U.S. index futures are trending upwards in Wednesday’s
pre-market, with investors awaiting the release of the second
estimate of the Gross Domestic Product (GDP) and the Beige Book in
the United States to calibrate bets on monetary policy
direction.
As of 05:52 AM, Dow Jones futures (DOWI:DJI) rose by 105 points,
or 0.30%. S&P 500 futures advanced 0.33%, and Nasdaq-100
futures increased by 0.45%. The yield rate of 10-year Treasury
bonds was at 4.294%.
In the commodities market, West Texas Intermediate crude oil for
January rose by 1.33%, to $77.43 per barrel. Brent crude oil for
January increased by 1.21%, nearing $82.67 per barrel. Iron ore
with a 62% concentration, traded on the Dalian exchange, fell by
0.47%, to $134.07 per ton.
On this Wednesday’s economic agenda, investors are following the
07:00 AM weekly mortgage index, followed by the forecast of a 5%
increase in the American GDP for the third quarter at 08:30 AM. At
10:30 AM, the Department of Energy will announce last week’s oil
inventories, and at 1:45 PM, Loretta Mester from the Cleveland Fed
will speak.
The Beige Book, reporting the economic situation of the 12 Fed
districts, will be released at 2:00 PM, indicating expectations of
a price deceleration and a less tense labor market.
In Asian markets, there was a decline due to anxiety over U.S.
data and renewed concerns about the Chinese real estate sector,
where recent sales have been weak and potential new financial
support could be limited.
In Europe, consumer confidence in the eurozone in November
aligned with forecasts, while inflation expectations dropped to 9.3
points, down from 11.3 in October. The focus is now on Germany’s
November inflation, scheduled for 08:00 AM. Additionally, Luis de
Guindos, vice-president of the ECB, highlighted that several
eurozone banks have been slow to pass on interest rate hikes to
savers, due to a scenario of ample liquidity.
On Tuesday, U.S. stocks ended modestly higher, with the Dow
Jones reaching its highest closing level in three months, climbing
0.2% to 35,416.98 points. This followed optimistic comments from
Federal Reserve Governor Christopher Waller on economic policy.
However, conflicting remarks from Governor Michelle W. Bowman and
the wait for important economic reports kept trading activity
restrained. Boeing (NYSE:BA) shares rose 1.4% due
to a rating upgrade. Gold also saw a rise, boosting the NYSE Arca
Gold Bugs Index by 4.5%. Airline company shares showed strength,
while brokerage shares fell.
For Wednesday’s corporate earnings front, investors will be
watching reports from Foot Locker (NYSE:FL),
Dollar Tree (NASDAQ:DLTR),
Farfetch (NYSE:FTCH), Petco
(NASDAQ:WOOF), Bili Bili (NASDAQ:BILI),
Hormel Foods (NYSE:HRL), and others, before the
market opens. After the close, reports from
Snowflake (NYSE:SNOW), Salesforce
(NYSE:CRM), Okta (NASDAQ:OKTA),
Synopsys (NASDAQ:SNPS), Five
Below (NASDAQ:FIVE), Victoria’s Secret
(NYSE:VSCO), and more will be observed.
Wall Street Corporate Highlights Today
Apple (NASDAQ:AAPL) – Apple
plans to end its credit card partnership with Goldman
Sachs (NYSE:GS) in the next 12 to 15 months, according to
the Wall Street Journal. The proposal to terminate the contract,
which began with the launch of a virtual card in 2019, will also
include the savings account launched this year.
Meta Platforms (NASDAQ:META) –
Meta will block new political ads in the week
prior to the U.S. presidential elections in 2024, and will require
global disclosure when AI is used to create or alter images in
political ads, aiming to increase transparency and combat
misinformation.
Amazon (NASDAQ:AMZN) – Amazon
announced a new AI chip, Trainium2, for its AWS cloud computing
service, intensifying competition with Microsoft
(NASDAQ:MSFT) in the AI market. AWS CEO Adam Selipsky revealed that
Trainium2 is four times faster and twice as energy-efficient as its
predecessor, competing also with AI chips from
Google (NASDAQ:GOOGL) and Nvidia
(NASDAQ:NVDA). Amazon is also launching the
chatbot Q to attract corporate customers to its AWS service,
offering support for tasks like summarizing documents and
integrating with communication apps. Additionally,
Amazon promises to protect companies against legal
and reputational harm in AI production, with the new service
Guardrails for Bedrock, which filters harmful content. AWS will
also offer indemnities against lawsuits for misuse of
copyright-protected materials.
Nvidia (NASDAQ:NVDA), Amazon
(NASDAQ:AMZN) – Amazon.com and
Nvidia announced an expansion of their partnership
in the area of artificial intelligence. Amazon Web
Services (AWS) will host the Nvidia DGX Cloud service,
providing access to supercomputing for AI model training. They are
also collaborating on developing the “world’s fastest GPU-powered
AI supercomputer”. AWS introduced the Trainium2 AI chip and the
Graviton4 processor, as well as launching the Amazon Q.
Okta (NASDAQ:OKTA) – Okta, an
identity services company, revealed that hackers stole user
information from its customer support system two months ago. The
data includes customers’ names and emails. The breach, which
increases the risk of phishing, caused the company’s shares to fall
4.7% in Wednesday’s pre-market trading.
CrowdStrike (NASDAQ:CRWD) –
CrowdStrike exceeded expectations in the third
quarter, with revenue of $786 million and earnings of 82 cents per
share. The company raised its annual forecast, now expecting
revenue of about $3.05 billion and earnings of $2.95 to $2.96 per
share. Shares are up 1.4% in Wednesday’s pre-market trading.
Micron Technology (NASDAQ:MU) –
Micron forecasts higher operating expenses in the
first quarter, estimating about $990 million, above the previous
forecast of $900 million. Despite this, the company anticipates
revenue close to $4.7 billion and an adjusted gross margin close to
breakeven, thanks to inventory improvements and price recovery.
Micron‘s shares fell on Tuesday with the news.
Hewlett Packard Enterprise (NYSE:HPE) –
Hewlett Packard Enterprise exceeded adjusted
earnings per share expectations with 52 cents, thanks to cost cuts.
However, the company projects an unfavorable outlook for the next
quarter due to difficult macroeconomic conditions, such as
persistent inflation and high interest rates. Revenue forecast for
the first fiscal quarter of 2024 is $6.90 billion to $7.30 billion,
with adjusted net income between 42 and 50 cents per share.
Affirm (NASDAQ:AFRM) –
Affirm‘s shares are up 0.8% in Wednesday’s
pre-market trading, after jumping 11.5% in Tuesday’s regular
session, driven by the growing adoption of the “buy now, pay later”
service. Analysts at Jefferies upgraded their recommendation for
Affirm from “Underperform” to “Hold”.
Unity Software (NYSE:U) – Unity
Software Inc. announced the closure of offices in 14
locations, migrating affected employees to remote work. The company
also revised agreements with Weta FX, expecting
revenue recognition and intangible asset costs in the fourth
quarter of 2023.
Textron (NYSE:TXT) – Textron
plans to cut approximately 725 jobs, representing 2% of its global
workforce, due to declining demand for some of its products, such
as motorized vehicles and fuel systems for European automotive
manufacturers. The company expects to complete the plan by the
first half of 2024, aiming for annual savings of about $75 million,
but also anticipates charges of $115 million to $135 million in the
fourth quarter. The company’s shares remained stable after the
announcement.
Leslie’s (NASDAQ:LESL) –
Leslie’s shares fell 15% in Wednesday’s pre-market
trading due to fourth-quarter earnings below expectations and bleak
forecasts for 2024. The company earned $16.5 million in the
quarter, compared to $57.9 million in the previous year, and
forecasts lower revenues and profits for the next year due to
challenges in the pool industry.
Farfetch (NYSE:FTCH) –
Farfetch founder José Neves is planning to take
the company private after a turbulent launch on the New York Stock
Exchange, according to the Telegraph. Working with advisors from
JPMorgan (NYSE:JPM), Neves, who holds 15% of the
company and 77% of the voting rights, has the support of
Alibaba (NYSE:BABA) and
Richemont.
Walt Disney (NYSE:DIS) – Ten animators from
Walt Disney working remotely in six U.S. states
are seeking unionization. They filed for a union election and seek
representation from the Animation Guild and IATSE, fighting for
equal rights and work standards. In other news, Walt
Disney CEO Bob Iger admitted at the company-wide town hall
on Tuesday that he faces multiple challenges since his return, but
remains optimistic. He highlighted that rebuilding the company
post-restructuring is more rewarding than fixing existing problems,
and spoke about focusing on efficiency and business expansion.
Las Vegas Sands (NYSE:LVS) – Las Vegas
Sands‘ principal shareholder Miriam Adelson sold $2
billion in company shares, planning to use the proceeds to acquire
a majority stake in the NBA’s Dallas Mavericks from Mark Cuban.
Reports suggest that Cuban values the stake at about $3.5 billion
but will maintain control of the team and its operations. The share
sale initially generated speculation about a new professional
sports franchise in Las Vegas.
Cabaletta Bio (NASDAQ:CABA), Gracell
Biotechnologies (NASDAQ:GRCL) – Shares of biotechnology
companies, such as Cabaletta Bio and
Gracell Biotechnologies, plummeted in Wednesday’s
pre-market trading after the FDA investigated cancer risks related
to approved CAR-T therapies, including products from
Bristol Myers Squibb (NYSE:BMY),
Novartis (NYSE:NVS), and Kite
Pharma. The FDA considers that the benefits outweigh the
risks, but is investigating. Shares of smaller companies suffered
more, although some analysts question the magnitude of the
reaction.
Avidity Biosciences (NASDAQ:RNA) –
Avidity Biosciences‘ shares are down 1.6% in
Wednesday’s pre-market trading after advancing 15% in Tuesday’s
regular session, reaching $7.08. The biopharmaceutical company
revealed a licensing and research agreement with Bristol
Myers Squibb (NYSE:BMY). As part of the partnership to
develop and commercialize cardiovascular drugs, Bristol
Myers will pay Avidity $60 million in
cash and acquire about $40 million in common stock of
Avidity at a price of $7.88 per share.
Boeing (NYSE:BA) – The Federal Aviation
Administration (FAA) adopted a new aircraft certification policy,
requiring rigor in flight control design changes, following the
fatal Boeing 737 MAX accidents in 2018 and 2019. The 2020
legislation obligates manufacturers to disclose critical safety
information. Additionally, RBC Capital upgraded Boeing’s stock
recommendation from “Sector Perform” to “Outperform” and raised the
target price from $200 to $275. Analysts believe that after supply
chain challenges and lowered expectations, the outlook for 2024 is
promising. This resulted in a 1.4% increase in shares on Monday,
reaching $222.37.
Honda Motor (NYSE:HMC) – Honda will invest $3.4
billion in electric motorcycles by 2030, raising the annual sales
target to 4 million. The company will launch 30 new models and
dedicated factories in 2027. Honda is seeking competitive pricing,
comparable to combustion models, focusing on India and ASEAN. Honda
aims for an operational profit margin of over 10% for motorcycles
and over 5% for electric bikes by 2030. In October, Honda’s global
automobile production increased by 23%.
Toyota Motor (NYSE:TM) – In October, Toyota
achieved a record in global production, with 900,285 vehicles, a
16.7% year-on-year increase, overcoming challenges like
semiconductor shortages and an accident at a supplier. Sales also
reached historic marks globally and abroad. Additionally, Toyota
and affiliates plan to sell about 10% of Denso, worth approximately
$4.7 billion, to finance expansion in electric vehicles. The sale,
divided between Toyota, Toyota Industries, and Aisin, is part of a
larger capital optimization strategy.
General Motors (NYSE:GM) – Following an
accident involving one of its autonomous taxis, General Motors is
considering cutting expenses in the Cruise unit, according to the
Financial Times. Cruise temporarily suspended its autonomous taxi
operations in the US and is reviewing safety, leading to executive
resignations.
Nio (NYSE:NIO) – Nio and
Geely (USOTC:GELYF), Chinese automakers, have
entered a strategic partnership to collaborate on battery-swapping
standards and technology, aiming for joint model development. This
agreement follows Nio’s partnership with Changan Automobile and
includes co-investment plans and building battery-swapping
stations.
Uber (NYSE:UBER) – Uber will integrate London’s
black cabs into its platform in 2024, facing historical resistance
from taxi drivers who see the company as a threat. Uber offers an
initial zero commission, seeking to harmonize relations after years
of tensions and protests.
Berkshire Hathaway (NYSE:BRK.B) – Charlie
Munger, Warren Buffett’s key partner at Berkshire Hathaway,
recently passed away, but this is unlikely to significantly impact
the company, dominated by Buffett. Buffett remains active as CEO
since 1965. People have long pondered Berkshire’s fate without
Buffett, who is 93. Buffett controls the company with a 15% stake
and anticipates a rise in shares after his death. Berkshire’s
future leadership will include Greg Abel as CEO, Ajit Jain in
insurance, and Ted Weschler and Todd Combs in investments.
Berkshire’s shares are stable in Wednesday’s pre-market following
Munger’s death news.
JPMorgan Chase (NYSE:JPM) – J.P.Morgan
forecasts an uncertain outlook for risk assets in the first half of
next year, awaiting clarity on monetary policy. Strategists,
including Mislav Matejka, expect an improvement in risk-reward for
stocks after interest rate cuts by the Federal Reserve. They
maintain an “Overweight” position in European stocks but may revise
this with changes in monetary policy. Additionally, Daniel Pinto,
president and COO of JPMorgan, predicts that the digital consumer
bank Chase UK, launched in 2021, will break even in 12 to 18
months. With about two million customers and $20 billion in
deposits, the bank exceeded expectations and plans global
expansion. JPMorgan also has a stake in Brazilian digital bank
C6.
Bank of America (NYSE:BAC) – Bank of America
agreed to pay $12 million to settle charges of sending inaccurate
information about mortgage applicants to the government, violating
the Home Mortgage Disclosure Act. Over 400 bank agents failed to
collect accurate demographic data, such as race, ethnicity, and
gender, from applicants. The bank, which neither admitted nor
denied the irregularities, promised to improve employee training
and has already corrected most of the data.
Citigroup (NYSE:C) – Kingdom Holding,
controlled by Saudi Prince Alwaleed Bin Talal, increased its stake
in Citigroup to 2.2%, buying shares worth approximately $450
million. The company, which already owned 1.6% of the bank, stated
that the investment aligns with its strategic plans, without
providing further details.
Carlyle Group (NASDAQ:CG) – Carlyle Group
announced that the acquisition company will be included in the
S&P MidCap 400 index starting Thursday, as determined by
S&P Dow Jones Indices.
Bank of Nova Scotia (NYSE:BNS) – Scotiabank
faces pressure from an advocacy group to divest from Israeli arms
manufacturer Elbit Systems, citing misinformation and security
concerns. Scotiabank, through its mutual fund 1832 Asset
Management, holds about 5.04% in Elbit. Recent protests have
heightened tensions, with the bank denying being Elbit’s largest
shareholder and highlighting the risk to employees and customers.
Eko, the advocacy group, maintains its petition despite the bank’s
claims.
Nomura Holdings (NYSE:NMR) – Nomura Holdings
plans to cut risks and costs in its wholesale business, aiming for
a risk-weighted asset reduction of up to 6% and additional cost
cuts of $100 million. Under CEO Kentaro Okuda’s leadership, the
company faces profitability challenges and high costs, seeking
improvements, particularly in fixed-income trading, and
reallocating resources to less risky areas like advisory and wealth
management.
Shein – U.S. lawmakers are demanding evidence
against the use of forced labor in Shein before its IPO. The
Chinese e-commerce giant plans to go public in New York amid U.S.
concerns over forced labor in its low-cost products. Following a
confidential IPO request, the company faces scrutiny over its
supply chain while trying to comply with SEC regulations and manage
its reputation in Washington.
Salesforce (NYSE:CRM)
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