US index futures are mixed in Wednesday’s pre-market, influenced
by the quarterly results of Microsoft and Alphabet, which set the
stage for other major technology companies yet to report their
results this week.
At 06:51 AM, Dow Jones futures (DOWI:DJI) rose by 39 points, or
0.12%. S&P 500 futures fell by 0.35%, and Nasdaq-100 futures
dropped by 0.58%. The yield on 10-year Treasury bonds stood at
4.863%.
In the commodities market, West Texas Intermediate crude oil for
December declined by 0.24% to $83.54 per barrel. Brent crude oil
for December fell by 0.12% to nearly $87.97 per barrel. Iron ore
with a 62% concentration, traded on the Dalian exchange, rose by
3.32% to $119.20, marking the second consecutive session gain after
three declines.
On Wednesday’s economic calendar, investors are awaiting new
home sales data for September, to be released by the Department of
Commerce at 10:00 AM. At 10:30 AM, inventory data for the week
ending October 20th will be published. Jerome Powell is scheduled
to speak at an event in Washington at 16:45 PM. In the political
arena, the race for the U.S. House Speaker position remains
undecided.
Asian stock markets had mixed results. Shanghai Composite and
Japan’s Nikkei rose, while Hong Kong’s Hang Seng gained. South
Korea’s Kospi and Australia’s ASX 200 fell due to
higher-than-expected inflation in Australia. Troubled Chinese
developer Country Garden defaulted on a dollar bond, reflecting
China’s real estate crisis. Bank of Japan is monitoring bond yields
before its policy meeting.
In Europe, most markets declined, except the UK’s FTSE 100,
which saw a slight increase. Stoxx 600 fell, with mining stocks
rising and retail stocks dropping. Deutsche Bank’s 7% share
increase couldn’t boost the index, as Kering, Reckitt Benckiser,
Worldline, and Peer Nexi all faced declines.
US Stock markets closed higher on Tuesday’s session, recovering
from previous declines, fueled by optimism about the financial
results of tech giants, with Alphabet (NASDAQ:GOOGL) and Microsoft
(NASDAQ:MSFT) reporting after the closing bell. The Dow Jones rose
204.97 points or 0.62% to 33,141.38 points. The S&P 500 gained
30.63 points or 0.73% to 4,247.68 points. The Nasdaq advanced
121.55 points or 0.93% to 13,139.87 points.
Before Tuesday’s session began, major companies, including
Coca-Cola (NYSE:KO), General Motors (NYSE:GM), and Verizon
(NYSE:VZ), announced better-than-expected results, boosting
investor sentiment. Additionally, international efforts to resolve
the impasse between Israel and Hamas influenced a drop in oil
prices to less than $90 per barrel. It’s worth mentioning the PMI
indicators released in both Europe and the U.S. In Europe, the data
was discouraging for both the services and industrial sectors,
while in the U.S., the statistics exceeded expectations.
On Wednesday’s corporate earnings front, investors will be
watching for reports from Boeing (NYSE:BA), ThermoFisher
(NYSE:TMO), T-Mobile (NASDAQ:TMUS), Hilton (NYSE:HLT), Roper
Technologies (NASDAQ:ROP) before the market opens. After the
closing bell, results from Meta Platforms (NASDAQ:META), IBM
(NYSE:IBM), Servicenow (NYSE:NOW), Align Technology (NASDAQ:ALGN),
Baker Hughes (NASDAQ:BKR), and several other companies are also
expected.
Wall Street Corporate Highlights for Today
Amazon (NASDAQ:AMZN) – Amazon Web Services
(AWS) plans to launch a sovereign cloud in Europe, storing data on
servers in the European Union with exclusive control by AWS
employees residing in the EU. This complies with EU privacy and
security regulations, with AWS debuting in Germany and offering
services to European customers.
Apple (NASDAQ:AAPL) – Apple will support a
right-to-repair bill in the US, allowing independent repair shops
and consumers to access parts and tools to fix iPhones and
computers, reducing costs and promoting sustainability. Apple has
also supported similar legislation in California. Apple also plans
to redesign its TV app as part of a tvOS software update scheduled
for December. The revamp will include discontinuing dedicated apps
for renting and purchasing movies and shows and adopting a user
interface similar to Netflix (NASDAQ:NFLX).
Additionally, Apple announced a special event called “Scary Fast”
on October 30, possibly unveiling new Mac devices with a faster M3
chip.
Nvidia (NASDAQ:NVDA) – US restrictions on
Nvidia’s AI chip exports to China took effect on Monday, ahead of
the deadline. Nvidia does not foresee an immediate impact on
profits, while other companies like AMD
(NASDAQ:AMD) and Intel (NASDAQ:INTC) are also
assessing the impact.
Qualcomm (NASDAQ:QCOM) – Qualcomm unveiled its
Snapdragon Elite X chip for Microsoft (NASDAQ:MSFT) Windows
laptops, emphasizing its superior AI performance compared to Apple
chips. Qualcomm plans to make it available next year. This
development follows Microsoft’s push for AI features in
Windows.
VMware (NYSE:VMW) – VMware’s stock had unusual
movements on Tuesday, falling and then rising above
Broadcom’s (NASDAQ:AVGO) cash offer value.
Investors speculate about the extension of the stock election
period, driven by concerns about potential regulatory approval
delays in China.
ASML (NASDAQ:ASML) – Dutch lawmakers questioned
the Minister of Commerce about the legality of new US rules for
exporting ASML chip manufacturing machines to China. While they do
not oppose the US rules, they call for a more coordinated European
approach. The US rules aim to restrict exports of machines
containing US-made parts to curb Chinese technological
advancement.
Foxconn (USOTC:FXCOF) – Terry Gou, the founder
of Foxconn and a Taiwanese billionaire, had ambitions of becoming
the country’s president, but his candidacy is declining, and he
faces a tax investigation in China, possibly due to his decision to
run as an independent, which could benefit Taiwan’s separatist
candidate. Despite his wealth and connections, Gou has seen his
political popularity decline in polls.
Corning (NYSE:GLW) – Corning projected
fourth-quarter core sales below market expectations, citing a
potential impact from the strike at Detroit Three automakers. The
company provides automotive components and faces a slowdown in
demand for fiber optic cables. Its specialty materials business,
including Gorilla Glass for smartphones, was a positive exception,
boosted by the launch of the iPhone 15.
General Motors (NYSE:GM) – California ordered
on Tuesday that General Motors’ Cruise unit remove its autonomous
cars from state roads, citing public risk and misrepresentation of
safety. Cruise has suspended operations and is reviewing previous
incidents. GM withdrew its profit forecast for 2023 due to the
United Auto Workers (UAW) strike, which has shut down three highly
profitable factories in Arlington, Texas. The strike increases
weekly costs by $400 million. Negotiations continue, with the UAW
seeking additional gains.
Honda Motor (NYSE:HMC) – Honda Motor is ending
its partnership with General Motors to develop affordable electric
vehicles due to financial challenges. CEO Toshihiro Mibe stated
that the project has been canceled, and both companies will seek
solutions separately. The partnership aimed to compete with
Tesla (NASDAQ:TSLA) in producing affordable
EVs.
Stellantis (NYSE:STLA) – Stellantis plans a
joint venture with the French company Orano to recycle electric
vehicle batteries and scrap from its gigafactories in Europe and
North America. The agreement will provide access to essential
materials for electrification. Production will commence in the
first half of 2026.
Nikola (NASDAQ:NKLA) – Nikola’s shares closed
higher on Tuesday due to the possibility of receiving an infusion
of money after an arbitrator ordered former CEO Trevor Milton to
pay $165 million to the company for securities fraud conviction in
2022. This adds approximately $80 million to Nikola’s market
capitalization, which ended the second quarter with over $225
million in cash.
Carnival Corp (NYSE:CCL) – Carnival Corp’s
Australian unit was ordered to pay the medical expenses of a woman
who contracted Covid-19, following a judge’s decision that the
company misled passengers about safety risks in a landmark
class-action lawsuit. The judge concluded that Carnival Australia
should have canceled the March 2020 return voyage from Sydney to
New Zealand. The lead plaintiff received compensation for medical
expenses, but other parties are expected to seek greater
damages.
JetBlue Airways (NASDAQ:JBLU) – JetBlue has
asked the US Department of Transportation to ban KLM from Air
France at JFK Airport, New York, if planned restrictions at
Amsterdam’s Schiphol Airport occur, citing violations of the US-EU
Air Transport Agreement. KLM has warned of potential
retaliation.
BlackRock (NYSE:BLK) – BlackRock’s proposed
bitcoin ETF has been added to a DTCC clearinghouse eligibility
file, sparking speculation about its success and driving
Bitcoin (COIN:BTCUSD) to its highest level in 18
months. However, DTCC clarified that listing does not indicate
regulatory approval, and the SEC has not commented. Approval could
attract more investment into the crypto sector.
Goldman Sachs (NYSE:GS) – David Kamo has been
appointed by Goldman Sachs as global head of financial sponsor
mergers and acquisitions, leading efforts to work with private
equity firms and alternative asset managers in buying and selling
companies in their portfolios. He will also continue to lead
cross-market mergers and acquisitions for the bank.
KKR & Co (NYSE:KKR) – KKR & Co. is in
advanced negotiations to invest approximately $400 million in OMS
Group Sdn, a Malaysian submarine cable company. This investment
could accelerate OMS’ expansion plans, although deal details are
still under discussion.
S&P Global Ratings (NYSE:SPGI) – S&P
Global Ratings downgraded Israel’s sovereign debt outlook to
negative, citing risks associated with the Israel-Hamas conflict
and predicting a 5% economic contraction in the fourth quarter due
to security disturbances and reduced business activity.
Petrobras (NYSE:PBR) – Petrobras confirmed that
the capital reserve to be created will not be used for capital
investments but exclusively for dividend payments, calming market
concerns and positively impacting the company’s shares. The
decision on extra dividends will be made later.
Archer-Daniels-Midland (NYSE:ADM) –
Archer-Daniels-Midland Co exceeded profit estimates in the third
quarter due to strong ethanol and sweetener margins, along with
robust Brazilian agricultural exports. The company raised its
profit projections for the year and anticipated a return to profit
growth in the Nutrition unit in 2024.
SunPower (NASDAQ:SPWR) – SunPower fell 9.4% in
pre-market trading after the solar panel manufacturer announced it
would review its financial statements for 2022 and the first two
quarters of 2023. The company identified an overvaluation of
approximately $16 million to $20 million in consigned component
stock at third-party locations.
Eli Lilly (NYSE:LLY) – Most people want to lose
weight and make money, regardless of global uncertainties. Eli
Lilly’s shares are seen as an opportunity to capitalize on the
Mounjaro drug for obesity. Although there are risks, the thesis is
solid, even amid market turbulence.
Johnson & Johnson (NYSE:JNJ) – Johnson
& Johnson’s shares approached their lowest level in 52 weeks on
Tuesday, even after recent positive quarterly results, reflecting
general concerns about the pharmaceutical and medical device
industry due to political uncertainties, including new Medicare
drug pricing policies and the impact of obesity drugs on device
sales.
Earnings
Alphabet (NASDAQ:GOOGL) – Alphabet’s shares
were down 6.5% in Wednesday’s pre-market, despite surpassing
analysts’ expectations for third-quarter results and earnings.
Revenue showed accelerated growth of 11% compared to the previous
quarter, marking the first time in four quarters that revenue
reached a double-digit growth rate. However, Google Cloud revenue
came in at $8.41 billion, significantly below the consensus
estimate of $8.64 billion, as reported by StreetAccount.
Microsoft (NASDAQ:MSFT) – Microsoft’s shares
are up 3.7% in Wednesday’s pre-market after reporting first-quarter
financial results that exceeded expert expectations. Microsoft
reported earnings per share of $2.99 with revenue of $56.52
billion. This contrasts with analysts’ predictions of earnings per
share of $2.65 and revenue of $54.50 billion, according to LSEG.
Microsoft’s increased profit was driven by lower-than-expected
operating expenses and outstanding performance in its Azure cloud
computing segment.
Snap Inc (NYSE:SNAP) – The parent company of
Snapchat saw a 0.4% increase in pre-market trading after releasing
third-quarter results. Snap reported earnings of 2 cents per share
and revenue of $1.19 billion, surpassing analysts’ estimates polled
by LSEG, which projected a loss of 4 cents per share with revenue
of $1.11 billion. CEO Evan Spiegel highlighted a return to sales
growth during the quarter. The stock initially rose by up to 20% in
after-hours trading but then retreated as investors reacted to news
that some advertisers had reduced their spending due to the start
of the conflict between Israel and Hamas.
Stride (NYSE:LRN) – The technology-focused
education company experienced a 12.3% increase in pre-market
trading after reporting fiscal first-quarter financial results that
exceeded expectations. Stride announced earnings of 11 cents per
share, surprising analysts who had anticipated a loss of 37 cents
per share, according to FactSet. Additionally, revenue also
exceeded projections, reaching $480.2 million, while analysts
estimated $425.2 million. Strong enrollment performance in the
General Education and Professional Learning sectors drove revenue
growth.
Texas Instruments (NASDAQ:TXN) – Shares of the
semiconductor design and manufacturing company fell 4.5% in
pre-market trading after reporting mixed earnings results. The
company announced earnings per share of $1.85, which exceeded
analysts’ expectations of $1.82, according to LSEG. However,
revenue slightly missed estimates, totaling $4.53 billion compared
to analysts’ consensus of $4.58 billion.
Visa (NYSE:V) – The global payment company’s
shares fell 0.7% in Wednesday’s pre-market, even after reporting a
decline in profits and revenues for the last fiscal quarter. Visa
chose to increase its dividends by around 16% and also approved a
$25 billion stock buyback.
Teladoc Health (NYSE:TDOC) – In the third
quarter, Teladoc Health reported an increase in revenue, driven by
higher access rates, while net losses decreased compared to the
previous year. Revenue increased by 8% to $660 million from $611
million a year earlier. Analysts expected $664 million. Teladoc
reported a loss of $57.1 million, or 35 cents per share, compared
to a loss of $73.48 million, or 45 cents per share, a year ago.
Analysts expected a loss of 37 cents per share. The company
announced plans for an operational review to improve
efficiency.
CoStar Group (NASDAQ:CSGP) – The commercial
real estate company released profit and revenue projections for the
fourth quarter that did not meet analysts’ expectations. In the
third quarter, CoStar’s revenue reached $625 million, which fell
short of the consensus estimates of $625 million, according to
FactSet. Meanwhile, adjusted earnings per share were 30 cents, in
line with estimates.
Deutsche Bank (NYSE:DB) – Deutsche Bank pledged
more share buybacks and potentially higher capital returns to
shareholders, boosting its shares after reporting third-quarter
earnings 8% better than expected. The bank also highlighted growth
momentum and cost discipline but faces uncertainties in its
investment banking business and regulatory issues in the retail
sector.
Meta Platforms (NASDAQ:META) – Meta Platforms
CEO Mark Zuckerberg has been focusing on artificial intelligence
and cost reduction instead of investments in the metaverse.
Advertising remains the primary revenue source, driving
third-quarter sales estimates to $33.5 billion, with earnings of
$3.61 per share. Meta is seeking efficiency and expects increased
capital spending in 2024. Restrictive expenses could turn the “Year
of Efficiency” into years of efficiency, but questions about
AI-related costs and monetization are expected in the earnings
conference call.
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