US index futures are down in Thursday’s pre-market trading, with
Wall Street struggling to sustain the positive momentum from the
previous session, as investors await crucial labor market data.
At 06:47 AM, Dow Jones futures (DOWI:DJI) were down by 78
points, or 0.23%. S&P 500 futures fell 0.20% and Nasdaq-100
futures were down 0.12%.
The yield on the 10-year Treasury bond was at 4.723%. In a note,
analysts from Barclays Plc stated that the downward trend in global
bonds is likely to persist, unless there is a sustained drop in
stocks that revives interest in fixed-income assets.
In the commodities market, West Texas Intermediate crude oil for
November fell 1.61%, to $82.86 per barrel. Brent crude oil for
December dropped 1.50% to around $84.52 per barrel. OPEC+
maintained production cuts, but economic concerns and a drop in
fuel demand are pressuring prices. The Eurozone’s economy also
contracted, and U.S. gasoline demand decreased. Uncertain demand
and weaker economic data may limit the rise in oil prices.
On Thursday’s U.S. economic calendar, investors are awaiting, at
08:30, the release of August’s trade balance. Also, at 08:30, the
weekly unemployment claims data up to September 30 will be
announced. At 09:00, Loretta Mester, president of the Federal
Reserve of Cleveland, will give a speech at a symposium in Chicago.
At 11:30, Thomas Barkin, president of the Federal Reserve of
Richmond, will speak about economic projections at a conference. At
12:00, Mary Daly, president of the Federal Reserve of San
Francisco, will attend an event at the Economic Club. Lastly, at
12:15, Michael Barr, Vice Chairman of Supervision at the Federal
Reserve, will discuss cyber risks in the banking sector.
European stocks posted small gains. The Stoxx 600 index was up
0.1%, with travel shares up 1.6% and oil and gas down 1%. However,
there was volatility, with Alstom dropping 36% due to cash flow
concerns, and Metro Bank falling 29% in its bid to raise £600
million in debt and equity. Pandora rose 10% upon increasing its
growth targets.
Asian stocks rebounded from 11-month lows. The MSCI Asia-Pacific
index, excluding Japan, rose 0.9%. Japan’s Nikkei was up 1.8%, Hong
Kong’s Hang Seng advanced 0.4%, while mainland China’s markets
remained closed due to holidays. South Korea saw its consumer
inflation accelerate, and comments from the central bank governor
suggested a continued tight policy.
At Wednesday’s close, the Dow Jones rose 127.17 points or 0.39%
to 33,129.55 points. The S&P 500 advanced 34.30 points or
0.81% to 4,263.75 points. The Nasdaq Composite jumped 176.54
points or 1.35% to 13,236.01.
The drop in stocks and rising yields received temporary relief
due to new employment data, which revealed weakness and raised the
likelihood that the Federal Reserve will not need to raise interest
rates. Private payrolls increased by 89,000 last month,
compared to 180,000 in August. Big Tech stocks led the market,
boosting Nasdaq.
Additionally, the ISM services index was also released, showing
a slight decline in September, reaching 53.6, the lowest level this
year, although readings above 50 still indicate
expansion. However, the number was within expectations.
On the corporate earnings front Thursday, investors will be
watching reports from Constellation Brands (NYSE:STZ), LambWeston
(NYSE:LW), Conagra Brands (NYSE:CAG), AEHR Test Systems
(NASDAQ:AEHR), Levi’s (NYSE:LEVI) and CalAmp (NASDAQ:CAMP).
Wall Street Corporate Highlights for Today
Apple (NASDAQ:AAPL) – Apple has negotiated
with DuckDuckGo to replace Google as the default search engine in
the private mode of the Safari browser. Details of the
negotiations are expected to be released soon, following the
federal antitrust lawsuit against Google. In other
Apple-related news, CEO Tim Cook sold 511,000 shares of the
company, resulting in a gain of $41.5 million after
taxes. With the sale, he retains approximately 3.3 million
shares, valued at approximately $565 million. The company’s
shares are down 13% from their all-time high. Analysts also
downgraded the stock due to concerns about U.S. sales
growth. Apple also released an update to its iOS 17 software
on Wednesday to resolve an overheating issue related to the latest
iPhones in the iPhone 15 series, launched last month. The
update addresses battery life and overheating issues following
consumer complaints.
Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT)
– UK media regulator Ofcom has requested an investigation by the
antitrust authority, CMA, into the dominance of tech giants Amazon
and Microsoft in the British cloud market. Ofcom claims that
the combined share of AWS and Microsoft was 70-80% in 2022, making
it difficult to compete. Amazon disagrees with the findings,
while Microsoft is committed to keeping the cloud industry
innovative and competitive. The CMA will complete the
investigation by April 2025.
Amazon (NASDAQ:AMZN) – Amazon is set to
launch two test satellites for Project Kuiper, aiming to compete
with SpaceX’s Starlink. The initiative aims to cover the globe
with low Earth orbit satellites and provide Internet via
satellite. Amazon seeks to comply with its Federal
Communications Commission license and overcome challenges in the
spatial Internet market. Additionally, Amazon is shutting down
its live audio platform, Amp, as part of its efforts to reduce
costs and increase profits. The company learned from the
experience and plans to apply that knowledge to new experiences on
Amazon Music. This follows recent layoffs and changes to
Amazon’s delivery and streaming services.
Meta Platforms (NASDAQ:META) – Meta
Platforms announced the launch of generative artificial
intelligence (AI) tools for all advertisers. After testing
began in May, these tools, capable of creating content such as
background images and text variations, will be available in Meta’s
Ads Manager by next year. This marks the company’s first foray
into generative AI technology to create new content from vast
stores of past data.
Alphabet (NASDAQ:GOOGL) – Alphabet’s
Google has launched Pixel 8 smartphones and a new smartwatch
integrating AI technology more deeply. The Pixel 8 offers
advanced AI processing, especially in photography and spam
blocking. Starting prices are $699 for the Pixel 8 and $999
for the Pixel 8 Pro, both with the new Tensor G3 mobile
processor. Google also launched the Google Watch 2 for $349
with advanced AI-powered health features. Additionally, the
company also revealed its plans to incorporate generative
artificial intelligence (AI) capabilities into its virtual
assistant during an event in New York. This AI, called Bard,
will allow the assistant to assist users with tasks such as travel
planning and email follow-up.
Walt Disney (NYSE:DIS) – Walt Disney
announced temporary discounts on children’s ticket prices at its
theme parks, seeking to stimulate traffic following the
post-pandemic recovery. Although its park business has been
affected, it is now an important source of profit. Discounts
aim to maintain business growth.
Ford Motor (NYSE:F) – Negotiators from the
United Auto Workers (UAW) and Ford Motor narrowed their differences
over wage increases following a new offer from the automaker, amid
active negotiations. UAW President Shawn Fain plans to update
members on Friday, but it is unclear whether there will be further
strikes. In addition to Ford, active negotiations
with Stellantis (NYSE:STLA) and other
automakers
continue. General Motors (NYSE:GM)
secured a $6 billion credit line in preparation for a prolonged
strike. The situation is on the 20th day of strike since
September 15th. Additionally, Ford on Wednesday announced a
nearly 8% increase in U.S. auto sales during the third quarter,
driven by continued demand for SUVs and pickup trucks. The
automaker sold 500,504 vehicles in the quarter, surpassing the
previous year’s 464,674, in line with the overall increase in U.S.
vehicle sales.
Rivian Automotive (NASDAQ:RIVN) – Rivian
plans to sell $1.5 billion in convertible green bonds. The
bonds will mature in October 2030, offering the option of
converting into cash or shares. Rivian seeks financing to
expand its operations.
O’Reilly Automotive (NASDAQ:ORLY) –
Shares of O’Reilly Automotive were upgraded to “Buy” from “Neutral”
by Citi and the price target was raised to $1,040 from $983.
Citigroup (NYSE:C) – Citigroup is
undergoing a significant reorganization, reviewing employee rosters
to determine transfers and layoffs through November. CEO, Jane
Fraser, seeks to simplify the bank’s structure, focusing on
profitable areas. The company will offer severance pay and
advance notice to affected employees.
Goldman Sachs (NYSE:GS) – Goldman Sachs
advises a cautious approach towards Indian equities due to global
headwinds and valuable equity valuations. Foreign investors
are also selling Indian stocks, making conservative positioning
necessary over the next three to six months. While India is
seen as an alternative to China, stretched valuations and implied
volatility call for caution. Goldman recommends focusing on
large-cap stocks and puts on the Nifty index as a hedge against
risk.
Barclays (NYSE:BCS) – Barclays has begun
layoffs, planning to cut 3% of its global investment banking
workforce as part of an annual review covering trading and
research. Up to 300 employees could be affected, aiming to
simplify the franchise after a tumultuous year. CEO CS
Venkatakrishnan is seeking to stabilize the investment banking
franchise after leadership changes led to an exodus of bankers.
BlackRock (NYSE:BLK) – BlackRock plans to
launch the Climate Transition Oriented Private Debt Fund, an ESG
investment strategy, to tap the U.S. private credit
market. Climate transition has been one of the most popular
ESG strategies in the US, growing 304% in the last 18
months. The initiative seeks to meet client demand for
transition-oriented investment solutions.
Eli Lilly and Co (NYSE:LLY) – Eli Lilly
announced a leadership change at its diabetes and obesity unit
ahead of a regulatory decision on its weight-loss drug
Mounjaro. Patrik Jonsson will take up the role in January,
while Mike Mason will retire. The drug belongs to the GLP-1
class, driving the growing obesity market.
Orchard Therapeutics (NASDAQ:ORTX) –
Shares of Orchard Therapeutics nearly doubled to $15.79 following
the agreement to be acquired by Japanese company Kyowa
Kirin (TG:KY4) for a minimum of $16 per share
in cash, with a right additional contingent value of US$1 per
share. The total value of the acquisition could reach US$478
million. London-based Orchard Therapeutics specializes in
therapies based on a patient’s own stem cells.
Viatris (NASDAQ:VTRS), Novo
Nordisk (NYSE:NVO) – The US patent appeal board has
agreed to review a Novo Nordisk patent covering Ozempic following a
challenge filed by Viatris. Viatris is pleased with the
decision and awaits a final written decision in October 2024. Novo
Nordisk defends its intellectual property in the ongoing
dispute.
Rite Aid Corp (NYSE:RAD) – Rite Aid has
received a notice from the New York Stock Exchange that the company
is not in compliance with minimum pricing and market valuation
standards. The company has six months to regain
compliance. Shares are down 84% this year.
Exxon Mobil (NYSE:XOM) – Exxon Mobil
expects to earn between $8.3 billion and $11.4 billion in the third
quarter, driven by high oil, gas and fuel prices, a better
performance than the second quarter. The rise in oil prices
generated an increase of around 30% in profits from oil and gas
production. However, these gains are still below the
exceptional results from the same period last year, when natural
gas prices were rising due to geopolitical events and fuel demand
was at its peak.
Chevron (NYSE:CVX) – Efforts to finalize a
deal that would end strikes at Chevron’s liquefied natural gas
(LNG) plants in Australia face a snag, with unions accusing the
U.S. energy company of reneging on commitments, potentially setting
up to resume strikes. Chevron and unions have disagreements
over issues such as reimbursement for meals or training
trips. If there is no agreement, the matter may return to the
regulatory commission. Strikes at the Gorgon and Wheatstone
facilities have affected LNG markets but have not disrupted
shipments.
BHP Group (NYSE:BHP) – BHP Group is
focused on reducing costs to drive growth and takes a patient
approach to acquiring assets. The company’s development
director, Johan van Jaarsveld, emphasized that cost savings are
essential, and BHP is particularly interested in nickel as a growth
market. However, they maintain a cautious view on acquisitions
due to the need for subsequent asset divestment, which could dilute
the synergy value. BHP is also considering the sale of
non-core assets such as coal mines and projects acquired in recent
acquisitions.
BlackBerry (NYSE:BB) – BlackBerry plans to
separate its IoT and cybersecurity units, targeting an initial
public offering for IoT in the next fiscal year. The move
follows the trend of companies splitting up their units to create a
leaner structure, allowing investors to better value them. CEO
John Chen sees market opportunities in both units and believes this
new structure will increase operational agility.
Clorox (NYSE:CLX) – Cleaning product maker
Clorox said it expects to post a first-quarter loss due to a
cyberattack in August that caused disruptions to its
operations. The company is evaluating the ongoing impact of
this attack on its financial performance in fiscal 2024 and
beyond.
Costco Wholesale (NASDAQ:COST) – Costco
Wholesale announced a 4.5% increase in comparable store sales in
September compared to a year ago, an increase from the 4.3% growth
recorded in August. Online sales also increased by
3.7%. The retailer partly attributed this increase in
comparable-store sales to higher gasoline prices, which contributed
approximately 0.5% to this month’s increase.
ConAgra Brands (NYSE:CAG)
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