In the pre-market on Monday, U.S. index futures are showing a
downward trend. Investors are currently assessing the impact of the
recent change in the U.S. rating outlook. Additionally, there is
growing anticipation for the inflation data, set to be announced
tomorrow, which is influencing market decisions.
At 05:55 AM, Dow Jones futures (DOWI:DJI) fell 4 points, or
0.01%. S&P 500 futures fell 0.18% and Nasdaq-100 futures fell
0.23%. The yield on 10-year Treasury notes was at 4.63%.
In the commodities market, West Texas Intermediate crude oil for
December rose 0.08%, to $77.23 per barrel. Brent oil for January
rose 0.06% to around $81.48 per barrel. Iron ore with a 62%
concentration, traded on the Dalian exchange, rose 1.68%, priced at
$132.42 per ton.
On the economic agenda this Monday, investors await, at 08:50
AM, a speech by Fed Director Lisa Cook, while at 11:00 AM, the
monthly inflation expectation for October will be released.
Finally, last month’s budget balance will be announced at 14:00 PM,
with the consensus predicting a deficit of $30 billion.
Asian markets recorded gains, influenced by Japan’s economy,
especially after producer prices in October fell short of
expectations.
Meanwhile, in Europe, stock markets are showing positive
performance at the start of trading, reflecting recent statements
by Luis de Guindos, Vice President of the European Central Bank
(ECB). Guindos mentioned that despite inflation in the eurozone
gaining temporary momentum in the coming months due to the
calculation method used, economic growth in the region is expected
to remain moderate in the short term.
Even with a reduction in Treasuries at the beginning of the
week, U.S. markets may not benefit from it. This is due to Moody’s
action, which on Friday changed the U.S. AAA rating outlook from
stable to negative, citing concerns about the high fiscal deficit.
Concurrently, U.S. inflation and the meeting scheduled between Joe
Biden and Xi Jinping on Wednesday are also in investors’ focus.
This meeting between the two largest global powers aims to address
divergences, including their stances on wars and export control
policies.
At the close on Friday, the S&P 500 rose above 4,400 points
due to the performance of large technology companies. The Dow Jones
advanced 391.16 points, or 1.15%. The S&P 500 rose 67.89
points, or 1.56%. The Nasdaq surged 276.66 points, or 2.05%. Future
interest rates stabilized, with the yield on U.S. 10-year bonds
below 4.7%. FOMC members adopted a more cautious tone on interest
rate hikes. The U.S. consumer confidence index for November was
below expectations (60.4 vs. 63.7). Inflation expectations
increased (4.4% for next year, 3.2% for 5-10 years).
In Monday’s corporate earnings forefront, investors will be
attentive to reports from Monday.com
(NASDAQ:MNDY), Tyson Foods (NYSE:TSN),
Tower Semiconductor (NASDAQ:TSEM),
Intuitive Machines (NASDAQ:LUNR) before the market
opens. After the close, reports from Fisker
(NYSE:FSR), Rumble (NASDAQ:RUM),
Li-Cycle (NYSE:LICY), Terawulf
Inc (NASDAQ:WULF), Sper Therapeutics
(NASDAQ:SPRO), among others, are expected.
Wall Street Corporate Highlights for Today
Apple (NASDAQ:AAPL) – Chinese smartphone maker
Xiaomi gained market value and success with its series 14, while
Apple‘s sales fell in China. Xiaomi is exploring
the electric vehicle sector and other business areas, with positive
growth prospects.
Alphabet (NASDAQ:GOOGL) – Alphabet’s Google is
in talks to invest hundreds of millions of dollars in Character.AI,
a growing AI chatbot startup. The investment would deepen the
existing partnership, and the company is also seeking venture
capital funding, potentially valuing it at over $5 billion.
Meta Platforms (NASDAQ:META),
Snap (NYSE:SNAP) – Meta
Platforms, owner of Facebook, and Snap
have been given until December 1st by the European Union to provide
more information on how they protect children from illegal and
harmful content, under threat of investigation and fines under new
EU online content rules.
Nvidia (NASDAQ:NVDA) – U.S. restrictions on
China have resulted in a “catch me if you can” game with
Nvidia and other companies, accelerating Chinese
innovation. The Global Times stated that this harms both countries
and forces the search for solutions to comply with regulations,
driving innovation in China.
Disney (NYSE:DIS) – The latest Marvel movie,
“The Marvels,” had a disappointing opening weekend, earning just
$47 million in the U.S., well below expectations. The actors’
strike and the evolution of public tastes were cited as possible
reasons for the weak performance. Disney postponed
other Marvel films and plans to cut production costs.
Booking.com (NASDAQ:BKNG) –
Booking.com agreed to pay about $100.25 million to
settle a tax dispute in Italy, related to VAT evasion on holiday
rentals from 2013 to 2019.
Airbnb (NASDAQ:ABNB) – This week, the European
Union and the European Parliament are expected to agree on lenient
rules for Airbnb. Some disagree with the Spanish
proposal to allow cities to ban Airbnb in certain
areas. Airbnb sees the EU rules as a milestone for
short-term rental companies and wishes to collaborate with cities
and governments to support sustainable tourism and protect housing.
This contrasts with the EU’s strict approach towards Big Techs.
Airbnb must provide data and face penalties for
non-compliance.
Livent (NYSE:LTHM) – U.S. lithium company
Livent will start meetings with Australian
investors of Allkem before a vote to approve a $10.6 billion merger
that would create the world’s third-largest producer.
Exxon Mobil (NYSE:XOM) – Exxon
Mobil plans to start lithium production for electric
vehicle batteries in Arkansas by 2026, partnering with Tetra
Technologies, seeking to expand its presence in the EV sector. The
company also controls areas for future lithium production in
Arkansas.
BP (NYSE:BP), Shell
(NYSE:SHEL), Edison (NYSE:ED) –
BP, Edison, and
Shell have asked the EU-U.S. to intervene in a
dispute with Venture Global LNG due to non-compliance with gas
supply contracts. The companies seek to pressure Venture Global LNG
to honor the signed contracts.
DR Horton (NYSE:DHI) – Homebuilder DR
Horton exceeded profit and revenue expectations, despite
concerns in the real estate sector. Its shares have risen 37.6%
this year. The lack of existing homes has boosted demand for new
homes, especially among first-time buyers. Horton reduced mortgage
rates and introduced lower-cost plans.
Moody’s (NYSE:MCO) – Moody’s
downgraded the U.S. credit rating outlook to “negative” due to
large fiscal deficits and declining debt affordability. This has
drawn criticism from the Biden administration and pressured
Congressional Republicans to move forward with funding legislation
to avoid a partial government shutdown.
Mizuho Financial Group (NYSE:MFG) –
Mizuho Financial Group raised its annual profit
forecast following solid first-half results, driven by gains in
investment banking and trading, as well as a cheaper yen.
Mizuho now forecasts a net profit of $4.2 billion
for the fiscal year, the highest in eight years. The CEO cited
overseas business and the acquisition of Greenhill as profit
drivers. On the other hand, a potential yen strengthening in the
second half poses a downside risk.
Berkshire Hathaway (NYSE:BRK.A) – Billionaire
investor Warren Buffett reportedly traded stocks in his personal
account at the same time his company Berkshire
Hathaway bought and sold the same stocks, according to a
ProPublica report. Based on leaked IRS data, the report alleges
that Buffett and Berkshire traded stocks,
including Walmart (NYSE:WMT), Wells
Fargo (NYSE:WFC), and Johnson &
Johnson (NYSE:JNJ) in 2009 and 2012. Buffett denied any
conflict of interest, stating he tries to avoid such situations.
Representatives from Berkshire Hathaway did not
immediately comment on the report.
BNY Mellon (NYSE:BK) – The Industrial and
Commercial Bank of China’s access to a U.S. Treasury securities
electronic settlement platform remains suspended following a
ransomware attack. BNY Mellon, the settlement
agent, disconnected the Chinese bank and awaits a third-party
assessment for reconnection. The ICBC confirmed the attack and is
investigating, while making progress in recovering its systems.
Citigroup (NYSE:C) – Citigroup
resumed the sale process of Bank Handlowy’s retail business in
Poland, said the CEO of Bank Handlowy, Elzbieta Czetwertynska, on
Friday, adding that talks with interested investors may begin in
the coming months.
Morgan Stanley (NYSE:MS) – Morgan
Stanley predicts the S&P 500 (SPI:SP500) will end 2024
at 4,500 points, representing a 2% increase from current levels,
with a recovery in profits and prospects for revenue growth and
margins. They foresee short-term challenges followed by a solid
recovery in 2025.
Goldman Sachs (NYSE:GS) – Investors are overly
concerned with the weakened outlook for U.S. corporate earnings,
which so far only follow a historical pattern, according to
strategists at Goldman Sachs. Estimates for
fourth-quarter earnings have fallen 4% since early October and are
setting a low bar for S&P 500 companies. Expectations for 2024
are also following a typical pattern, falling only 0.4% excluding
the health sector.
StoneCo (NASDAQ:STNE) –
StoneCo‘s shares rose 6.9% in Monday’s pre-market
due to growth in profits and revenues in the third quarter. The
Brazilian financial services company reported a profit of R$ 411.3
million, up from R$ 197.1 million the previous year. Revenue
increased 25%, reaching R$ 3.14 billion, driven by higher revenues
from the financial services platform.
Southwest Airlines (NYSE:LUV),
Boeing (NYSE:BA) – Southwest
Airlines expects FAA certification of the
Boeing 737 MAX 7 by April 2024, allowing flights
in October or November. Southwest is the largest customer of this
model. However, they converted some MAX 7 orders to the larger MAX
8 variant due to certification delays. Boeing expects MAX 7
certification by the end of this year.
Boeing (NYSE:BA) – Boeing is
up on Monday due to reports that the freeze on sales in China may
soon be lifted, with the Chinese government considering purchasing
Boeing 737 jets during the meeting between Biden and Xi Jinping.
Additionally, Germany’s SunExpress will buy up to 90 737 MAX jets,
and Emirates will order 90 777X jets. Boeing’s shares rose 3.75% in
pre-market, reaching $204.00. In other news, internal Boeing data
were leaked online on Friday by the Lockbit cybercrime group.
Boeing confirmed the incident and is investigating. Lockbit is
known for ransomware attacks on various organizations in the U.S.
and worldwide.
General Motors (NYSE:GM) – Members of the
United Auto Workers (UAW) union at the GM plant in Flint, Michigan,
voted against a proposed contract with the automaker, indicating
that the approval of the deal, which would significantly increase
GM’s costs, is not guaranteed. Other GM plants will vote on the
agreement in the coming weeks. The UAW’s agreement with GM grants a
25% increase in base salary by April 2028 and will raise the
maximum wage by 33%, reaching over $42 per hour.
Ford Motor (NYSE:F) – United Auto Workers (UAW)
production workers at Ford plants in Louisville and Kentucky
rejected a 4.5-year contract, while skilled workers supported it.
UAW Local 862 did not disclose the overall percentage of votes in
favor or the total number of votes.
Honda Motor (NYSE:HMC) – Honda announced an 11%
wage increase for production workers at its U.S. facilities,
following agreements between the UAW union and automakers. Honda
will also reduce the time to reach the maximum wage, in line with
concessions obtained by the UAW from other automakers.
Novo Nordisk (NYSE:NVO) – Novo Nordisk revealed
that the cardiac benefits of its obesity treatment, Wegovy, are not
limited to weight loss. The study suggests that other factors, such
as control of inflammation and glucose, contribute to
cardiovascular protection. The drug’s label may be updated to
include these benefits.
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