MKC McCormick and Co

US index futures are declining in Tuesday’s pre-market as investors monitor the rise in Treasury yields.

At 07:31 AM, Dow Jones futures (DOWI:DJI) fell 90 points, or 0.27%. S&P 500 futures dropped 0.32%, and Nasdaq-100 futures were down 0.44%. The yield on 10-year Treasury bonds stood at 4.735%, adding to yesterday’s 10-point increase.

In the commodities market, West Texas Intermediate crude oil for November fell 0.42% to $88.45 per barrel. Brent crude oil for December dropped 0.61% to near $90.14 per barrel.

In the U.S. economic calendar for Tuesday, investors are awaiting a speech by the President of the Federal Reserve Bank of Atlanta, Raphael Bostic, at 08:00 AM. At 10:00 AM, the Job Openings and Labor Turnover Survey (JOLTS) report for August will be released, with expectations of 8.8 million job openings.

In Europe, utility company stocks, considered fixed-income alternatives, experienced significant declines, while retail stocks were pressured by a warning from online retailer Boohoo Group Plc, resulting in a 10% drop in Boohoo’s shares.

Asian financial markets faced limited liquidity on Tuesday, with the mainland China and Seoul markets closed. In Hong Kong, the Hang Seng index fell by 2.7%. Shares of real estate developer Evergrande, after resuming trading, surged by 60% and closed with a 38% gain, driven by expectations of a new debt restructuring plan. However, other real estate companies, such as Country Garden (-7.05%) and Longfor (-6.5%), experienced declines. Concerns about the Chinese economy affected all sectors. In Tokyo, the Nikkei 225 index fell by 1.64% to its lowest level in four months due to rising U.S. interest rates and hawkish comments from the Federal Reserve.

At Monday’s close, the indices showed a mixed performance, reacting to the increase in long-term interest rates in the United States and the ISM industrial index, which pointed to greater strength in the country’s economy. The Dow Jones fell 74.15 points or 0.22% to 33,433.35 points. The S&P 500 rose 0.34 points or 0.01% to 4,288.39. The Nasdaq Composite rose 88.45 points or 0.67% to 13,307.77 points.

During the session, yields on 10-year US Treasury bonds reached their highest levels since 2007, closing the day near 4.70%. The ISM industrial index, which is a crucial indicator for the US economy, recovered, reaching 49.8 points in September. This indicates that the industrial sector is almost stable, after months of contraction. The number was well above market expectations, but a subcomponent of the index that measures prices paid by producers showed a more significant drop than expected, suggesting that despite the economic recovery, inflation should continue to decline in the short term.

On Tuesday’s corporate earnings front, investors will be watching, before the market opens, reports from McCormick (NYSE:MKC) and Trinity Biotech (NASDAQ:TRIB). After closing, results from Cal-Maine Foods (NASDAQ:CALM) and Novagold Resources (AMEX:NG) will be awaited.

Wall Street Corporate Highlights for Today

Apple (NASDAQ:AAPL) – Apple acknowledged that new iPhones may heat up more due to a bug in iOS 17 and third-party apps like Asphalt 9, Instagram and Uber. A corrective update will be released, and the company has assured that there is no security risk. In other news, the Dutch competition watchdog (ACM) fined Apple $53 million for violating competition laws on dating apps in the Netherlands. Apple objected, but its objections were overruled. The company plans to appeal the decision in Dutch courts. In China, Apple now requires new apps on the App Store to present government licenses, bringing it in line with local regulations.

Microsoft (NASDAQ:MSFT) – Microsoft CEO Satya Nadella criticized Google (NASDAQ:GOOGL) for exclusive deals with publishers for AI content. Testifying at an antitrust trial, Nadella commented on the competition for content to train artificial intelligence. He also mentioned Microsoft’s failed attempt to make Bing the default on Apple iPhones and acknowledged Google’s dominance in search.

Meta Platforms (NASDAQ:META) – Meta Platforms has proposed charging a monthly fee for ad-free use of Instagram and Facebook in Europe, reacting to EU rules on personalized advertising. The suggested price is 10 euros per month on desktop and 13 euros on mobile devices. The initiative represents a significant change for Meta, traditionally supported by advertising. The proposal could still face resistance from EU regulators.

Taiwan Semiconductor Manufacturing (NYSE:TSM) – Since June, shares of Taiwan Semiconductor Manufacturing have fallen 11%, reducing its market capitalization by $77 billion due to concerns about weak demand and the macroeconomic outlook. Volatility suggests more declines. Leading chipmaker TSMC has faced disappointments with its 3-nanometer chip. Analysts remain cautious, predicting a slow recovery. However, TSMC still has positive points, such as its dominant position in the market.

Micron Technology (NASDAQ:MU) – Japan approved subsidies worth $1.3 billion for Micron’s Hiroshima factory, seeking to boost production of advanced chips. The funds will cover equipment from ASML Holding NV (NASDAQ:ASML) and represent 40% of Micron’s investment in Japan. This initiative aims to promote economic security and combat challenges faced in the US and China. Prime Minister Kishida aims to triple domestic chip production by 2030, strengthening Japan’s technological position.

JPMorgan Chase (NYSE:JPM) – Jamie Dimon, CEO of JPMorgan, said that artificial intelligence (AI) improves workers’ lives and is crucial to the bank’s future. Despite the benefits, Dimon warns of risks, such as misuse of AI by malicious individuals.

Goldman Sachs  (NYSE:GS) – Wall Street strategists, including those at Goldman Sachs, warn about the negative impact of higher interest rates on stocks. They highlight the growing gap between the S&P 500 and real 10-year rates. Despite the concerns, some still see optimism in the market.

Discover Financial Services (NYSE:DFS) – Discover Financial Services has agreed to improve its compliance and governance with the Federal Deposit Insurance Corp FDIC. The bank has already been working to strengthen its compliance management following previous account classification issues.

Bain Capital (NYSE:BCSF) – Bain Capital invested US$200 million in Vietnamese conglomerate Masan Group, potentially reaching US$500 million. This agreement is expected to intensify competition in Vietnam’s retail market. Masan, which manages more than 3,200 stores, sees growth with the investment.

Ally Financial (NYSE:ALLY) – Due to the turbulent economy, Ally Financial will cut 5% of its employees. After pausing hiring last year, the decision to reduce was made. The company, based in Detroit, is renowned for auto loans.

KKR and Company (NYSE:KKR) – KKR sold a 500,000-square-foot industrial portfolio for more than $560 million, spanning more than 50 buildings across multiple cities. Demand for such spaces has grown due to the rise of online commerce. Since 2021, KKR has sold 21 million square feet. In addition, the KKR fund is exclusively negotiating the purchase of Eugin fertility clinics in Spain and Portugal from Fresenius, valued at approximately US$528.55 million. KKR would make the acquisition with a Spanish partner and already has assets in the sector.

Berkshire Hathaway (NYSE:BRK.B), HP Inc (NYSE:HPQ) – Warren Buffett’s Berkshire Hathaway sold 5.1 million shares of HP, totaling $142 million. The company now owns 100.9 million shares of HP, valued at $2.6 billion. This sale reduced its stake in HP to 10.2%.

Visa (NYSE:V) – Visa launched a $100 million fund for generative AI startups. Generative AI, which creates new content from previous data, could impact commerce, according to Visa.

WeWork (NYSE:WE) – WeWork withheld interest payments of $95 million to restructure its capital. The company, which faced challenges after its failed IPO in 2019, has 30 days to pay before a possible default. Shares are down 1.7% in premarket trading Tuesday.

General Motors (NYSE:GM), Ford Motor (NYSE:F) – General Motors and Ford laid off 500 workers at four plants due to the United Auto Workers strike. The UAW has submitted a new contract offer to GM, but significant differences remain. The strike has already cost companies millions and affected production and distribution.

General Motors (NYSE:GM), Stellantis (NYSE:STLA) – Biden’s proposal for fuel economy standards through 2032 could cost GM $6.5 billion and Stellantis $3 billion in fines. The American Automotive Policy Council claims the penalties are “alarming.” The letter requests reconsideration, highlighting disproportionate challenges for U.S. automakers.

Ford Motor (NYSE:F) – NHTSA is expanding its investigation into 708,000 Ford vehicles due to engine failures linked to a faulty valve. This may cause a loss of power in 2021-2022 Ford Bronco, Edge, Explorer, F-150, Lincoln Aviator and Nautilus vehicles. Ford is cooperating in the investigation.

Rivian (NASDAQ:RIVN) – Electric vehicle maker Rivian reported quarterly deliveries above expectations, increasing production to meet demand. Based in California, the company plans to produce 52,000 vehicles in 2023. While rivals such as Tesla have slashed prices, Rivian has focused on cutting costs.

Tesla (NASDAQ:TSLA) – Tesla missed third-quarter delivery estimates due to the shutdown to update the Model 3. Analysts predict recovery in the fourth quarter. The company maintained its annual target of 1.8 million vehicles. In other news, Tesla has reintroduced the rear-wheel drive version of the Model Y in the US at a starting price of $43,990, replacing the all-wheel drive variant.

Uber (NYSE:UBER) – Uber is facing a legal dispute in the Netherlands over whether its drivers are classified as employees or freelancers. The Amsterdam Court of Appeal requested guidance from the Supreme Court due to the relevance of the issue. Previous decisions favored the rights of workers in similar companies.

Boeing (NYSE:BA) – Boeing intends to increase production of its 737 jet to a record 57 monthly by July 2025, reflecting the increase in orders and the recovery after the 737 MAX crisis.

Spirit AeroSystems  (NYSE:SPR) – Spirit AeroSystems CEO Tom Gentile has resigned due to industrial challenges, being replaced on an interim basis by Patrick Shanahan, a former Boeing executive. Shanahan, a board member since 2021, takes over immediately as Spirit searches for a new CEO. Gentile will serve as a temporary consultant. The company has faced recent financial and production setbacks.

Delta Air Lines (NYSE:DAL) – Delta Air Lines has reported that some overhauled engines contain nonconforming parts. Working to replace them under FAA guidelines, Delta did not reveal the supplier. AOG Technics, previously involved in irregularities, certified the parts.

Ryanair (NASDAQ:RYAAY) – In September, Ryanair carried 9% more passengers than the previous year, totaling 17.4 million. Average occupancy was 94%. The company expects a 9% increase in annual traffic, although it has faced plane delays and strikes.

Airbnb (NASDAQ:ABNB) – Brian Chesky, CEO of Airbnb, faced challenges in 2023, such as controversy over profit margins, competition with Vrbo, and new regulations in New York. Chesky recognized the need to stabilize the company’s foundation before innovating. Keybanc analysts reduced Airbnb’s rating to “sector weight” from “overweight” without setting a target price. They argued that the company’s margins have already reached their near-term maximum and anticipate that revenue growth could slow to 11% in 2024 as occupancy rate and average daily growth slow. The company’s shares fell 2.4% in trading before the market opened.

Kellanova (NYSE:K), WK Kellogg (NYSE:KLG) – On Monday, Kellanova announced the spin-off of its cereal business, forming WK ​​Kellogg Co. Kellanova shareholders received shares in WK Kellogg under the agreement. WK Kellogg shares closed down 9.1% and Kellanova fell 6%. The reorganization aims to optimize resources and improve supply chain efficiency. However, investors were cautious due to concerns about Kellanova’s debt and declining demand for cereals. Goldman Sachs analysts began their review of WK Kellogg (KLG) with a sell recommendation and set a price target of $11.

Birkenstock  – Birkenstock is targeting a $10 billion valuation in its US IPO, planning to sell 32 million shares at between $44 and $49 each. Despite the uncertain IPO market, the company, backed by L Catterton, is moving forward with its plans. Financière Agache and other funds have expressed interest in buying shares. Birkenstock, known for comfort, has recently gained fashion prominence and plans to use IPO funds to pay down debt.

Jabil (NYSE:JBL) – Jabil announced a $200 million restructuring following the BYD Electronics deal, including staff cuts. BYD plans to buy Jabil’s mobile electronics unit for $2.2 billion. Details about the layoffs were not disclosed.

Oddity Tech (NASDAQ:ODD) – Oddity Tech, a beauty company, announced that it anticipates its third quarter to be one of its strongest yet. An increase in annual revenue for the quarter is estimated to be between 29% and 31%, exceeding initial forecasts of 18% to 23%. Additionally, Oddity expects a gross margin of 68.5%, exceeding previous expectations by about 100 basis points.

Novo Nordisk (NYSE:NVO) – The U.S. Patent Office court upheld two Novo Nordisk patents for its drugs Wegovy and Ozempic, rejecting challenges from Mylan Pharmaceuticals. Novo has promised to defend its intellectual property, while a decision on a third patent is expected soon.

Eli Lilly (NYSE:LLY) – The FDA has expressed concerns about Eli Lilly’s treatment for atopic eczema, citing problems with a third-party manufacturing inspection. Eli Lilly said there were no concerns about the drug’s clinical data.