delivering electric vehicles in California and is listed on Nasdaq,
sees this project as an initial step in a series of future
initiatives.
Fisker (NYSE:FSR) – Fisker received a downgrade
from Wall Street on Monday, part of a trend of analysts moving away
from unprofitable electric vehicle startups. This also affects
other companies in the sector, highlighting the importance of
profitability in an environment of rising interest rates.
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