US index futures are declining in pre-market trading this
Thursday, primarily due to investors’ negative reaction to
companies reporting results below expectations. Meta (NASDAQ:META)
saw a 2.8% drop in pre-market trading, citing an uncertain economic
environment as the reason, while Alphabet (NASDAQ:GOOGL) lost 1.7%
due to disappointing cloud-related numbers. Amazon (NASDAQ:AMZN),
which will release results later, fell by 1.5%.
At 06:40 AM, Dow Jones futures (DOWI:DJI) dropped 107 points, or
0.32%. S&P 500 futures fell 0.61%, and Nasdaq-100 futures fell
0.90%. The yield on 10-year Treasury bonds stood at 4.953%.
In the commodities market, West Texas Intermediate crude oil for
December fell 1.23% to $84.34 per barrel. Brent crude oil for
December dropped 1.10% to around $89.14 per barrel. Iron ore with a
62% concentration traded on the Dalian exchange rose 0.69% to
$119.73, marking its third consecutive session of gains after three
declining sessions.
The downward trend has extended to other markets, including
stocks in Europe and Asia, which also recorded significant losses.
The dollar strengthened, and the price of gold rose by 0.5%. The
Japanese yen weakened against the dollar, raising speculation about
possible government intervention in the foreign exchange
market.
In Europe, the European Central Bank is expected to make a
policy decision to keep interest rates unchanged for the first time
in over a year.
US stock markets experienced a sharp decline in Wednesday’s
session, with corporate earnings weighing on stock indices’
performance. The Dow Jones fell 105.45 points or 0.32% to 33,035.93
points. The S&P 500 dropped 60.91 points or 1.43% to 4,186.77
points, its lowest closing level in almost five months. The Nasdaq
fell 318.65 points or 2.43% to 12,821.22 points, marking its worst
day since February.
Alphabet (NASDAQ:GOOGL) reported below-expected results, while
Meta’s (NASDAQ:META) results were expected after the market close.
U.S. home sales exceeded expectations, while a Treasury auction had
lower demand, influencing interest rates. Globally, tension in Gaza
escalated with Israel preparing for a ground attack, raising oil
prices. In Canada, the interest rate remained at 5%.
Regarding corporate earnings on Thursday, investors will be
watching for reports from United Parcel Service (NYSE:UPS), Royal
Caribbean Group (NYSE:RCL), Hershey (NYSE:HSY), Altria (NYSE:MO),
Southwest Airlines (NYSE:LUV), Valero (NYSE:VLO), Northrop Grumman
(NYSE:NOC), Newmont (NYSE:NEM), Merck (NYSE:MRK), before the market
opens. After the close, results from Amazon (NASDAQ:AMZN), Intel
(NASDAQ:INTC), Enphase Energy (NASDAQ:ENPH), Ford Motor (NYSE:F),
Chipotle Mexican Grill (NYSE:CMG), United States Steel (NYSE:X),
Vale (NYSE:VALE), Capital One (NYSE:COF), and others will be
anticipated.
Wall Street Corporate Highlights for Today
Apple (NASDAQ:AAPL) – Apple plans a complete overhaul of its
AirPods lineup, with an updated version of the standard AirPods in
2024 and a new Pro model in 2025. The changes will include improved
design, cases, and audio quality. Additionally, a new version of
AirPods Max is expected in 2024. The company also plans to
discontinue the second and third-generation AirPods in favor of two
fourth-generation models with similar prices but different
features, including noise cancellation in the top-end version.
Meta Platforms (NASDAQ:META) – Mark Zuckerberg, CEO of Meta
Platforms, has highlighted 2023 as a “year of efficiency,” earning
praise from the market. The cost-cutting effort appears to be
nearing completion, and analysts are confident despite the planned
increase in payroll in 2024 to invest in artificial intelligence.
Spending on AI is now more accepted by investors, boosting Meta. In
other news, Malaysia’s communications regulator will warn TikTok
and Meta for allegedly blocking pro-Palestinian content on their
platforms. The Communications Minister threatens to take a firm
stance if the issue persists, emphasizing the right to freedom of
expression regarding the Palestinian cause.
Alphabet (NASDAQ:GOOGL), Meta Platforms (NASDAQ:META), Snap
(NYSE:SNAP) – Google, Meta, and Snap exceeded quarterly revenue
expectations, indicating that artificial intelligence is attracting
marketers to digital platforms. Google reported a 9.5% increase in
advertising revenue, while Meta plans to invest in AI next year.
Snap saw its average revenue per user increase in the third
quarter. The advertising market is rebounding, led by retail
company spending, with Google and Meta standing out as potential
beneficiaries. However, Meta noted softness in advertising spending
related to the Israel-Gaza conflict.
Arista Networks (NYSE:ANET), Nvidia (NASDAQ:NVDA) – Shares of
Arista Networks and Nvidia fell after Meta Platforms provided a
lower-than-expected capital spending outlook for 2024. Meta plans
to invest in servers, AI, and data centers, affecting related
stocks.
ON Semiconductor (NASDAQ:ON) – ON Semiconductor’s shares fell
about 25% from their record high. With earnings expected on Monday,
the company has a history of surpassing estimates. Its focus on
automotive and consumer chips protects it from trade restrictions
with China. Analysts predict solid growth through 2026, which could
boost the stock price, currently with an attractive valuation
multiple.
Ford Motor (NYSE:F) – The UAW union and Ford reached a tentative
agreement after a strike involving 45,000 workers. The agreement
includes a 25% pay increase over four and a half years, strike
rights, reversing past concessions, and pressuring other
automakers. President Biden praised the agreement.
Stellantis (NYSE:STLA) – Stellantis announced the acquisition of
a 21% stake in electric vehicle manufacturer Leapmotor in a $1.6
billion deal. This gives Stellantis access to Leapmotor’s advanced
technology but faces increasing competition from Chinese electric
vehicle manufacturers in Europe. Stellantis seeks to revitalize its
presence in China, where it faces sales challenges. The deal also
aims to help Stellantis expand its electric vehicle lineup to meet
2030 goals.
Southwest Airlines (NYSE:LUV) – Southwest Airlines reached a
tentative agreement with the Transport Workers Union Local 556,
which represents flight attendants. The union will communicate
details and a voting schedule to members. Flight attendants were
seeking pay increases and better working conditions.
Shell (NYSE:SHEL) – Shell plans to cut 15% of its workforce in
its low-carbon solutions division and scale back its hydrogen
business to boost profits under CEO Wael Sawan. About 200 jobs will
be cut in 2024 as the company seeks to focus on more profitable
low-carbon areas.
Berkshire Hathaway (NYSE:BRK.B), Occidental Petroleum (NYSE:OXY)
– Berkshire Hathaway increased its stake in Occidental Petroleum,
acquiring 3.9 million shares, raising its stake to 228 million
shares worth $14.5 billion. Berkshire holds $8.5 billion in
preferred Occidental shares. The company now owns 25.8% of
Occidental Petroleum and paid about $63 per share in its latest
purchase.
General Electric (NYSE:GE) – The offshore wind industry faced
challenges in 2023, with project cancellations due to rising costs.
General Electric (GE) incurred losses in its offshore wind turbine
business but plans improvements. New York State will invest $300
million in wind equipment production as part of a plan to add 6.4
GW of renewable energy capacity. While projects on the East Coast
have been delayed, new contracts offer lucrative opportunities for
companies like RWE (USOTC:RWEOY), TotalEnergies (NYSE:TTE), and
National Grid (NYSE:NGG), despite higher tariffs for consumers.
Endeavor Group Holdings (NYSE:EDR) – In Thursday’s pre-market,
the value of talent agency and sports company Endeavor increased by
21.4%. Endeavor CEO Ari Emanuel announced in a press release that
the company was exploring potential strategic options. The
statement also emphasized that Endeavor is not considering selling
its stake in TKO Group Holdings, which is the resulting company
from the merger including WWE and UFC.
Morgan Stanley (NYSE:MS) – Ted Pick has been chosen as the next
CEO of Morgan Stanley, succeeding James Gorman on January 1st.
Pick, a former co-president of the company, led crucial divisions,
including institutional securities and fixed income. He excelled in
restructuring the fixed income division and has been with the
company since 1990, serving on the management and operating
committee.
Barclays (NYSE:BCS) – Barclays is laying off dozens of employees
in its U.S. consumer banking division as part of a global
cost-cutting effort. The layoffs represent about 3% of the
division’s U.S. employees. The bank also announced a new round of
restructuring to increase efficiency. Its shares fell 2.3% in
Thursday’s pre-market in response to the bleak outlook for the
domestic market.
Nomura Holdings (NYSE:NMR) – Nomura Holdings is reevaluating its
business in China due to mounting losses in its Shanghai joint
venture. The joint venture has faced challenges since 2019 and
incurred CNY 225 million in losses in 2022. The review comes as
Nomura cuts bankers in Hong Kong, and other global financial
institutions conduct layoffs in Asia.
FedEx (NYSE:FDX) – FedEx warned that its Express deliveries in
the U.S. could experience delays due to an overnight disruption in
the FAA’s IT system. The company stated that affected shipments are
not eligible for refunds or credits.
Unilever (NYSE:UL) – New Unilever CEO Hein Schumacher revealed
plans to simplify the business by focusing on 30 key brands
representing 70% of sales. Shares fell 3.2% in Thursday’s
pre-market due to the lack of surprises in the strategy. Schumacher
took over after several years of underperformance. The company met
sales growth expectations in the third quarter but did not regain
some customers due to cheaper products. The focus now is on
improving gross margin without significant acquisitions.
Additionally, CFO Fernando Fernandez was appointed.
Hershey (NYSE:HSY) – Consumer Reports found lead and cadmium in
one-third of the chocolate products tested and urged Hershey to
reduce these metals. Sixteen of the 48 products contained harmful
levels. Hershey has expressed interest in reducing these metals in
its chocolate. Consumer Reports is once again calling for action
from the company.
Choice Hotels (NYSE:CHH), Wyndham Hotels and Resorts (NYSE:WH) –
Choice Hotels has requested that the board of Wyndham Hotels and
Resorts, a U.S. economy hotel operator, engage in merger
negotiations. Wyndham had previously rejected a $7.8 billion
acquisition offer from Choice.
Biogen (NASDAQ:BIIB), Eisai (USOTC:ESAIY) – Biogen and Eisai
released promising data on the Alzheimer’s treatment Leqembi. The
weekly subcutaneous version showed a 14% greater removal of amyloid
plaques compared to the intravenous version after six months,
potentially boosting the acceptance of the medication.
Sunnova Energy International (NYSE:NOVA) – Sunnova Energy
International’s shares surged 9.9% in Thursday’s pre-market after
the residential and commercial solar energy company announced
measures that improved its corporate liquidity, completely
eliminating the need for $500 million in planned capital for
2024.
Earnings
Meta Platforms (NASDAQ:META) – The parent company of Facebook,
Meta, saw its stock fall by -2.7% after announcing third-quarter
results that, while showing a reduction in profit and revenue
estimates, exceeded expectations. Meta reported revenue of $34.15
billion and earnings of $4.39 per share, surpassing analysts’
projections of $33.56 billion in revenue and earnings per share of
$3.63, according to LSEG.
IBM (NYSE:IBM) – The corporate services and cloud computing
company reported adjusted earnings of $2.20 per share in its
third-quarter earnings report, beating analysts’ estimates by 7
cents, according to LSEG. Additionally, the quarter’s revenue
reached $14.75 billion, slightly above analysts’ forecast of $14.73
billion.
ServiceNow (NYSE:NOW) – In Thursday’s pre-market trading, the
process automation company saw a 4.7% increase in its stock value
due to third-quarter results that exceeded expectations. ServiceNow
announced earnings of $2.92 per share, excluding extraordinary
items, surpassing analysts’ expectations of earnings per share of
$2.56, according to LSEG. Additionally, ServiceNow’s revenue
reached $2.29 billion, also exceeding analysts’ forecasts.
Whirlpool (NYSE:WHR) – The appliance company lowered its
full-year profit forecast. The company now estimates earnings per
share of $16, in contrast to its previous forecast ranging from $16
to $18 per share. Nevertheless, Whirlpool exceeded earnings and
revenue expectations in the third quarter.
Align Technology (NASDAQ:ALGN) – In Thursday’s pre-market
trading, shares of the medical devices company fell more than 25%.
This happened because Align issued a weak revenue forecast for the
fourth quarter, and CEO Joe Hogan explained in a statement that the
third-quarter results reflect lower-than-expected demand, along
with a more challenging macroeconomic environment compared to the
first half of the year. The company reported adjusted earnings per
share of $2.14 and revenue of $960 million, which fell short of
analysts’ expectations surveyed by LSEG.
Mattel (NASDAQ:MAT) – The toy manufacturer surprised analysts by
reporting earnings and profits above expectations and even raised
its full-year profit outlook. However, despite this positive
performance, its stock price fell by -10.4% in Thursday’s
pre-market trading. Mattel reported adjusted earnings of $1.08 per
share, surpassing analysts’ expectations of earnings of 86 cents
per share. Revenue reached $1.92 billion, while analysts had
expected $1.84 billion.
WPP (NYSE:WPP) – The WPP Group revised its growth outlook for
2023, now predicting 0.5-1.0% growth due to reduced spending by
technology clients and a slowdown in China. Third-quarter
performance fell below expectations, with shares dropping 3% in
Thursday’s pre-market trading. CEO Mark Read noted that technology
companies are cutting marketing expenses. Growth at GroupM slowed
to 1.6% due to client losses in the U.S. and technological
deceleration. WPP plans to merge Wunderman Thompson and VMLY&R
to create the industry’s largest creative agency.
Amazon (NASDAQ:AMZN) – Amazon seeks to increase its profit
margin in the third quarter by boosting same-day delivery services.
Investors expect a 2.67% increase in gross profit margins compared
to the previous year.
Intel (NASDAQ:INTC) – Intel will release its third-quarter
results, causing some concerns on Wall Street about its profit
margins for the coming year. Revenue of $13.6 billion and earnings
of 22 cents per share are estimated for the quarter, with analysts
predicting $14.4 billion and 33 cents per share for the next
quarter. Weak demand for data center server chips is a concern,
with forecasts below consensus for 2024.
Honeywell (NASDAQ:HON) – Industrial giant Honeywell
International is about to report its third-quarter earnings,
offering investors an opportunity to assess its progress toward
long-term goals. Wall Street expects earnings of $2.23 per share
and sales of $9.2 billion. Its shares have fallen about 6% in the
last 12 months but have exceeded estimates in previous
quarters.
Merck (NYSE:MRK) – Merck will announce its quarterly results
following a stock decline due to regulatory concerns and interest
rates. Investors expect cancer treatments to boost results.
Analysts project earnings of $1.95 per share and sales of $15.3
billion. The company also announced a collaboration with Daiichi
Sankyo worth up to $22 billion.
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