In Wednesday’s pre-market, U.S. index futures extended the
downward trend seen in the previous session.
As of 6:02 AM, Dow Jones futures (DOWI:DJI) fell 164 points, or
0.44%. S&P 500 futures fell 0.48% and Nasdaq-100 futures
retreated 0.58%. The yield on 10-year Treasury bonds was at
4.062%.
In the commodities market, West Texas Intermediate crude oil for
February fell -2.11%, to $70.87 per barrel. Brent crude for March
fell 1.77%, close to $75.99 per barrel. Iron ore with a 62%
concentration, traded on the Dalian exchange, fell 0.75%, to
$129.21 per metric ton.
On Wednesday’s economic agenda, investors await December retail
sales numbers, with the LSEG consensus predicting a monthly
increase of 0.4% at 08:30 AM. At the same time, December import
prices will be released. At 09:15 AM, December industrial
production data, with LSEG consensus projecting stability compared
to November. The January builder confidence index will be published
at 10 AM by the NAHB. The Beige Book will be released by the
Federal Reserve at 2 PM.
Asian markets closed lower on Wednesday, impacted by
disappointing economic data from China and uncertainties about U.S.
interest rate policy. Hong Kong’s Hang Seng led the losses with a
3.71% drop, followed by significant declines in mainland China
indices. Japan’s Nikkei, South Korea’s Kospi, and Taiwan’s Taiex
also recorded drops. China’s annual GDP expansion of 5.2% in the
fourth quarter of 2023 was below expectations. Moreover, the
Chinese real estate sector continues to face crises. In Oceania,
the Australian stock market registered a slight decline.
European stock markets recorded drops of more than 1% this
morning, influenced by ECB statements that moderated expectations
of interest rate cuts and by weak data from China. Uncertainties in
monetary policy in the United Kingdom and the United States also
weigh on the market.
On Tuesday, U.S. stocks faced a notable decline due to rising
Treasury yields above 4% and concerns that the Federal Reserve
might delay interest rate cuts. The major indices finished in the
red, with the Dow recording a more significant drop. The Empire
Manufacturing Index underperformed expectations, the worst since
May 2020, signaling potential economic challenges. Additionally,
hawkish comments from some central bank officials and disappointing
quarterly results from Morgan Stanley (NYSE:MS)
influenced the market. However, there were exceptions, such as
Goldman Sachs (NYSE:GS), which reported solid
earnings, and Advanced Micro Devices (NASDAQ:AMD),
which stood out due to optimistic comments about semiconductor
demand.
For Wednesday’s quarterly earnings front, scheduled to present
financial reports before market opening are Charles
Schwab (NYSE:SCHW), Prologis (NYSE:PLD),
US Bancorp (NYSE:USB), Citizens Financial
Group (NYSE:CFG), and more. After the close, numbers from
Discover (NYSE:DFS), Alcoa
(NYSE:AA), Wintrust Financial (NASDAQ:WTFC),
Kinder Morgan (NYSE:KMI), H.B.
Fuller (NYSE:FUL), among others, are awaited.
Wall Street Corporate Highlights for Today
Apple (NASDAQ:AAPL) – Apple became the largest
smartphone supplier in shipments in 2023, surpassing Samsung for
the first time in history. Apple’s smartphone shipments increased
by 3.7% over the year, while the overall industry fell by 3.2%. The
company maintained its position thanks to the demand for premium
devices and attractive trade-in offers.
Alphabet (NASDAQ:GOOGL) – Alphabet’s subsidiary
YouTube is profiting millions from advertising on channels that
disseminate misinformation about climate change, due to evasive
tactics by content creators, according to a report from the Center
for Countering Digital Hate (CCDH). Moreover, Google announced
layoffs of hundreds of employees from its advertising sales team as
it continues its transition to automation and artificial
intelligence. These cuts follow earlier layoffs in units like voice
assistant, hardware, and augmented reality, suggesting that job
cuts may persist into 2024. Google Pay signed an agreement with the
National Payments Corporation of India (NPCI) to expand its mobile
device-based payment services outside India. The partnership aims
to make international payments more convenient for Indian travelers
and establish digital payment systems similar to UPI in other
countries, aligning with the Indian government’s efforts to make
UPI globally accepted.
Nvidia (NASDAQ:NVDA), AMD
(NASDAQ:AMD) – Shares of Nvidia and AMD are slightly down in
Wednesday’s pre-market, after rising the previous day due to
optimism about artificial intelligence (AI) chip demand, leading
analysts to raise price targets. Barclays
(NYSE:BCS) raised AMD’s price target to $200, while KeyBanc
increased it to $195. Nvidia also saw its price target raised to
$740. Both stocks are among the top gainers in the PHLX
semiconductor index. Nvidia plans to produce an AI chip for Chinese
customers, while AMD launched new AI chips for data centers.
Synopsys (NASDAQ:SNPS), Ansys
(NASDAQ:ANSS) – Synopsys, a chip design software manufacturer,
plans to acquire Ansys, a deal valued at $35 billion in cash and
stock. This deal will create a new competitor in the enterprise
software sector, with regulatory uncertainties.
Hertz (NASDAQ:HTZ) – Hertz, the largest
operator of electric vehicle fleets in the U.S., is discarding
20,000 of them, including Teslas, due to high repair costs and low
demand. This could impact the used electric vehicle market and
concern buyers, as the lack of knowledge and spare parts raises
repair costs. Consumer Reports revealed that electric vehicles had
79% more problems than conventional cars. Hertz may need to offer
significant discounts on its used electric vehicles. However,
experts believe repair costs will decrease as infrastructure
develops.
Uber (NYSE:UBER) – Uber is collaborating with
Tesla to encourage its drivers to adopt electric vehicles in the
U.S. They offer purchase incentives and share data to improve
charging infrastructure. Uber aims to be emission-free by 2030 in
U.S. and Canadian cities.
Tesla (NASDAQ:TSLA) – Tesla CEO Elon Musk wants
at least 25% voting control to lead the company in artificial
intelligence and robotics. He prefers to develop products outside
Tesla if he can’t gain this influence, which could create conflicts
with his CEO duties. Moreover, Tesla cut prices of Model Y in
Germany after losing its sales lead to Volkswagen in 2023. The
Model Y Long Range and Performance saw cuts of 5,000 euros, while
rear-wheel drive models dropped 1,900 euros. Competition and the
temporary suspension of production in Berlin also influenced this
decision, occurring amid a discount race in China and the
anticipated end of the German electric vehicle subsidy program.
Toyota Motor (NYSE:TM) – Toyota plans to
overhaul its subsidiary Daihatsu following an investigation into
misconduct in collision safety tests. Possible measures include
breaking down barriers between businesses, sending engineers, and
leadership changes. Production at Daihatsu’s factories in Japan
remains halted due to irregularities in 64 models.
Stellantis NV (NYSE:STLA) – Stellantis signed a
multi-billion dollar deal with rental company SIXT SE to sell up to
250,000 vehicles in Europe and North America over the next three
years. Deliveries will start in 2024, covering various Stellantis
models, including electric vehicles. Additionally, the companies
are exploring cooperation opportunities in areas like Data as a
Service (DaaS).
Boeing (NYSE:BA) – Boeing appointed retired
U.S. Navy Admiral Kirkland H. Donald as a special advisor to the
CEO to improve quality control following an incident with a 737 MAX
9. Additionally, Ryanair CEO Michael O’Leary expressed uncertainty
about the certification of Boeing’s 737 MAX 10 jet, initially
expected for the fourth quarter of 2024, suggesting it may not
occur before 2025. Ryanair (NASDAQ:RYAAY) has 150 firm orders for
the MAX 10.
Spirit AeroSystems (NYSE:SPR) – Spirit
AeroSystems, a supplier to Boeing, will implement additional
inspections in its 737 fuselage production line following an
incident where a cabin panel exploded in mid-air on an Alaska
Airlines (NYSE:ALK) 737 MAX 9 jet. The inspections will follow
airlines’ practices for returning 737 MAX 9 aircraft to service.
The measure aims to improve quality assurance and controls across
the production system. The FAA grounded 171 MAX 9s after the
incident, resulting in a drop in Spirit AeroSystems’ shares.
Spirit Airlines (NYSE:SAVE), JetBlue
Airways (NASDAQ:JBLU) – Spirit Airlines faces tough
decisions after the blockage of its $3.8 billion merger deal with
JetBlue Airways. The low-cost carrier is considering seeking
another buyer or may opt for a Chapter 11 filing and reorganization
to strengthen its finances, facing challenges from rising operating
costs and outstanding debt.
Exxon Mobil (NYSE:XOM) – Mexico Pacific
announced a deal with Exxon Mobil to supply an additional 1.2
million tons per year of liquefied natural gas (LNG), enabling a
final investment decision to expand its Saguaro Energia LNG plant
on Mexico’s west coast. Exxon will purchase the LNG free on board
for a 20-year period. The Saguaro Energia project will send 15
million tons per year of LNG to Asia, using gas from the U.S.
Permian Basin, with an estimated cost of over $15 billion.
BHP (NYSE:BHP) – Australian nickel producers
are facing low prices due to increased supply from Indonesia and
declining demand, leading to a reassessment of BHP’s strategy,
which bet on nickel as a key component in its green strategy. The
drop in prices and innovations in nickel use in batteries have
posed challenges to the nickel market. BHP recorded a 61% decline
in profits from its nickel business in 2023.
DuPont (NYSE:DD), Dow Inc.
(NYSE:DOW) – In an unusual twist, BofA Securities analyst Steve
Byrne downgraded DuPont’s shares directly from “Buy” to “Sell”.
This rare move, which typically involves a gradual transition
between categories, had a notable impact on the market. Meanwhile,
Dow Inc. saw its shares upgraded from “Hold” to “Buy”, indicating a
cautious approach by investors towards the chemical sector.
Honeywell (NASDAQ:HON) – Honeywell announced
that its quantum computing company, Quantinuum, achieved a
valuation of $5 billion following a $300 million funding round led
by JPMorgan Chase (NYSE:JPM). Mitsui & Co (NYSE:SMFG) and Amgen
(NASDAQ:AMGN) also participated, raising Quantinuum’s total raised
to about $625 million.
Walt Disney (NYSE:DIS) – Disney rejected
activist shareholder nominees and emphasized its transformation
efforts, including prioritizing streaming and cost savings, led by
CEO Bob Iger. The company faces pressures to improve
performance.
Restaurant Brands International (NYSE:QSR),
Carrols Restaurant (NASDAQ:TAST) – Restaurant
Brands International, owner of Burger King, plans to acquire
Carrols Restaurant Group Inc. for about $1 billion, aiming to
transform and revitalize over 600 franchises. This action, part of
a broader plan to remodel units and enhance customer experience,
seeks to strengthen Burger King’s market presence, challenging
competitors like McDonald’s and Wendy’s. The purchase is expected
to be completed in the second quarter, with an additional
investment of $500 million in renovations.
Alibaba (NYSE:BABA), PDD
Holdings (NASDAQ:PDD), JD.com (NASDAQ:JD)
– Following China’s GDP growth of 5.2% in the fourth quarter and
throughout 2023, U.S.-listed shares of Alibaba, JD.com, and PDD
Holdings fell. This was the slowest annual growth rate, excluding
the three Covid-19 pandemic years, since 1990, as reported by The
Wall Street Journal.
GameStop (NYSE:GME) – GameStop, the video game
retailer and original meme stock, had its biggest daily drop in
months on Tuesday, falling 5.2%. They also extended their losing
streak to three days and are 31.8% below the last year. The shares
are down 1% in Wednesday’s pre-market, with a market value of $4.27
billion.
AMC Entertainment Holdings (NYSE:AMC) – The
shares of AMC Entertainment continued their decline on Tuesday,
hitting an intraday record low and closing at another record low.
The recent decline reflects the end of the meme stock status for
the cinema company. Over the past 52 weeks, AMC’s shares have
fallen 90.6%.
Thomson Reuters (NYSE:TRI) – Thomson Reuters
announced the acquisition of World Business Media Limited, a
subscription news and analysis company in the insurance and
reinsurance market. The London-based company will join Thomson
Reuters’ Reuters News division, expanding its offerings to
professionals in the field. The financial details of the deal were
not disclosed.
The New York Times (NYSE:NYT) – OpenAI’s CEO
Sam Altman denied the need for large volumes of training data from
publishers like The New York Times. He emphasized that AI does not
need to use the Times’ data, as the company is seeking to license
news content from various sources to provide accurate information
to users. OpenAI is currently in negotiations with various
publishers for this purpose, seeking to balance the need for
accurate data with concerns about copyright. This effort comes
after a lawsuit by The New York Times alleging copyright
infringement by OpenAI.
Amer Sports – Amer Sports, the maker of Wilson
tennis rackets, plans to conduct its initial public offering (IPO)
in the U.S. by the end of January, aiming to raise $1 billion and
value the company at $10 billion. Amer Sports, owned by a Chinese
consortium led by Anta Sport and including Tencent, has already
revealed its regulatory filings and is in early discussions with
investors ahead of the formal launch of the deal’s roadshow. The
company’s revenue grew to $3.05 billion in the nine months until
September 2023, driven by increased operations in China. Amer
Sports went private in 2019 in a deal valued at over $5
billion.
Kaspi.kz – Shareholders of Kaspi.kz, a mobile
app provider from Kazakhstan, plan an initial public offering of 9
million American Depositary Shares (ADS), valuing the company at
$873 million at current prices. Kaspi.kz operates the Kaspi.kz
Super App, with 13.5 million monthly active users. The company will
not receive funds from the IPO. Kaspi.kz reported a net profit of
$1.27 billion and revenue of $2.83 billion in the nine months to
September 30. The offering plans to list the shares on the Nasdaq
Global Select Market under the symbol KSPI.
GSK (NYSE:GSK) – The British pharmaceutical
company GSK raised $1.24 billion (£978 million) by selling its
stake in Haleon at a discount, reducing its stake to 4.2% in the
world’s leading independent consumer healthcare company.
Berkshire Hathaway (NYSE:BRK.A) – Warren
Buffett’s Berkshire Hathaway acquired the remaining 20% of the
truck stop operator Pilot Travel Centers from the Haslam family
following an agreement. The deal’s value was not disclosed, but it
involved a dispute over the company’s valuation. Berkshire now owns
100% of Pilot Travel Centers.
UBS (NYSE:UBS) – UBS Global Research raised its
year-end target for the S&P 500, projecting a level of 5,150,
the highest among major global banks, indicating a potential 8%
increase from current levels, based on expectations of interest
rate cuts, controlled inflation, and solid corporate profits. The
forecast for S&P 500 companies’ earnings growth this year is
6.3%, below the consensus of 11.4%.
Earnings
Morgan Stanley (NYSE:MS) – Morgan Stanley’s
fourth-quarter profit was impacted by $535 million in charges,
resulting in a drop to $1.5 billion, or $0.85 per diluted share,
compared to $2.2 billion, or $1.26 per diluted share, in the
previous year. Lower-than-expected guidance for wealth management
margins disappointed investors, leading to a more than 4% drop in
the bank’s shares on Tuesday. However, the company expects to
benefit from a recovery in investment banking fees and client asset
growth.
Goldman Sachs (NYSE:GS) – In the fourth
quarter, Goldman Sachs reported a profit of $2.01 billion, or $5.48
per share, compared to $1.33 billion, or $3.32 per share, in the
same period last year. Total revenue increased, with equity trading
revenue rising 26% for the quarter. Asset and wealth management
revenues also grew by 23%, totaling $4.39 billion. Investment
banking fees fell 12% to $1.65 billion, while fixed income,
currencies, and commodities (FICC) revenues plunged 24%.
PNC Financial Services (NYSE:PNC) – The PNC
Financial Services Group reported a 44% drop in net profit to $0.9
billion, due to higher charges to replenish the government’s
deposit insurance fund and workforce reduction expenses. Its net
interest income (NII) fell 8% to $3.4 billion. The company expects
an NII of $13.91 billion in 2024, a 5% decrease from the previous
year.
Interactive Brokers (NASDAQ:IBKR) – Interactive
Brokers reported an adjusted profit of $1.52 per share in the
fourth quarter, slightly below analysts’ estimates by 1 cent.
Revenue grew 17%, reaching $1.14 billion, in line with forecasts.
During the period, the number of client accounts at the electronic
broker increased 23%, totaling 2.56 million, while client equity
grew 39%, reaching $426 billion. As a result, the company’s shares
fell 3.5% in Wednesday’s pre-market trading.
Impinj (NASDAQ:PI) – Impinj, an Internet of
Things company, revised its projections for the fourth quarter, now
forecasting revenue of over $70 million, exceeding its previous
forecast of $65.5 million to $68.5 million. Additionally, the
company expects adjusted earnings before interest, taxes,
depreciation, and amortization (EBITDA) for the period to be more
than $2.5 million, an improvement over the previous guidance of
negative $900,000 to positive $700,000. As a result, Impinj’s
shares rose 5.2% in Wednesday’s pre-market trading.
Progress Software (NASDAQ:PRGS) – Progress
Software announced adjusted earnings in the fourth quarter that,
although decreased compared to the previous year, exceeded Wall
Street’s expectations. The company recorded revenue of $177
million, also beating estimates. Additionally, Progress Software’s
outlook for the fiscal year 2024 was in line with analysts’
predictions.
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