Wall Street Highlights: Macy’s Announces Job Cuts, iRobot Shares Plummet Due to Planned Acquisition Block, and More

In the pre-market on Friday, U.S. index futures are rising, extending the increase seen the day before, when the government avoided a shutdown with funding through March. Today, investors await earnings from major financial institutions, as well as data on sales of existing homes and consumer sentiment.

At 05:43 AM, the Dow Jones futures (DOWI:DJI) rose 64 points, or 0.17%. S&P 500 futures were up 0.39%, and Nasdaq-100 futures advanced 0.71%. The yield on 10-year Treasury notes was at 4.146%.

In the commodities market, West Texas Intermediate crude oil for February rose 0.55% to $74.49 per barrel. Brent crude oil for March rose 0.42%, near $79.43 per barrel. Iron ore with a concentration grade of 62%, traded on the Dalian exchange, rose 2.63% to $134.53 per metric ton.

On Friday’s economic agenda, investors await the preliminary reading of the Michigan/Reuters consumer sentiment index for January at 10 AM. At the same time, data on December’s used home sales will be released.

Asian markets showed mixed results. Highlights include Taiwan, where the Taiex index rose 2.63%, driven by a 6.46% jump in TSMC (NYSE:TSM) after announcing better-than-expected earnings and positive projections. Meanwhile, indices in China and Hong Kong fell, but Japan, South Korea, and Australia recorded gains.

European markets are up today, recovering from the initial pessimism of the week. The Davos Forum concludes, with Christine Lagarde, President of the ECB, speaking today, after having moderated expectations of rate cuts on Wednesday. In the United Kingdom, retail sales disappointed, falling 3.2% in December, the biggest drop since January 2021.

On Thursday, U.S. markets had a positive day, with gains in major indices, especially the Nasdaq. The Dow Jones rose 0.54% to 37,468.61 points. The S&P 500 advanced 0.88% to 4,780.93 points. The Nasdaq rose 1.35% to 15,055.65 points. Shares of technology, semiconductors, and airlines led the gains, despite an increase in Treasury yields due to an unexpected drop in unemployment claims.

On Friday’s quarterly earnings front, financial reports are scheduled from Schlumberger (NYSE:SLB), Fifth Third Bank (NASDAQ:FITB), Ally (NYSE:ALLY), Huntington (NASDAQ:HBAN), Travelers (NYSE:TRV), State Street (NYSE:STT), Comerica (NYSE:CMA), Regions (NYSE:RF), among others.

Wall Street Corporate Highlights for Today

Alphabet (NASDAQ:GOOGL) – Google plans to invest $1 billion in building a data center outside London to meet growing demand for internet services in the region. The British government praised the investment as a “huge vote of confidence” in the UK. The data center will also promote energy conservation and job creation.

Meta Platforms (NASDAQ:META) – Meta CEO Mark Zuckerberg reinforced the focus on generative AI and plans to acquire about 350,000 H100 GPUs from Nvidia (NASDAQ:NVDA) by the end of the year, making its system one of the largest. Meta will also explore chips from AMD (NASDAQ:AMD) and is developing a similar GPU chip. The goal is to integrate generative AI into products after years of research and launch AI tools, such as the Llama model and a “Meta AI” chatbot. Zuckerberg linked these investments to the vision of an AR/VR-driven metaverse, which will require new devices. In other news, a Spanish court recognized that a former Facebook moderator’s mental health was affected by his work, determining he is entitled to extra compensation for medical leave. This case may have implications for social media companies’ practices with moderators.

Apple (NASDAQ:AAPL) – Apple’s mixed reality headset Vision Pro is available for pre-order, with deliveries expected on February 2. The starting price of $3,499 and the requirement for precise fit, as well as the lack of streaming app support, may limit initial adoption. YouTube and Spotify (NYSE:SPOT) do not plan to launch apps for the Apple Vision Pro, and their iPad apps will not work on the device at launch. Netflix (NASDAQ:NFLX) also opted not to support the Vision Pro. Apple hopes to expand the mixed reality headset market in the long term. The Vision Pro is one of the priciest offerings in the consumer headset market. Apple expects areas like healthcare, technical training, and education to become key areas for the product. It is Apple’s first major new product category since the launch of the smartwatch in 2015.

Masimo Corp (NASDAQ:MASI) – Masimo CEO Joe Kiani stated that consumers would be better off without Apple’s pulse oximetry technology, following the U.S. International Trade Commission’s decision that Apple violated Masimo’s patents. Apple disagrees, claiming its feature can save lives. Masimo argues that its offering is FDA-approved and more accurate, while Apple provides on-demand spot checks. The legal dispute continues.

Super Micro Computer (NASDAQ:SMCI) – Super Micro’s share value increased by 12.4% after the server and computer product manufacturer announced it expects adjusted earnings in the fiscal second quarter to be between $5.40 and $5.55 per share. This figure exceeds analysts’ estimates, which forecast earnings of $4.51 per share, and is also better than the company’s previous forecast, which was between $4.40 and $4.88 per share. Additionally, the company forecasts sales in the range of $3.6 billion to $3.65 billion, also above Wall Street estimates. Super Micro attributes this positive performance to “strong market and end-customer demand for our rack-scale, AI, and total IT solutions.”

Advanced Micro Devices (NASDAQ:AMD), Nvidia (NASDAQ:NVDA) – AMD recorded a 2.2% increase in pre-market trading on Friday while Nvidia also saw a rise of 1.9%, following both chip companies reaching record closing stock levels on Thursday. AMD saw a 10% increase in its share value this year, while Nvidia experienced a 15% jump. These gains were driven by investor interest in everything related to artificial intelligence.

Amazon (NASDAQ:AMZN) – The European Union’s competition regulator plans to block Amazon.com’s $1.4 billion acquisition of iRobot (NASDAQ:IRBT), citing competition concerns in the robotic vacuum cleaner market. Amazon has not offered solutions to the antitrust concerns and is likely to face rejection. The European Commission has until February 14 to make a decision. In response, IRBT shares are down 36.3% in Friday’s pre-market trading. Additionally, Amazon announced it is laying off less than 5% of employees in its Buy with Prime unit, which offers fulfillment and delivery services to retailers. About 30 employees were affected, but the company promises to support them in finding new roles. Amazon has also conducted layoffs in other areas, including streaming, studio, Twitch, and Audible.

FedEx (NYSE:FDX) – FedEx faces financial challenges as it seeks a more lucrative contract with the U.S. Postal Service and negotiates with its pilots. The failure to renew the contract with the USPS could impact FedEx Express’s profits, and impasses with the pilots could lead to layoffs for the first time in its 52-year history.

Walmart (NYSE:WMT) – Walmart will raise the average annual wages and bonuses of U.S. store managers starting in February, raising the average hourly wage to over $18. The change reflects solid sales growth and aims to retain employees.

Birkenstock (NYSE:BIRK) – Birkenstock warned that its annual profits would be impacted by global expansion, planning to increase the prices of its footwear due to inflation. The company expects an adjusted EBITDA margin of about 30% in 2024, down from 32.4% in 2023. Although revenue exceeded expectations, adjusted earnings per share fell below estimates.

Reddit – Reddit is planning its IPO in March, with an initial public offering of about 10% of the shares. This would mark the first significant IPO of a social media company since Pinterest (NYSE:PINS) in 2019. The company plans to launch its roadshow in March and complete the IPO by the end of the month. Reddit, valued at about $10 billion in 2021, faces competition from platforms like TikTok and Facebook (NASDAQ:META) for advertising budgets.

Kaspi.kz (NASDAQ:KSPI) – Major shareholders of Kaspi.kz, a mobile app company from Kazakhstan, raised approximately $1 billion in an expanded public offering in the U.S. They sold 11.3 million American Depositary Shares of Kaspi.kz at $92 each, a 5.3% discount from the previous closing price in London. The company has a market value of about $18 billion, and the shares began trading on the New York Stock Exchange.

VF Corp (NYSE:VFC) – VF Corp, the maker of the Vans brand, revealed that a cyber incident in December compromised personal data of about 35.5 million consumers but does not anticipate a significant financial impact. The company clarified it did not collect sensitive information and has restored its affected systems.

Macy’s (NYSE:M) – Macy’s is eliminating 2,350 jobs and closing five stores to optimize its operations, representing 13% of the corporate staff and 3.5% of its overall personnel. This comes as investors pressure for taking the company private in a $5.8 billion offer, and the new CEO seeks to cut expenses.

JM Smucker (NYSE:SJM) – JM Smucker Co.’s “core weeks” policy, allowing employees to choose to come to the office every two weeks during the Tuesday-to-Thursday week, has been successful, resulting in lower attrition, higher productivity, and successful recruitment.

Wendy’s (NASDAQ:WEN) – Wendy’s announced the appointment of Kirk Tanner, formerly CEO of Beverages North America at PepsiCo (NASDAQ:PEP), as the new president and CEO of the third-largest burger chain in the United States.

Tilray (NASDAQ:TLRY) – Tilray President and CEO Irwin D. Simon bought shares of the company on the open market for the first time. Following the second-quarter results that beat estimates, Tilray’s shares fell, continuing a downward trend in share prices over the years. Simon acquired 53,700 shares for a total of $101,000 and now owns 2.03 million shares. The company plans to make more acquisitions in 2024, despite not yet being profitable.

Tilray (NASDAQ:TLRY) – Tilray’s President and CEO, Irwin D. Simon, made his first open-market purchase of the company’s stock. Following the second quarter results that exceeded estimates, Tilray’s shares fell, continuing a trend of declining stock prices over the years. Simon acquired 53,700 shares for a total of $101,000 and now owns 2.03 million shares. The company plans to make more acquisitions in 2024, despite still being unprofitable.

Coursera (NYSE:COUR) – Coursera experienced a significant increase in demand for artificial intelligence (AI) courses in 2023, adding a new user every minute on average. The platform plans to collaborate with AI industry leaders like OpenAI and Google’s DeepMind to offer AI courses. Generative AI has not replaced education, but encouraged people to enhance their skills. Coursera registered over 7.4 million enrollments in its 800 AI courses, offering personalized assistance through its AI assistant named “Coach”.

Spirit Airlines (NYSE:SAVE) – Spirit Airlines is seeking to refinance its debt, denying a restructuring following the block of its merger with JetBlue Airways (NASDAQ:JBLU). The company denied restructuring and is focused on strengthening its balance sheet while facing financial challenges and credit pressure.

Boeing (NYSE:BA) – Indonesia authorized the flight of three Boeing 737 MAX 9 planes, with configurations different from the Alaska Airlines plane that made an emergency landing in the US due to a cabin panel breakage. Lion Air’s planes were inspected and cleared to fly from January 11. Differences include a “type II emergency exit door” on Lion Air’s planes and a “mid-exit door plug” on the Alaska Airlines plane.

Alaska Airlines (NYSE:ALK) – Alaska Airlines will extend the suspension of Boeing 737 MAX 9 flights until Sunday due to the ongoing review by the Federal Aviation Administration (FAA) on inspections of 40 aircraft. The FAA requires reinspection before authorizing resumption of flights after January 5.

JB Hunt (NASDAQ:JBHT) – JB Hunt reported a 9% drop in fourth-quarter revenue, totaling $3.3 billion. This decline was attributed to lower volumes in the truckload and integrated capacity solutions units, and a reduction in revenue per load in the truck unit. Profits also decreased to $1.47, compared to $1.92 the previous year, falling below analysts’ expectations of $1.74.

Honda (NYSE:HMC) – Honda will continue focusing on hybrid model and light truck sales in the US due to growing demand. An annual sales increase of 10% to 15% is expected, following the satisfaction of pent-up demand in 2023. Honda also plans to launch three zero-emission vehicles in 2024.

Fisker (NYSE:FSR) – Fisker’s shares have been undergoing a prolonged decline, being labeled as a “meme stock”. Despite the company’s promotion in the electric vehicle market, it failed to meet its production and delivery targets. Short interest is high, and Fisker is reshaping its business model to boost sales and deliveries. However, shares continue to fall, recently losing its most optimistic analyst. Shares are up 2.6% in Friday’s pre-market but have dropped 20% over the week.

Tesla (NASDAQ:TSLA), Ford (NYSE:F), Charter Communications (NASDAQ:CHTR) – U.S. hedge funds focused on short bets against Tesla, Ford, and Charter Communications last year, according to Hazeltree. In terms of industrial sectors, technology sectors led short positions in the U.S., while consumer products and healthcare companies were the most sold in mid and small caps.

JPMorgan Chase (NYSE:JPM) – The CEO of JPMorgan Chase, Jamie Dimon, saw a 4.3% increase in compensation in 2023, reaching $36 million. His package included a base salary of $1.5 million and a performance bonus of $34.5 million, comprising cash and stocks. The raise reflects the bank’s solid performance, including its highest annual profit and the completion of the acquisition of First Republic Bank. Jamie Dimon is estimated to have a net worth of $1.7 billion. In other news, JPMorgan forecasts that the Bank of England will cut interest rates in August, due to a possible drop in inflation. They project a 75 basis-point cut by the end of 2024, bringing the rate to 4.5%. The reduction in inflation might lead them to reach the BoE’s 2% target sooner than anticipated. JPMorgan also raised its UK economic growth forecast to 0.3% in 2024, up from 0.2%. Additionally, JPMorgan Chase appointed Sollo Cho as head of investment banking in South Korea. Cho, who joined the bank in 2018, has helped organize notable IPOs, including Kakao Pay and Hybe Co., and has experience with Deutsche Bank and ABN Amro Bank.

Citigroup (NYSE:C) – Citigroup has partnered with LuminArx Capital to create a private lending vehicle named Cinergy, investing over $2 billion. Traditional banks are collaborating with private equity firms due to increased regulation, anticipating growing demand for risky loans. Additionally, Citigroup’s CEO, Jane Fraser, held a conference call to discuss the bank’s restructuring and announced layoffs, including managers in markets, risk, and investment banking. Some positions will be eliminated starting February 1st. The bank plans to cut 20,000 jobs over the next two years.

Wells Fargo (NYSE:WFC) – Employees at a Wells Fargo branch in Atwater, California, rejected forming a union, becoming the first Wells Fargo location to do so. Other locations, such as Bethel, Alaska, have joined the union. Some employees claimed pressure, while others denied it. Wells Fargo acknowledged the vote and thanked the employees.

Morgan Stanley (NYSE:MS), Carlyle Group (NASDAQ:CG) – Wall Street heads, including Ted Pick of Morgan Stanley and David Rubenstein of Carlyle Group, foresee an increase in mergers and acquisitions, driven by the Federal Reserve’s reduction of interest rates. They believe interest rates will soon fall, spurring more M&A and private equity activity. The optimism contrasts with the previous year, when recession concerns slowed activity. Infrastructure is seen as an attractive asset class for investors, driving more acquisitions.

Moody’s (NYSE:MCO) – The default rate of low-credit-grade companies in the U.S. is expected to rise in the first quarter of 2024, reaching 5.8%, up from 5.3% in November, before stabilizing at 4.1% by the end of the year, according to Moody’s. Healthcare companies lead the risk list.

ArcelorMittal (NYSE:MT) – Italy will place the steel plant Ilva under special administration to ensure its continuous operation, following conflicts between the government and ArcelorMittal, the majority shareholder of Acciaierie d’Italia, formerly Ilva. ArcelorMittal, holding 62%, may legally contest the decision.

PPG Industries (NYSE:PPG) – PPG announced an adjusted profit of $1.53 per share in the fourth quarter, beating estimates by 4 cents. Sales also saw a 4% increase, totaling $4.35 billion during the period. However, the paint and coatings company’s forecasts for the first quarter did not meet expectations. PPG stated it expected moderate economic conditions in the U.S. during the first half of 2024 but predicted an improvement in demand in China.

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