U.S. index futures are mixed in Thursday’s pre-market trading,
following a three-day losing streak for the S&P 500 and the Dow
Jones.
At 05:17 AM, Dow Jones futures (DOWI:DJI) fell 80 points, or
0.22%. S&P 500 futures dropped 0.04%, while Nasdaq-100 futures
rose 0.18%. The yield on 10-year Treasury bonds was at 4.146%.
In the commodities market, West Texas Intermediate crude for
January rose 1.30% to $70.28 per barrel. Brent crude for February
increased 1.31%, near $75.27 per barrel. Iron ore with a 62%
concentration, traded on the Dalian exchange, rose 3.93% to $134.12
per ton.
On Thursday’s economic agenda, investors are following the 08:30
AM release of unemployment claims for the week ending December 2.
At 10:00 AM, the Department of Commerce will release wholesale
inventories for October. At 3:00 PM, consumer credit data for
October will be announced.
European markets are performing negatively, reversing the
previous day’s gains. This is happening as investors assess recent
economic data. They are analyzing the Eurozone’s third-quarter
Gross Domestic Product (GDP) figures, along with employment data
for the same period in the euro area. Additionally, Germany’s
October industrial production data is also set to be released
soon.
Asian stock markets mostly closed lower. Tokyo was a notable
drop, nearly 2%, while Shanghai showed a slight decrease of 0.09%,
suggesting some stability. Modest Chinese trade balance data
influenced the market, with automaker stocks contributing to the
decline. The Shenzhen Stock Exchange also recorded a small drop.
Other significant indices in the region, like Hong Kong’s Hang
Seng, South Korea’s Kospi, and Australia’s ASX 200, also closed
lower, though the declines were less pronounced.
On Wednesday, the major stock market indices in the United
States experienced a slight decline. The Dow Jones fell by 0.19%.
The S&P 500 decreased by 0.39%, and the Nasdaq saw a decline of
0.58%. In the Treasuries sector, there was an uptick in value after
the ADP employment report indicated job growth below expectations,
with 103 thousand new jobs in November compared to the forecasted
130 thousand, and a revision of the previous number from 113
thousand to 106 thousand. Additionally, labor productivity data
exceeded expectations, while labor costs fell more than
anticipated.
In terms of corporate earnings on Thursday, investors will be
paying attention to reports from Dollar General
(NYSE:DG), Ciena (NYSE:CIEN),
Broadcom (NASDAQ:AVGO), Lululemon
(NASDAQ:LULU), DocuSign (NASDAQ:DOCU),
RH (NYSE:RH), and others.
Corporate Highlights from Wall Street Today
Alphabet (NASDAQ:GOOGL), Apple
(NASDAQ:AAPL) – U.S. Senator Ron Wyden raises concerns about
unidentified governments monitoring smartphones through Google and
Apple push notifications, calls for transparency and policy review.
The companies agree to cooperate.
Apple (NASDAQ:AAPL) – Steve Hotelling, Apple’s
senior executive responsible for touch screen technology, health
sensors, and facial recognition, is retiring. His responsibilities
will be divided among several subordinates. His departure comes at
a crucial time for Apple’s hardware technology group, which is
seeking to replace vital components with in-house technology and
faces challenges in future projects.
Alphabet (NASDAQ:GOOGL) – Alphabet has
introduced the advanced artificial intelligence model Gemini, which
processes multimedia information such as video, audio, and text
with greater nuance. Gemini will be integrated into the AI
assistant Bard and launched next year. The company has also
announced more powerful custom AI chips, Cloud TPU v5p, for fast
language model training.
Microsoft (NASDAQ:MSFT) – U.S. antitrust
authorities are challenging the decision that deemed Microsoft’s
$69 billion acquisition of “Call of Duty” maker Activision Blizzard
legal. They allege that Microsoft has an incentive to restrict
gaming on competitors. The FTC faces challenges after losing the
case in the first instance and receiving approval from the EU and
the UK.
Meta Platforms (NASDAQ:META) – Meta Platforms
plans to add an invisible watermark to its text-to-image generation
product in its Meta AI chatbot. This aims to increase transparency
and prevent image manipulation. The company is exploring various
ways to use generative AI in its platforms, including Instagram and
WhatsApp. Additionally, Meta is implementing end-to-end encryption
as the standard in its Messenger and Facebook apps for messages and
calls, promoting greater security and privacy. The change is likely
to extend to Instagram next year, but it raises concerns about
privacy protection from law enforcement agencies.
C3.ai (NYSE:AI) – C3.ai, a manufacturer of
artificial intelligence software, reported revenue of $73.2 million
in the last quarter, below expectations. The company recorded a net
loss of $69.8 million and plans a consumption-based pricing model.
Its shares fell 10.3% in pre-market trading on Thursday.
Walmart (NYSE:WMT) – Walmart executives have
expressed concerns that consumer behavior in the coming year may be
more difficult to predict due to financial difficulties leading
customers to be more cautious with their spending. Although they
have observed recent anomalous behavior, they do not plan to make
drastic changes to their long-term strategy.
AMD (NASDAQ:AMD) – AMD estimates that the
market for its AI processors for data centers in 2023 is $45
billion, surpassing its previous estimate of $30 billion. The
company has launched new AI chips and foresees significant growth
in the AI data center market by 2027.
Tesla (NASDAQ:TSLA) – The Danish pension fund,
PensionDanmark, sold its shares in Tesla due to the company’s
refusal to negotiate with unions, part of a Nordic movement to
pressure Tesla to accept collective labor agreements. Additionally,
the largest Norwegian private sector union announced plans to block
shipments of Tesla cars to Sweden in support of striking Swedish
mechanics seeking collective agreements. Other Nordic unions have
also joined in, challenging Tesla’s policy of not negotiating
collectively. The actions will begin on December 20th.
Ford Motor (NYSE:F) – Ford has stated that it
is unlikely that currently available Mustang Mach-E electric
vehicles at dealerships will qualify for federal tax credits
starting in January, due to new battery supply chain restrictions
imposed by the U.S. Treasury. The Mach-E model currently qualifies
for a federal tax credit of $3,750.
Nikola (NASDAQ:NKLA) – Nikola shares plunged
15.4% in pre-market trading on Thursday as the company announced
plans to raise $100 million in stock and $200 million in
convertible notes due in 2026 in two separate public offerings. The
company intends to use the funds for general corporate purposes and
investments in projects.
Nio (NYSE:NIO) – Chinese electric vehicle
manufacturer Nio Inc. is considering additional job cuts, possibly
expanding the previously announced 10%. The cuts target
non-essential and slow-return areas. The decision comes amid
growing competition and weakened demand for electric vehicles in
China.
ChargePoint (NYSE:CHPT) – ChargePoint, the
largest electric vehicle charging network in the U.S., experienced
a sharp drop in revenue in the third quarter due to a strike at
automakers and delays in electric vehicle deliveries, leading to a
management team change. Revenue declined 12% to $110.3 million,
with new CEO Rick Wilmer attributing the challenges to the strike
and company execution.
Duke Energy (NYSE:DUK) – Chinese battery giant
CATL has rejected claims by Duke Energy in the U.S. that its
batteries pose a security threat. CATL stated that its products in
the U.S. do not collect, sell, or share data and have undergone
rigorous security assessments. Duke Energy disconnected the
batteries due to safety concerns.
Chevron (NYSE:CVX) – Chevron plans to spend
between $18.5 billion and $19.5 billion on new oil and gas projects
next year, reflecting the ongoing recovery of the sector. Its
budget for 2024, along with Exxon Mobil‘s
(NYSE:XOM), reflects the pandemic’s impact, recent acquisitions,
and carbon reduction initiatives. Chevron also plans to increase
share buybacks following the deal with Hess
(NYSE:HES).
Citigroup (NYSE:C) – Citigroup’s largest
restructuring in decades will cost approximately $1 billion in
charges, involving layoffs and management reduction. The overhaul
aims to simplify the structure, reduce expenses, and achieve profit
goals. The bank maintains its 2023 expense estimate at $54 billion.
CEO Jane Fraser seeks to transform the bank, driven by commercial
revenue and investment fees.
Barclays (NYSE:BCS) – Barclays Plc is
supporting a UK charity associated with Russian billionaire
Vladimir Potanin after JPMorgan Chase & Co. (NYSE:JPM) severed
ties with the fund last year. Barclays received authorization from
the UK sanctions watchdog to provide banking services to the
Potanin Foundation. This decision reflects banks’ caution regarding
sanctions compliance. Potanin, sanctioned by the UK and the U.S.,
has amassed a fortune of approximately $30 billion as the founder
of MMC Norilsk Nickel PJSC.
Moody’s (NYSE:MCO) – Moody’s has downgraded the
outlook for Hong Kong, Macau, and several Chinese state-owned
enterprises and banks, citing close ties and erosion of Hong Kong’s
autonomy due to the National Security Law. The weakening Chinese
economy is also a factor.
Robinhood (NASDAQ:HOOD) – Robinhood has
launched commission-free cryptocurrency trading in the European
Union, allowing investors to buy and sell over 25 cryptocurrencies,
including Bitcoin, Ether, and Solana. Customers will receive a
percentage of their trading volume in Bitcoin as a reward. This
follows Robinhood’s announcement of international expansion into
the UK.
Blackstone’s Mortgage Trust (NYSE:BXMT) –
Blackstone’s Mortgage Trust shares fell 1.4% in pre-market trading
on Thursday, extending a sharp decline on Wednesday, after hedge
fund Muddy Waters took a short position, alleging oversupply
issues, underfunded loans, and expired leases. Blackstone countered
the report, stating that its liquidity was strong and they were
well-positioned.
AbbVie (NYSE:ABBV) – AbbVie is nearing an
agreement of approximately $8.7 billion to acquire Cerevel
Therapeutics (NASDAQ:CERE), focused on neurological disease
medications such as Parkinson’s. AbbVie is looking to invest in
promising drugs following previous deals. The agreement may be
announced soon. Trading of Cerevel Therapeutics Holdings Inc
options experienced a notable increase alongside the rise in shares
in the days leading up to its acquisition announcement by AbbVie.
This suspicious surge in options activity raised concerns about
insider trading.
Bristol Myers Squibb (NYSE:BMY) – Bristol Myers
Squibb announced a quarterly dividend of 60 cents per share, a 5.3%
increase from the previous year, marking the 15th consecutive year
of dividend increases. Payment will be made on February 1st to
shareholders of record on January 5th.
McDonald’s (NYSE:MCD) – McDonald’s plans to
open approximately 10,000 restaurants worldwide by 2027, increase
loyalty program sales to $45 billion, and attract 250 million users
by 2027. Global expansion would raise the total number of stores to
approximately 50,000 by 2027.
Yum Brands (NYSE:YUM) – KFC, a Yum Brands
subsidiary, announced the acquisition of 218 restaurants from its
major franchisee, EG Group, in the UK and Ireland. The deal will be
completed in the first half of 2024, with financial details
undisclosed.
Comcast (NASDAQ:CMCSA) – Comcast is raising
Xfinity program fees to offset rising programming costs.
Subscribers can expect an average price increase of 3%, with a $3
per month increase in internet-only service. This follows an
unexpected decline in broadband subscribers in the third
quarter.
GameStop (NYSE:GME) – GameStop fell short of
quarterly revenue estimates due to increasing competition and
reduced consumer spending amid an uncertain economy. GameStop
reported revenue of $1.08 billion in the third quarter, below
estimates of $1.18 billion. This comes as the gaming industry faces
challenges from persistent inflation and high borrowing costs.
Chewy (NYSE:CHWY) – Chewy shares dropped 10% in
pre-market trading on Thursday after providing a disappointing
outlook for the next quarter and lowering its full-year
expectations. Third-quarter revenue was $2.74 billion, but the
company projected lower sales in the next quarter, reflecting
ongoing macroeconomic pressures in the sector. Chewy has named
David Reeder as its new CFO.
SpaceX – SpaceX has initiated discussions to
sell preferred shares, targeting a valuation of over $175 billion.
The public offering could range between $500 million and $750
million, with shares priced at approximately $95 each. The current
valuation is a premium compared to the $150 billion raised in a
previous offering. SpaceX is a leader in the commercial space
launch market and operates the Starlink internet service. Its
projected revenues for 2024 are around $15 billion.
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