US index futures are down in Friday’s pre-market, with investors
gearing up to assess the earnings of major banks.
At 7:01 AM, Dow Jones futures (DOWI:DJI) fell 11 points, or
0.03%. S&P 500 futures dropped 0.20%, and Nasdaq-100 futures
declined 0.44%. The yield on 10-year Treasury bonds stood at
4.602%.
In the commodities market, November West Texas Intermediate
crude oil rose 3.88% to $86.11 per barrel. December Brent crude oil
also increased by 3.56%, nearing $89.05 per barrel.
On the economic agenda for Friday, investors await import and
export price data at 8:30 AM, while Philadelphia Fed President
Patrick Harker is scheduled to speak at 09 AM. At 10 AM, the
University of Michigan Consumer Sentiment Survey is due, with a
forecast of 67.2 points in October, down from the previous
month.
In Asia, markets closed lower, keeping an eye on U.S. and
Chinese inflation, as well as data from China’s trade balance,
which showed a surplus above expectations. The possibility of
additional stimulus from Beijing is still seen as essential.
In the European market, which is currently trading lower,
industrial production in the Eurozone increased by 0.60% in August
on a monthly basis, surpassing expectations. On an annual basis,
there was a 5.10% decline, exceeding projections.
At 8 AM, a speech by the President of the European Central Bank
(ECB), Christine Lagarde, is scheduled, where she is expected to
discuss monetary policy at an International Monetary Fund (IMF)
event.
At Thursday’s close, US stocks fell interrupting the recent
upward trend. The Dow Jones fell 173.73 points or 0.51% to
33,631.14 points. The S&P 500 fell 27.34 points or 0.62%
to 4,349.61. The Nasdaq fell 85.46 points or 0.63% to
13,574.22. Rising Treasury yields and better-than-expected
consumer price data impacted the market. Real estate and
airline sectors also saw notable declines.
On the corporate earnings front Wednesday, investors will be
watching reports from JPMorgan Chase (NYSE:JPM), UnitedHeath
(NYSE:UNH), BlackRock (NYSE:BLK), Citigroup (NYSE:C), Wells Fargo
(NYSE:WFC), Progressive (NYSE:PGR) and PNC Financial
(NYSE:PNC).
Wall Street Corporate Highlights for Today
Microsoft (NASDAQ:MSFT), Activision
Blizzard (NASDAQ:ATVI) – The British antitrust body
approved Microsoft’s acquisition of Activision after concerns were
addressed. The deal could now be completed by October 18, with
the regulator saying Microsoft’s concession was crucial to avoiding
monopoly in the UK cloud gaming market.
Fortinet (NASDAQ:FTNT) – Barclays
downgraded Fortinet’s rating from “overweight” to “equal weight”
and revised the price target from $71 to $63. The cybersecurity
company is scheduled to report its third-quarter results on
November 2. As a result, the shares fell 2.6%, reaching $56.50 in
pre-market trading.
Amazon (NASDAQ:AMZN) – Amazon is expanding
its logistics services initiative, potentially targeting more than
$100 billion in revenue, according to Truist Securities analyst
Youssef Squali. The company aims to transform its logistics
network into a service offering for merchants beyond Amazon,
converting a cost center into a profit center. Despite the
high valuation, analyst confidence in Amazon remains high, with
most recommending buying shares and an average price target that
implies a 31% gain over the next year.
TSMC (NYSE:TSM) – TSMC hopes to
obtain U.S. permission to supply U.S. chip equipment to its factory
in China on an indefinite basis, seeking permanent authorization
through the “validated end user” (VEU) process. This follows
similar authorization given to Samsung Electronics and SK Hynix by
the South Korean government. Last year, TSMC received a
one-year authorization from the US for its factory in Nanjing,
China, which produces 28-nanometer chips.
Qualcomm (NASDAQ:QCOM) – Qualcomm plans to
cut about 2.5% of its workforce, eliminating 1,064 positions in San
Diego and 194 in Santa Clara, California, in mid-December,
according to documents filed with the Department of Development
California Employment. The company had 51,000 employees
globally.
Smart Global Holdings (NASDAQ:SGH) – Smart
Global Holdings announced that its fiscal fourth quarter sales
decreased 12.6% to $316.7 million, below analyst estimates of $375
million. The company projected sales from continuing
operations for its fiscal first quarter of around $275 million,
with a margin of error of approximately $25 million. This
resulted in a 25.4% drop in Smart Global shares in pre-market
trading.
Tesla (NASDAQ:TSLA) – Electric vehicle
sales in the US exceeded 300,000 in the 3rd quarter, but Tesla’s
market share fell to 50%, after having 62% in the 1st
quarter. Other manufacturers have reduced prices due to
inflation. Tesla’s price war dropped the average price to
$50,683 in September. Electric vehicle sales represented 7.9%
of total industry sales,
with Rivian (NASDAQ:RIVN) exceeding
delivery expectations. Tesla missed estimates due to factory
upgrades as demand grows for a wider range of electric vehicles in
the US. Additionally, Tesla plans to increase wages for
workers at its factory in Germany, following criticism from unions
over wages below the industry average. Details of the increase
will be released in November, following a 6% increase last
year.
Ford Motor (NYSE:F) – A senior Ford
executive has warned of strikes at its most profitable plants due
to wage pressure from the United Auto Workers (UAW). Ford
seeks to reallocate resources within its bid to secure a deal,
while the UAW directs negotiations
to Stellantis (NYSE:STLA). The
United Auto Workers closed Ford’s largest factory in the world, the
Kentucky Truck Plant, following Ford’s refusal to move forward in
contract negotiations. The decision could affect Ford’s annual
profits, as the plant generates about a sixth of its global
revenue.
General Motors (NYSE:GM) – GM
and LG Energy Solution (KOSPI:373220)
face $270,000 fines due to health and safety violations at the
Ultium Cells battery plant in Ohio following an explosion in
March. OSHA issued 19 violations, including lack of safety
training and exposure to metal dust. Ultium Cells seeks a
hearing with OSHA.
Toyota Motor (NYSE:TM) – Toyota and oil
refiner Idemitsu Kosan announced an agreement to develop
all-solid-state batteries and plan to commercialize them in 2027-28
as part of its electric vehicle strategy. Companies are
seeking solutions to durability problems and planning mass
production. Solid-state technology promises greater autonomy
and faster charging times.
Honda Motor (NYSE:HMC) – Honda and
Mitsubishi have agreed to explore business opportunities related to
electric vehicle batteries. The partnership aims to utilize EV
batteries for energy storage and promote smart charging and
vehicle-to-grid (V2G) technologies.
Chevron (NYSE:CVX) – Negotiations between
Chevron and unions at LNG facilities in Australia have progressed
but have not resulted in an agreement. A union leader
mentioned “some” points of contention, without details, and new
negotiations are scheduled. Chevron expressed commitment to
reaching an agreement. Negotiations are mediated by the Fair
Work Commission. After suspending strikes in September, unions
threatened to resume strikes in October. The benchmark Dutch
gas contract rose on uncertainty.
Pioneer Natural
Resources (NYSE:PXD), Exxon
Mobil (NYSE:XOM) – Pioneer Natural Resources
leadership will face unemployment after sale to Exxon
Mobil. The top five executives will receive a total of $71
million in compensation, with CEO Scott Sheffield receiving about
$29 million, representing three times his base salary, plus
outstanding awards. These packages, known as “golden
parachutes,” are common but often generate controversy due to their
size compared to regular employee benefits.
Boeing (NYSE:BA), Spirit
AeroSystems (NYSE:SPR) – Boeing and Spirit
AeroSystems have expanded inspections for a production defect on
737 Max 8 aircraft. The issue involves holes in the rear pressure
bulkhead and now encompasses hand-drilled holes. Boeing did
not provide additional details about the scope or its impact on
delivery goals. The FAA said there are no immediate safety
concerns.
Delta Air Lines (NYSE:DAL) – Delta Air
Lines reinforced its confidence in continued demand for travel
despite concerns about slowing domestic demand. The company
noted strong global bookings and an increase in business travel,
maintaining an optimistic view of the situation.
Citigroup (NYSE:C) – Citigroup announced
that its board of directors will meet in Singapore for the first
time since 2011 as a sign of commitment to the city-state. The
meeting comes at a time when Singapore is attracting wealth flows
from China and other countries due to its political stability and
fund-friendly policies.
Wells Fargo (NYSE:WFC) – Wells Fargo will
roll out its financial planning tool, Life Sync, to all of its
nearly 70 million customers, after initially offering it to wealth
customers. The tool lets you set financial goals, check credit
scores and connect with financial advisors, as well as invest and
move money between accounts through the mobile app. This is
part of the bank’s efforts to enhance its digital offerings and cut
costs.
JPMorgan Chase (NYSE:JPM) – JPMorgan Chase
CEO Jamie Dimon warned that the conflict in the Middle East will
have ripple effects beyond the region, predicting a rise in
anti-Semitism and global Islamophobia. The bank is taking
steps to ensure the safety of its employees and will contribute $1
million to relief
efforts. American Express (NYSE:AXP)
also pledged significant donations. In terms of quarterly results,
JPMorgan Chase exceeded analysts’ expectations in the third
quarter, reporting an earnings per share of $4.33 and revenue of
$40.69 billion. The bank attributed its success to interest income
exceeding estimates and credit costs lower than expected. However,
CEO Jamie Dimon cautioned that these exceptional results may not be
sustainable, as credit costs and interest rates are expected to
normalize in the future.
Goldman Sachs (NYSE:GS) – Goldman Sachs
has sued the Malaysian government at the London Court of
International Arbitration over alleged breaches of the settlement
and asset recovery agreement related to the 1MDB scandal. This
follows disagreements over compliance with the 2020 agreement,
which involved a $3.9 billion payment. Goldman Sachs is
forecast to report weak quarterly earnings, with an average
estimate of $5.31 per share, representing a 36% drop from the
previous year. The results reflect pressure on investment
banking and writedowns on commercial real estate assets. The
company also sold GreenSky as part of its strategy to exit the
consumer business.
Bank of America (NYSE:BAC) – Michael
Hartnett, Bank of America strategist, believes the US stock market
can avoid a bleak scenario as long as bond yields remain below 5%.
He predicts the S&P 500 could stay above 4,200 points in the
short term, but a break below that level could be triggered by a
stronger dollar, higher yields, oil above $100 per barrel, and a
small business credit crisis. Hartnett remains pessimistic for 2023
despite the recent S&P 500 uptick. He believes a recession and
rate cuts by the Federal Reserve could generate gains in bonds and
gold, along with a broader stock market recovery in 2024. To turn
optimistic, he expects to see an economic contraction and rate cuts
to attract new investors.
UBS (NYSE:UBS) – UBS Group AG has
expressed concerns about the rapid growth of unsecured personal
loans in India, warning that the increased risk of default could
lead to higher credit costs for Indian lenders. State banks
are considered more vulnerable to this trend than those in the
private sector. The country’s banking regulator, the Reserve
Bank of India, has also highlighted the need to assess risk-taking
strategies in personal loans. UBS warned of the risk of
regulatory tightening as the RBI is alert to possible crises.
Deutsche Bank (NYSE:DB) – Deutsche Bank
CEO Christian Sewing predicts challenges in the commercial real
estate sector due to rising interest rates. While the bank’s
exposure is limited, high borrowing costs and post-pandemic remote
working will weigh on the asset class. Sewing emphasizes the
importance of underwriting principles to mitigate risk.
KKR and Company (NYSE:KKR) – US fund KKR
is planning to submit a multibillion-euro bid
for Telecom Italia’s (BIT:TITR) fixed
network as part of an Italian government-backed plan to reshape the
debt-burdened telecoms group. The offer will include Netco,
with plans to absorb half of TIM’s domestic employees. The
Italian Treasury plans to acquire a 15-20% stake in NetCo’s
business as part of the deal.
LendingClub (NYSE:LC) – LendingClub plans
to reduce its staff by around 14%, equivalent to 172
employees. This decision is a response to persistent
macroeconomic challenges and market pressure, especially due to
higher interest rates.
Walgreens Boots Alliance (NASDAQ:WBA) –
Walgreens Boots Alliance plans to reduce at least $1 billion in
costs by 2024, including closing unprofitable stores, as it seeks
to improve efficiency. The company is also cutting capital
expenditures by about $600 million and looking to optimize its
supply chain with artificial intelligence. These measures were
announced after the company forecast financial results below Wall
Street expectations due to falling sales of Covid-19 products and
other pressures.
Illumina (NASDAQ:ILMN) – US genetic
testing company Illumina has been ordered by the EU to sell cancer
testing maker Grail after completing the deal without
approval. The EU imposed a $457 million antitrust fine and
blocked the deal due to monopoly concerns. Illumina must
ensure Grail’s independence and competitiveness prior to the
sale.
Cassava Sciences (NASDAQ:SAVA) – Cassava
Sciences experienced a 27.9% drop in pre-market trading after a
Science report alleged scientific misconduct by neuroscientist
Hoau-Yan Wang, a longtime Cassava collaborator and member of
faculty of the City University of New York. The investigation
questioned the validity of 20 research articles, many of which
supported the experimental Alzheimer’s drug simufilam. Cassava
reaffirmed its confidence in the science behind simufilam and will
proceed with its Phase 3 clinical program.
Kroger (NYSE:KR), Albertsons (NYSE:ACI)
– California Attorney General Rob Bonta has expressed concerns
about Kroger’s proposed deal to acquire Albertsons for $24.5
billion and is mulling action to block it, citing concerns about
higher prices, lower payments to farmers and food
deserts. Kroger argues that the merger would result in lower
prices, secure jobs and more food for families in need. The
FTC is reviewing the deal to ensure compliance with antitrust
laws.
Domino’s Pizza (NYSE:DPZ) – Domino’s Pizza
is counting on revitalizing demand in the U.S., leveraging its
improved loyalty program and promotional offers to offset the
reduced benefits of higher prices. The company is focused on
providing value to customers in addition to competitive prices.
Dollar General (NYSE:DG) – Shares of
Dollar General Corp. rose 7.2% in Friday pre-market trading on
the announcement that Todd Vasos would return as CEO
immediately. Vasos, who was CEO from 2015 to 2022, succeeds
Jeff Owen, and the change aims to restore stability and confidence
in the company. Dollar General kept its sales forecast in line
with analyst expectations, but lowered its sales growth forecast to
1.5% to 2.5% and expected earnings of between $7.10 and $7.60 per
action.
JD.com (NASDAQ:JD) – JD.com is down -4.5%
in Friday pre-market trading and hit a record low in Hong Kong,
with several brokerages including Morgan Stanley and Citigroup
downgrading your ratings and target prices. Rumors about the
arrest of a businessman surnamed Liu, unrelated to the company’s
president, also affected the shares. The retailer faces
challenges due to slow consumption in China and competition from
low pricing strategies, making its position in the Chinese
e-commerce market less favorable.
AMC Entertainment (NYSE:AMC) – AMC’s
shares rose by 5.6% on Thursday, extending their five-session
rally, as Taylor Swift’s concert film generated significant
anticipation and broke records ahead of its scheduled release on
Friday. The film is expected to have a global opening of up to $200
million, a record for a concert film. In other news, AMC CEO Adam
Aron faced extortion in a criminal scheme related to false claims
about his personal life, which he reported to the authorities,
resulting in the capture and conviction of the extortionist. He had
maintained confidentiality until recently.
Viasat (NASDAQ:VSAT) – Viasat expects to
recover less than 10% of the planned capacity of ViaSat-3 F1, its
failed satellite, but believes it can meet customer needs without
replacing it. The company also forecasts sustainable positive
cash flow in the first half of 2025.
Newcrest
Mining (TSX:NCM), Newmont
Corporation (NYSE:NEM) – Newcrest Mining shareholders
voted overwhelmingly in favor of the $16.81 billion acquisition of
Newmont Corporation. Around 92.63% of votes were in favor,
exceeding the 75% support requirement. The final hearing is
scheduled for Tuesday.
Paramount (NASDAQ:PARA), Warner
Bros. Discovery (NASDAQ:WBD), Walt
Disney (NYSE:DIS), Netflix (NASDAQ:NFLX)
and Comcast (NASDAQ:CMCSA) –
Entertainment industry stocks fell after negotiations between the
film and television actors union collapsed and the
studios. The Alliance of Motion Picture and Television
Producers (AMPTP) suspended negotiations with SAG-AFTRA following
the union’s proposal. AMPTP alleges that SAG-AFTRA’s offer
includes an unsustainable ratings bonus, while the union accuses
AMPTP of intimidation tactics. Wall Street realized that the
Hollywood actors’ strike could last longer, impacting the shares of
entertainment companies such as Paramount, Warner
Bros. Discovery, Walt Disney, Netflix and Comcast.
SMART Global (NASDAQ:SGH)
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