Wall Street Highlights: HPE and Juniper Networks in Negotiations, Elliott Invests $1 Billion in Match Group, and More

U.S. index futures are registering a decline in pre-market trading this Tuesday, suggesting that the enthusiasm generated by the technology-driven recovery yesterday is losing steam.

At 05:46 AM, Dow Jones futures (DOWI:DJI) fell 119 points, or 0.31%. S&P 500 futures dropped 0.32%, and Nasdaq-100 futures declined 0.45%. The 10-year Treasury bond yield stood at 4.044%.

In the commodity market, West Texas Intermediate crude oil for February rose 1.81% to $72.04 per barrel. Brent crude oil for March increased by 1.75%, nearing $77.44 per barrel. Iron ore with a concentration of 62%, traded on the Dalian exchange, fell 0.25% to $138.82 per metric ton.

The Stoxx 600 index is declining, with most sectors in negative territory. Basic resources and technology led the losses, falling 0.8%, while oil and gas stocks rose 0.6%. Global investors are awaiting US inflation data and results from major banks. German industrial production fell 0.7% in November, surprising negatively.

U.S. stocks closed higher on Monday, led by the Nasdaq with strong performance in the technology sector. Falling bond yields and optimism about the future of the stock market boosted indices. The Dow Jones rose 0.58%, the S&P 500 1.41%, and the Nasdaq 2.20%. Shares of Boeing (NYSE:BA) pressured the Dow Jones after a sharp pullback of 8% due to issues with the 737 Max 9.

For Tuesday’s quarterly earnings front, reports from Tilray (NASDAQ:TLRY), Acuity Brands (NYSE:AYI), TD Synnex (NYSE:SNX), Albertsons (NYSE:ACI), Neogen (NASDAQ:NEOG) are expected before the market opens. After the close, numbers from AZZ (NYSE:AZZ), WD-40 (NASDAQ:WDFC), PriceSmart (NASDAQ:PSMT), SGH (NASDAQ:SGH), among others, will be awaited.

Wall Street corporate highlights for today

Nvidia (NASDAQ:NVDA) – Nvidia shares hit a record close on Monday, ending at $522.53, following the announcement of the GeForce RTX 40 SUPER series of graphics processors, focused on artificial intelligence. Nvidia is a leader in AI processors, with a market value of nearly $1.3 trillion. Additionally, Nvidia has partnered with four Chinese electric vehicle manufacturers, including Li Auto, Great Wall Motor, Zeekr, and the EV unit of Xiaomi, to use its DRIVE technology in automated driving systems, expanding its presence in China.

Apple (NASDAQ:AAPL) – Apple challenged EU rules classifying its five App Stores as a single platform service, stating that regulators misinterpreted the new legislation and that each App Store is designed for a specific Apple operating system and device. Apple also questioned the designation of iMessage as a standalone interpersonal communication service. Additionally, on Monday, it was revealed that Apple‘s iPhone sales in China fell 30% in the first week of 2024, due to growing competition from Chinese rivals such as Huawei. Despite discounts, the drop reflects competitive pressure, with Huawei gaining market share. Additionally, Apple announced that it will launch its Vision Pro mixed reality headset in the U.S. on February 2, priced from $3,499. The device features advanced technology, but its high price and need to be connected to a power source limit initial adoption.

Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL) – A U.S. oversight plan targeting companies like Apple and Alphabet, which offer digital wallets and payment apps, was criticized by the technology industry lobby group. The Consumer Financial Protection Bureau’s (CFPB) proposal sought to impose supervision similar to that applied to banks on these companies but was criticized for stifling innovation and harming startups. The Financial Technology Association also shared similar concerns and called for a halt to the regulatory process.

Microsoft (NASDAQ:MSFT) – South Korea’s Qcells will supply 12 gigawatts of solar panels to Microsoft by 2032, upping its initial commitment of 2.5 gigawatts. The deal helps Microsoft achieve its goal of 100% renewable energy by 2025 and Qcells to establish a competitive solar supply chain in the U.S.

Hewlett Packard Enterprise (NYSE:HPE), Juniper Networks (NYSE:JNPR) – Hewlett Packard is in talks to acquire Juniper Networks in a deal worth approximately $13 billion, aiming to strengthen its artificial intelligence (AI) offerings. An announcement may be made soon. HPE shares fell 7.7%, while Juniper’s rose 22.6% following the announcement. HPE recently launched a cloud computing service to support AI systems like ChatGPT, while Juniper offers a wide range of high-performance networking services.

Microchip Technology (NASDAQ:MCHP) – Shares of Microchip Technology, a computer component developer, fell over 4% in Tuesday’s pre-market due to third-quarter fiscal sales forecast falling 22%, citing a weakening economic environment. The company had expected a drop of 15% to 20%. CEO Ganesh Moorthy cited challenges faced by customers and distributors due to the weak economic environment and prolonged shutdowns at the end of the December quarter. Full results will be released on February 1st.

Unity Software (NYSE:U) – Unity Software plans to lay off 1,800 employees, about 25% of its workforce, in its largest workforce reduction. This follows the company’s reset led by interim CEO Jim Whitehurst to focus on its core business.

Match Group (NASDAQ:MTCH) – Activist investor Elliott Investment Management acquired a stake of about $1 billion in Match Group, owner of Tinder. Elliott aims to pressure the company to improve performance and increase stock prices, but specific demands have not yet been revealed.

Twilio (NYSE:TWLO) – Twilio announced a CEO change, leading some analysts to speculate about a possible split of the company. Founder Jeff Lawson stepped down, replaced by Khozema Shipchandler. The company expects financial results above previous expectations. Analysts see the change as a possible catalyst for gains in stocks and debate whether it might indicate a split of the company into two separate businesses.

JD.com (NASDAQ:JD) – JD.Com revealed that its Dada Nexus unit found irregularities in internal auditing, raising concerns about online advertising, marketing revenue, and operating costs, possibly overstating by 500 million yuan. Dada’s shares plummeted, while JD.Com’s also fell. Dada will conduct an independent review with professional consultants.

Boeing (NYSE:BA), Alaska Airlines (NYSE:ALK) – Alaska Air discovered loose parts in the door plug area in some of its Boeing 737 MAX 9s after a forced landing of an Alaska Airlines flight. United Airlines (NASDAQ:UAL) also found loose screws in grounded MAX 9 aircraft, raising concerns about the manufacturing of the best-selling jet family. The NTSB is investigating whether the cabin panel that caused an explosion in an Alaska Airlines Boeing 737 MAX 9 was properly secured. The FAA suspended 171 MAX 9 aircraft after findings of loose parts, raising concerns about Boeing’s production and causing flight cancellations.

Delta Air Lines (NYSE:DAL) – Airbus is nearing a potential order from Delta Air Lines for dozens of wide-body jets, including A350-1000s, with a deal potentially being announced during Delta’s quarterly earnings. Delta has been a major Airbus customer, owning several Airbus widebodies. The order aims to expand Delta’s Asia-Pacific network.

Ryanair (NASDAQ:RYAAY) – Ryanair expects to face delays in Boeing deliveries, resulting in five to ten fewer aircraft for the 2024 summer season. This will likely lead to a downward revision of its traffic projections, with 200 million passengers instead of the 205 million forecasted. Recent delays at Boeing and Airbus highlight the need for quality control improvements.

JetBlue Airways (NASDAQ:JBLU) – Joanna Geraghty was named CEO of JetBlue Airways, succeeding Robin Hayes. Geraghty, currently the company’s COO, will lead the airline following the $3.8 billion acquisition of Spirit Airlines (NYSE:SAVE). The U.S. Justice Department’s legal action aims to prevent the merger between the two companies, alleging it would increase airfares.

Stellantis (NYSE:STLA), Amazon (NASDAQ:AMZN), BlackBerry (NYSE:BB) – Stellantis revealed a partnership with Amazon and BlackBerry technology to create a “virtual cockpit” that allows car controls and systems to be developed and tested in a day, instead of months, speeding up the development cycle and enhancing the driver experience.

Honda (NYSE:HMC) – Honda is considering building an electric vehicle factory in Canada, with meetings between Canadian officials and representatives of the automaker to discuss the project. A final decision is expected by the end of 2024, with planned operations starting in 2028. Honda seeks to strengthen its presence in the electric vehicle market. Canada has been courting companies to develop its electric vehicle supply chain and reduce carbon emissions.

Tesla (NASDAQ:TSLA) – Drug use by Elon Musk raises concerns for Tesla’s board, as it potentially exposes the company to financial and legal risks. The directors have faced previous challenges, including litigation and shareholder concerns regarding the CEO.

Exxon Mobil (NYSE:XOM) – Exxon Mobil is conducting a write-down of about $2.5 billion on troubled properties in California, ending five decades of offshore oil production in the state. The sale of these assets to Sable Offshore is pending but faces regulatory challenges and litigation with landowners. If the sale fails, costs for Exxon could significantly increase.

NuScale Power (NYSE:SMR) – NuScale Power, a utility service company, plans to lay off 28% of its full-time employees, resulting in the removal of 154 workers. These cost-cutting measures are expected to save about $50 million to $60 million annually. NuScale, which received design certification for its Small Modular Reactor (SMR), has faced financial challenges, including the cancellation of an SMR project in partnership with an energy company in Utah.

GSK (NYSE:GSK) – GSK will acquire asthma drug manufacturer Aiolos Bio for up to $1.4 billion, expanding its respiratory disease portfolio. The deal includes an upfront payment of $1 billion and additional payments based on regulatory milestones. This will help GSK offset patent expirations and declining revenue from existing products. In 2022, respiratory drugs and vaccines generated about $14 billion in sales for the company.

Johnson & Johnson (NYSE:JNJ), Merck (NYSE:MRK) – Johnson & Johnson and Merck announced the acquisition of cancer therapy developers, initiating a potentially strong year for business in the pharmaceutical industry. The combined deals were worth over $6 billion. This follows about $25 billion in biotech deals in the U.S. last month. In other news, J&J reached a provisional agreement to pay about $700 million to resolve claims from over 40 U.S. states related to the improper marketing of its baby powder. The settlement aims to avoid potential lawsuits alleging the company concealed links between the talc and various types of cancer. J&J is still finalizing the specific terms of the agreement.

Merck & Co. (NYSE:MRK), Harpoon Therapeutics (NASDAQ:HARP) – Merck & Co. announced the acquisition of Harpoon Therapeutics, a cancer drug development company, for approximately $680 million. This acquisition will strengthen Merck’s oncology portfolio with immunotherapies, as they seek to create future revenue streams ahead of the loss of key patents for their drug Keytruda.

Bristol Myers Squibb (NYSE:BMY) – Bristol Myers Squibb CEO Christopher Boerner revealed plans to add 16 new products to the company’s portfolio by the end of the decade, focusing on licensing, partnerships, and complementary purchases rather than large acquisitions. The company reiterated its sales forecast of over $10 billion in new products by 2026.

Moderna (NASDAQ:MRNA) – Moderna projects Covid-19 vaccine sales of about $6.7 billion in 2023, confirming its 2025 growth target. Revenue is expected to drop to about $4 billion in 2024 due to the end of pre-purchase agreements overseas.

Pfizer (NYSE:PFE) – After a challenging 2023, Pfizer is looking to boost its growth by focusing on the cancer area with the acquisition of Seagen (NASDAQ:SGEN). Despite stock falls due to Covid-19-related challenges, CEO Albert Bourla expects to restore the company’s leadership position in the pharmaceutical sector.

Bank of America (NYSE:BAC) – Bank of America will record an expense of approximately $1.6 billion in the fourth quarter due to the phased discontinuation of a Bloomberg interest rate reference. Bloomberg will stop publishing the short-term bank yield index in 2024, affecting the accounting of transactions. The impact will be recognized in interest income in subsequent periods, mainly until 2026.

JPMorgan Chase (NYSE:JPM), Wells Fargo (NYSE:WFC) – Deutsche Bank (NYSE:DB) upgraded its buy recommendation for JPMorgan Chase, raising the target price to $190, while downgrading Wells Fargo to Hold from Buy, with a target price of $51. They highlighted three main themes for 2024: lower interest rates, credit quality, and regulatory and political context. Bank of America had its target price raised from $29 to $35, Citigroup (NYSE:C) from $46 to $54, Goldman Sachs (NYSE:GS) from $305 to $385, and Morgan Stanley (NYSE:MS) from $80 to $92.

Jefferies Financial Group (NYSE:JEF) – Jefferies Financial Group reported lower-than-expected earnings for the fourth quarter, due to economic uncertainty that hurt trading. However, the firm recorded an increase in investment banking revenues in 2023. Profit fell 53%, to $65.6 million, or 29 cents per share, compared to the average estimate of 34 cents per share.

KKR and Company (NYSE:KKR) – KKR plans to notify European Union antitrust authorities by the end of January about its planned acquisition of Telecom Italia’s fixed access network, in a deal worth up to $24 billion.

Ericsson (NASDAQ:ERIC) – Ericsson, known for its 5G networks, is expanding its fintech business, supporting mobile payments in developing countries. Its software already supports over 400 million mobile wallet accounts in 24 countries, focusing on growth in Africa and potential expansion in Europe and the U.S.

Abercrombie and Fitch (NYSE:ANF), Lululemon (NASDAQ:LULU), American Eagle Outfitters (NYSE:AEO), Urban Outfitters (NASDAQ:URBN) – Fashion retailers, including Lululemon, Abercrombie & Fitch, Crocs, and American Eagle Outfitters, raised their fourth-quarter sales projections, indicating a stronger-than-expected U.S. Christmas shopping season, driven by discounts and resilient demand. Urban Outfitters reported a 10% increase in sales in November and December. Additionally, Shea Jensen was appointed president of the Urban Outfitters brand in North America.

Starbucks (NASDAQ:SBUX) – Starbucks is focusing on India, planning to open 1,000 stores by 2028 and doubling its workforce to 8,600 employees. Currently, Starbucks operates over 390 stores in partnership with Tata Starbucks. The international strategy now focuses on India, in addition to China, aiming for 55,000 stores globally by 2030.

AMC Entertainment (NYSE:AMC) – AMC’s shares saw a 2.3% gain on Monday, marking its largest percentage increase in almost a month, following a five-day losing streak. The stock recovery reflected the end of its meme stock status, after a 84.7% drop in the last 52 weeks.

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