U.S. index futures point to a negative opening this Tuesday,
signaling a cautious reaction from investors to recent mixed
corporate earnings and unfavorable economic indicators coming from
Europe. The market also remains in anticipation of insights from
Federal Reserve members and the impending release of American trade
balance data, elements that may provide additional direction for
market trends.
At 06:42 AM, Dow Jones futures (DOWI:DJI) fell 123 points, or
0.36%. S&P 500 futures dropped 0.39% and Nasdaq-100 futures
fell 0.33%. The yield on 10-year Treasury notes was at 4.616%.
In the commodities market, West Texas Intermediate crude for
December fell 1.56%, to $79.56 per barrel. Brent crude oil for
January delivery dropped 1.68% near $83.75 per barrel. Iron ore
with a 62% concentration, traded on the Dalian exchange, fell
0.48%, priced at $126.72 per ton.
On the economic agenda this Tuesday, the focus in the financial
market falls on a series of speeches by Federal Reserve members,
which are set to take place throughout the day, promising to impact
investor expectations. Investors are also waiting for the 08 AM
release of trade balance data, where a deficit of $59.9 billion for
September is anticipated.
Subsequently, at 10 AM, the market awaits the release of the
November economic optimism index, which provides an updated
perspective on economic sentiment. Later in the afternoon, at 3 PM,
the focus turns to the numbers for consumer credit in August, with
an expected increase of $10 billion. Concluding the day, the
attention of energy market operators turns to the American
Petroleum Institute (API) report, scheduled for 4:30 PM, which will
reveal the levels of oil inventories from the past week.
In Asia, markets closed down after a 6.4% drop in China’s
exports, even after recent stimulus efforts. In Europe, in addition
to corporate earnings, investors are reacting to the
larger-than-expected drop in Germany’s industrial production. At
8:30 AM, a speech is scheduled from the Chairman of the Supervisory
Board of the European Central Bank (ECB), Andrea Enria.
U.S. stocks closed modestly higher on Monday as expectations for
future U.S. interest rates showed growth, adjusting after last
week’s enthusiasm. Long-term interest rates rose by over 10 basis
points, with the 10-year rate approaching 4.7%. Market attention
turned to the upcoming speeches by Fed members, especially
President Powell. The Dow Jones inched up 34.54 points or 0.10% to
34,095.86 points, its highest closing level in over a month. The
S&P 500 rose 0.18%, and the Nasdaq Composite gained 0.30%.
On Tuesday’s corporate earnings front, investors will watch for
reports from Uber (NYSE:UBER),
DataDog (NASDAQ:DDOG), DR Horton
(NYSE:DHI), Zimmer Biomet (NYSE:ZBH),
Emerson (NYSE:EMR), before the market opens. After
the close, reports are expected from Rivian
(NASDAQ:RIVN), Devon Energy (NYSE:DVN),
Occidental Petroleum (NYSE:OXY), Gilead
Sciences (NASDAQ:GILD), Mosaic
(NYSE:MOS), among others.
Wall Street Corporate Highlights for Today
Meta Platforms (NASDAQ:META) – Meta has banned
political campaigns and advertisers from regulated sectors from
using its new generative AI advertising products. The move aims to
prevent the spread of electoral misinformation. The ban affects ads
related to housing, employment, credit, social issues, elections,
politics, health, pharmaceuticals, and financial services.
Additionally, the Chan Zuckerberg Initiative, led by Mark
Zuckerberg, sold shares in DoorDash and the iShares Core MSCI
Emerging Markets ETF (LSE:0A3E) while increasing its investment in
the Vanguard FTSE Europe ETF in the third quarter. The changes were
disclosed in an SEC filing. DoorDash (NASDAQ:DASH) was completely
divested, while the investment in the European ETF was
significantly increased.
Intel (NASDAQ:INTC) – Intel is leading the race
to secure billions of dollars in funding for secure microchip
production facilities for U.S. military and intelligence use. The
facilities aim to reduce dependence on imported chips from East
Asia and would be funded by the $53 billion Chips Act from the
Biden administration. Additionally, Intel canceled a planned
investment in Vietnam that could have nearly doubled its operations
in the country. Vietnam was seeking to expand its chip industry,
but Intel suspended the expansion plan citing concerns about power
supply and excessive bureaucracy.
Nvidia (NASDAQ:NVDA) – U.S. restrictions on
Nvidia have opened an opportunity for Huawei in the AI chip market.
While initially overshadowed by Nvidia, Huawei has launched the
Ascend 910B, comparable to Nvidia’s A100. Huawei aims to secure a
significant share of the $7 billion AI chip market in China,
bolstered by government support and investments in
semiconductors.
Baidu (NASDAQ:BIDU) – China’s AI leader Baidu
has ordered 1,600 Ascend AI chips from Huawei as an alternative to
Nvidia (NASDAQ:NVDA) in a $61.83 million order to be delivered by
year-end, reflecting U.S. pressure on Chinese tech companies.
Alibaba (NYSE:BABA), JD
(NASDAQ:JD) – Alibaba and JD.com stocks are down in pre-market
trading on Tuesday following mixed trade data from China. Chinese
exports have fallen for the sixth consecutive month in October,
while imports surprisingly increased, suggesting stronger domestic
demand.
WeWork (NYSE:WE) – WeWork, a SoftBank
Group-backed startup, has sought bankruptcy protection in the U.S.
due to onerous leases and a decline in demand for shared office
spaces. SoftBank has agreed to convert debt into equity,
eliminating around $3 billion in debt. The company expects to
continue operating normally outside of the U.S. and Canada.
Tapestry (NYSE:TPR), Capri
Holdings (NYSE:CPRI) – The U.S. Federal Trade Commission
(FTC) has requested more information about the $8.5 billion deal
between Tapestry and Capri Holdings. The companies plan to
consolidate luxury brands like Kate Spade, Jimmy Choo, and Versace
to compete with larger rivals in the European luxury market. The
deal is expected to be completed in 2024.
Walt Disney (NYSE:DIS) – Walt Disney has hired
Hugh Johnston, former PepsiCo (NASDAQ:PEP)
executive, as CFO to address challenges in its TV business and
investor pressure. The hiring aims to strengthen the leadership
team amid a restructuring.
Roku (NASDAQ:ROKU) – Cathie Wood’s Ark
Innovation ETF sold Roku shares for the first time since August,
following the company becoming its largest position. The sale
followed a 42% increase in Roku shares after robust quarterly
results. Ark is the second-largest shareholder in Roku, with an
8.35% stake.
AMC Entertainment (NYSE:AMC) – AMC
Entertainment shares have recently shown bullish activity, with
more purchases of longer-term bonds seen as positive signs. This
has occurred in a more positive fixed-income market environment and
the success of a Taylor Swift film shown by AMC. AMC shares have
risen 9.9% in the last five days, outperforming the S&P 500
index. The company is expected to release its third-quarter results
soon.
Starbucks (NASDAQ:SBUX) – Starbucks will
increase hourly pay for its retail workers in the U.S. by at least
3% starting in 2024. The company plans to expand its store network
and raise the hourly income for baristas, with the possibility of
larger increases for longer-tenured employees.
Citigroup (NYSE:C) – Citigroup is considering
job cuts of at least 10% in several of its core businesses as part
of a reorganization led by CEO Jane Fraser. The restructuring aims
to simplify the bank and boost its stock price. Discussions are in
the early stages, and the number of job cuts may change.
Goldman Sachs (NYSE:GS) – According to a note
from Goldman Sachs, hedge funds aggressively bought U.S. stocks
last week, driving a rally with a focus on technology stocks. The
buying activity was the most intense in two years, and some short
positions became expensive as stock prices rose. Health and
financial stocks were sold, with the activity mainly focused on
North America.
Morgan Stanley (NYSE:MS) – James Gorman, CEO of
Morgan Stanley, plans to step down as chairman by the end of 2024
after relinquishing his CEO position to Ted Pick in January. Gorman
has expressed his desire to teach, spend more time with family, and
play golf, ruling out a foray into politics.
HSBC (NYSE:HSBC) – Global stocks are poised for
a double-digit rally in 2024 if the Federal Reserve adjusts its
monetary policy and avoids a recession, according to HSBC Holdings
Plc strategists. They expect the FTSE All-World index to finish the
next year with nearly a 10% increase. The team sees technology and
consumer sectors as preferred.
Moody’s (NYSE:MCO) – Credit rating agency
Moody’s is establishing a dedicated unit for private credit
research and assessment, led by Ana Arsov. With over $1.3 trillion
in assets under management, the global private credit market
represents about 12% of the alternative market, attracting
long-term investors. Moody’s aims to provide reliable analysis for
this sector.
Cigna (NYSE:CI) – Health insurer Cigna is
considering selling its Medicare Advantage business due to margin
profit challenges and changes in U.S. government reimbursement. The
company is exploring options with an investment bank, and the
business could be worth billions of dollars.
Sanofi (NASDAQ:SNY) – Sanofi is being
investigated for alleged market manipulation in France. The
preliminary investigation is related to the alleged dissemination
of misleading information about the company’s financial
communication, involving the launch of the Dupixent drug in 2017.
Sanofi denies knowledge of the investigation. The company’s shares
fell up to 1.2% in pre-market trading.
Bristol Myers Squibb (NYSE:BMY) – Bristol Myers
Squibb has acquired the experimental therapy ORM-6151 from Orum
Therapeutics to treat a type of blood cancer for up to $180
million. The treatment received FDA authorization for an initial
study and involves an initial payment of $100 million and milestone
payments.
Bumble (NASDAQ:BMBL) – Whitney Wolfe Herd,
founder of Bumble, will step down as CEO of the dating app operator
and will be replaced by Lidiane Jones, a seasoned executive from
Slack. The news caused the company’s shares to drop on Monday.
Whitney will remain as executive chairman.
Airbnb (NASDAQ:ABNB) – An Italian judge has
ordered the seizure of $836.40 million from Airbnb’s European
headquarters in Ireland due to alleged tax evasion, citing
non-payment of 21% of hosts’ income to Italian tax authorities.
Three former managers are also under investigation. Airbnb denies
wrongdoing.
General Electric (NYSE:GE) – General Electric’s
aviation unit has agreed to pay $9.4 million to settle federal
government allegations that a Massachusetts factory sold defective
parts to the U.S. Army and Navy. The settlement resolves claims
that GE Aerospace violated the Federal False Claims Act.
Kinder Morgan (NYSE:KMI), NextEra
Energy (NYSE:NEE) – Pipeline operator Kinder Morgan will
acquire NextEra Energy Partners’ pipelines in South Texas for $1.82
billion, amid growing consolidation in the sector. The transaction
is expected to be completed in the first quarter of 2024.
General Motors (NYSE:GM) – GM plans to
temporarily suspend production of its fully autonomous Cruise
Origin van, following the unit’s announcement of a pause in all
driverless operations. Cruise CEO Kyle Vogt noted that the company
has already produced hundreds of Origin vehicles, which is
sufficient for the short term. Additionally, GM plans to build a
more affordable version of the Chevrolet Bolt in Kansas and a new
series of premium electric vehicles for the Cadillac and Chevrolet
brands in Michigan as part of its $13.3 billion investment plan in
U.S. facilities through 2028.
Toyota Motor (NYSE:TM) – Toyota will extend
production cuts at a joint venture in China for three more months
due to increasing competition. Sales to dealers will be reduced to
66,000 units in December, 60,000 in January, and 38,000 in
February.
Ford Motor (NYSE:F), S&P
Global (NYSE:SPGI) – S&P Global Ratings has upgraded
Ford Motor Co.’s rating to BBB-, restoring its investment grade
after a downgrade in 2020. The agency cited expectations of strong
EBITDA margins and a robust cash balance. The news followed a wage
increase agreement with the UAW union and mixed quarterly
results.
Tesla (NASDAQ:TSLA) – Tesla will raise prices
of Model Y variants in China following an October update. The Model
Y is one of the best-selling electric vehicles in China, and Tesla
is adjusting prices after a period of competitive cuts and
increases in the Chinese EV market.
General Dynamics (NYSE:GD) – The United Auto
Workers (UAW) union announced on Monday that members at General
Dynamics factories in Ohio, Michigan, and Pennsylvania voted in
favor of a new labor agreement. The four-year agreement includes a
14% wage increase and protection against inflation.
Earnings
UBS (NYSE:UBS) – UBS Group AG reported a loss
of $785 million in the third quarter due to expenses related to the
acquisition of Credit Suisse, even though it demonstrated stability
in its wealth management division, with net inflows of $22 billion.
UBS CEO Sergio Ermotti indicated that the bank’s share buyback
program is likely to resume in 2024. Ermotti mentioned that the
bank is finalizing its three-year plan to determine the amount to
be returned to shareholders. The share buyback program had been
paused earlier this year.
Tripadvisor (NASDAQ:TRIP) – The online travel
company saw a nearly 12% increase in pre-market trading on Tuesday
after exceeding third-quarter projections. Tripadvisor reported
adjusted earnings of 52 cents per share with revenue of $533
million, surpassing LSEG analysts’ expectations of 47 cents per
share and $505 million in revenue.
Hims & Hers Health (NYSE:HIMS) – The
telemedicine company experienced an over 8% increase in pre-market
trading. Hims & Hers raised its full-year revenue forecast to
$868 million to $873 million, up from the previous estimate of $830
million to $850 million. The company also raised its expectations
for full-year adjusted EBITDA.
Vertex Pharmaceuticals (NASDAQ:VRTX) – The
biotechnology company fell short of revenue estimates in the third
quarter. Vertex reported adjusted earnings of $4.08 per share on
revenue of $2.48 billion, falling short of LSEG analysts’
expectations of $3.97 per share and $2.50 billion in revenue.
Veeco Instruments (NASDAQ:VECO) – Veeco
Instruments exceeded profit and revenue expectations in the third
quarter. The thin-film processing equipment manufacturer reported
adjusted earnings of 53 cents per share and revenue of $177.4
million, surpassing FactSet analysts’ predictions of 37 cents per
share and $168.2 million in revenue.
Alteryx (NYSE:AYX) – Alteryx shares rose 17% in
pre-market trading after the software company reported quarterly
results with a smaller-than-expected loss and sales that exceeded
analysts’ estimates. The net loss was $50 million, or 70 cents per
share, while revenue increased 8% to $232 million. Alteryx shares
had fallen 40% this year, compared to a 14% increase in the S&P
500 index.
International Flavors & Fragrances
(NYSE:IFF) – International Flavors & Fragrances announced it
would continue its cooperation agreement with Icahn Capital (IEP).
The parties agreed to appoint one director from Icahn and one
mutually agreed-upon director to the IFF board for the 2024 proxy
season. Additionally, IFF reported third-quarter adjusted earnings
and revenue that exceeded analysts’ estimates.
Fabrinet (NYSE:FN) – Fabrinet reported
better-than-expected results for the fiscal first quarter, both in
terms of revenue and net income. Fabrinet announced adjusted
earnings of $2 per share with revenue of $685.5 million, surpassing
FactSet analysts’ predictions of $1.85 per share in earnings and
$659.2 million in revenue.
Goodyear Tire & Rubber (NASDAQ:GT) –
Goodyear Tire & Rubber reported mixed third-quarter results.
The company reported a loss of $89 million but highlighted lower
raw material costs and signs of improvement in sales volume, as
well as strong travel demand in the U.S. However, when adjusted for
extraordinary items, earnings were 36 cents per share, exceeding
analysts’ expectations of 19 cents per share.
Sanmina (NASDAQ:SANM) – Shares of the
electronics manufacturing company dropped nearly 11% in pre-market
trading after Sanmina provided a downbeat outlook for the first
fiscal quarter. Management stated that the company’s first-quarter
outlook is “trending down sequentially,” and Sanmina expects
challenges in the next two quarters.
Coterra Energy (NYSE:CTRA) – The energy company
saw a 3% increase in pre-market trading after Coterra Energy
reported adjusted earnings of 50 cents per share in the third
quarter, surpassing analysts’ expectations of 44 cents per share,
according to FactSet. The company also raised its production
outlook for the full year.
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