U.S. index futures show a negative trend in pre-market trading this Wednesday, in contrast to the robust recovery observed in the major indices in 2023.

At 05:02 AM, the Dow Jones futures (DOWI:DJI) fell 19 points, or 0.05%. The S&P 500 futures fell 0.15%, and the Nasdaq-100 futures declined 0.28%. The 10-year Treasury bond yield stood at 3.892%.

In the commodities market, oil prices are on the rise, with traders keeping an eye on developments in the Red Sea. West Texas Intermediate crude oil for February rose 1.24% to $74.86 per barrel. Brent crude oil for February increased by 1.12%, nearing $80.12 per barrel. Iron ore with a 62% concentration, traded on the Dalian exchange, rose 1.46% to $132.78 per ton.

On Wednesday’s economic agenda, investors are awaiting the third-quarter current account balance, which will be published at 08:30 AM by the Department of Commerce. Additionally, consumer confidence data for December will be released at 10:00 AM by the Conference Board, and existing home sales for November at 10:00 AM by the NAR. Petroleum inventory positions as of the past Friday will be published at 10:30 AM by the Department of Energy (DoE).

Most European markets are recording losses after a positive previous session. Surprisingly, UK inflation fell to 3.9% in November, well below October’s 4.6%, indicating a greater slowdown than expected. This scenario exerts additional pressure on the Bank of England for potential interest rate cuts in 2024. Recently, the Bank kept its key interest rate stable at 5.25%, emphasizing that monetary policy may need to remain restrictive for an extended period.

Asian markets mostly closed higher. In Japan, stocks extended gains after the Bank of Japan maintained its ultra-flexible monetary policy, with interest rates at -0.1% and yield curve control. BOJ Governor Kazuo Ueda expressed a dovish tone. In China, benchmark lending rates remained steady, with the one-year rate at 3.45% and the five-year rate at 4.2%. Shanghai SE fell 1.03%, while Nikkei rose 1.37%, Hang Seng increased 0.66%, Kospi advanced 1.78%, and ASX 200 grew 0.65%.

On Tuesday’s close, the Dow, S&P 500, and Nasdaq registered nine consecutive sessions of gains. Optimism about interest rates persisted after the Fed announced cuts, and San Francisco Fed President Mary Daly indicated further reductions due to improving inflation. Residential construction surprised with a 14.8% increase in November. Gold rose, boosting the NYSE Arca Gold Bugs Index, and brokerage stocks also climbed. Sectors like biotechnology, oil services, and steel showed strong performance.

On the corporate earnings front for Wednesday, investors will be watching for reports from General Mills (NYSE:GIS), Live Ventures Incorporated (NASDAQ:LIVE), Winnebago Industries (NYSE:WGO), Toro (NYSE:TTC), and others before the market opens. After the closing bell, reports are expected from Micron Technology (NASDAQ:MU), BlackBerry (NYSE:BB), MillerKnoll (NASDAQ:MLKN), among others.

Wall Street Corporate Highlights for Today

Alphabet (NASDAQ:GOOGL) – Google plans to restrict responses generated by its chatbot Bard and related searches to U.S. elections until 2024, implementing restrictions early this year. The measure aims to deal with concerns about misinformation and online political influence, including major global elections such as those in India and South Africa.

Masimo Corp (NASDAQ:MASI), Apple (NASDAQ:AAPL) – Masimo’s CEO Joe Kiani is open to a deal with Apple following the import ban of the Apple Watch in the U.S. due to patent violations. Kiani seeks “honest dialogue” and apologies from Apple. The company alleges that Apple stole its intellectual property by hiring its engineers. Apple disagrees and is pursuing legal options. Kiani suggests that a ban could be avoided if Apple manufactured the watch in the U.S., unlike Masimo, which produces its technology locally.

Accenture (NYSE:ACN) – In the first quarter, Accenture reported a revenue of $16.22 billion, a 3% increase. However, revenue from communications, media, and marketing sectors dropped 10%, and sales in North America fell 1%, reaching $7.56 billion. Accenture forecasts revenue below Wall Street estimates for the second quarter, citing cautious customer spending due to economic uncertainty.

General Motors (NYSE:GM), Toyota Motor (NYSE:TM), Volkswagen (TG:VOW3) – Major automakers, including GM, Toyota, and Volkswagen, oppose the proposed recall of 52 million airbag inflators by the U.S. NHTSA, arguing that risks are small and questioning the agency’s rationale. The NHTSA seeks the recall after an eight-year investigation related to one death and seven injuries in the U.S. Automakers and airbag manufacturers claim the NHTSA has not demonstrated the need for a massive and unprecedented recall. ARC Automotive and Delphi Automotive are the manufacturers in question. If the recall happens, it will be the second largest in U.S. history.

Toyota Motor (NYSE:TM) – Daihatsu, a unit of Toyota, will halt vehicle shipments due to safety issues in 64 models, including some from Toyota. The scandal also affected Mazda and Subaru. Toyota announced a “fundamental reform” of Daihatsu to restore its reputation, and shares remained stable in Wednesday’s pre-market.

Tesla (NASDAQ:TSLA) – Tesla is not awarding annual stock-based merit awards to its employees, according to Bloomberg News. This follows the announcement by the United Auto Workers union of an effort to organize the non-unionized automotive sector in the U.S., including Tesla. However, employees received modest salary adjustments, and some received stock renewals to maintain competitive pay.

Boeing (NYSE:BA) – The FAA has no set timeline to certify Boeing’s 737 MAX 7, prioritizing safety and complete data. Boeing is seeking a waiver from regulations related to the engine nacelle and anti-ice system of the MAX 7 to expedite certification. Additionally, it was announced on Tuesday that Lufthansa (TG:LHA) ordered 80 planes from Boeing and Airbus (EU:AIR) worth $9 billion, including 40 Boeing 737 MAX 8s and 40 Airbus A220-300s, with future purchase options. It’s Lufthansa’s first narrow-body Boeing plane purchase in 30 years and the first of the 737 MAX model.

Southwest Airlines (NYSE:LUV) – Southwest Airlines and the pilots’ union reached a preliminary five-year contract agreement worth $12 billion. The union will review the deal before sending it to member voting. Negotiations lasted over three years. Pilot shortages are increasing bargaining power in the sector.

FedEx (NYSE:FDX) – FedEx announced an adjusted profit of $1.01 billion for the quarter ending November 30, equating to $3.99 per diluted share, 19 cents below analyst expectations. The company also reduced its annual revenue forecast, predicting a single-digit decline from the previous year. The company still expects to earn between $17 and $18.50 per share in fiscal year 2024, the same guidance provided in September. Shares fell more than 9% after the announcement.

Alibaba (NYSE:BABA) – Alibaba’s co-founder and executive chairman Eddie Wu will take over as CEO of Taobao and Tmall Group, Alibaba’s main e-commerce unit. This is part of a broader reshuffle after Alibaba was surpassed by other e-commerce companies in China, and its stock lost value this year. In other news, Japanese company BWB Inc. sued Alibaba in three countries for alleged patent infringement in cross-border electronic transactions. BWB seeks injunctions and damages in Japan, South Korea, and the U.S., claiming Alibaba infringed its patents related to customs clearance and logistics. Alibaba denied the allegations.

Affirm (NASDAQ:AFRM), Walmart (NYSE:WMT) – Affirm announced it will make its “buy now, pay later” (BNPL) services available at self-service kiosks in over 4,500 Walmart stores in the U.S. Affirm’s shares have risen 411% this year.

Lowe’s (NYSE:LOW) – Stifel downgraded Lowe’s, the building materials retailer, from “Buy” to “Hold” but increased the target price from $235 to $240.

Worthington Enterprises (NYSE:WOR) – In the second fiscal quarter, Worthington Enterprises reported a net profit of $24.3 million, or 49 cents per share, an increase from the same period last year. However, revenue dropped 7.5% to $1.09 billion, influenced by its consumer products and sustainable energy solutions units. The company completed the spin-off of its steel processing business, Worthington Steel, in December.

FuelCell Energy (NASDAQ:FCEL) – FuelCell reported fourth quarter financial results with revenue of $22.5 million and a loss of 7 cents per share, below Wall Street expectations. The company attributed the revenue decline mainly to lower product revenues and is seeking future growth and profitability.

General Electric (NYSE:GE) – GE’s shares hit a new 52-week high on Tuesday. The rise in shares is attributed to improved profitability and corporate restructuring. Analysts are also optimistic about 2024, reflected in the target prices of the shares. GE’s division of its energy and aviation businesses is planned for the first half of 2024.

Union Pacific (NYSE:UNP) – The prolonged closure of two critical railway bridges between the U.S. and Mexico, due to increased crossings by illegal migrants, is causing “huge losses” and threatens the supply of yellow corn and soybean meal in Mexico, essential for livestock and industry. The Mexican agricultural lobby, CNA, warned about the critical situation, noting that Mexican soybean meal supply ranges from 3 to 8 days, while yellow corn ranges from 8 to 20 days. Union Pacific, the main freight rail operator, estimates the daily economic impact of the closures exceeds $200 million.

Steelcase (NYSE:SCS) – Steelcase announced third quarter fiscal earnings above analyst estimates, but revenue fell 6% to $777.9 million, below forecasts. The company predicted fourth quarter revenues between $765 million and $790 million, lower than the previous year. Shares fell 9.4% in Wednesday’s pre-market.

Telefonica (NYSE:TEF) – The Spanish government plans to acquire up to a 10% stake in Telefonica. The move aims to provide Telefonica with greater shareholder stability and corresponds to the recent purchase of a 9.9% stake in Saudi Arabia’s STC.

Diageo (NYSE:DEO) – Diageo faces challenges after the company warned last month of falling sales in Latin America and the Caribbean. Demand for premium brands is lagging behind cheaper options, making inventory clearance difficult. Bigger challenges include a declining market in the U.S. and global post-Covid slowdown. Shares have fallen 22% year-to-date, causing investor skepticism.

Starbucks (NASDAQ:SBUX) – Starbucks’ CEO Laxman Narasimhan stated that protests against the company related to the Israel-Hamas conflict were influenced by misinformation on social media. Starbucks also faced vandalism and publicly disagreed with a union expressing support for Hamas on social media.

Airbnb (NASDAQ:ABNB) – Airbnb was fined by the Australian Federal Court for misleading consumers about accommodation prices. The company displayed prices only in U.S. dollars without making it clear they were in foreign currency, affecting over 2,000 Australian customers. Airbnb regretted the incident and apologized to the affected customers.

Spotify (NYSE:SPOT) – American authors are concerned about Spotify’s payment model for audiobooks, arguing it could reduce their earnings. A group, the Coalition of Concerned Creators, is calling for more transparency in payments. Spotify defends its model, while publishers claim authors will receive royalty credits for each unit listened to.

Kenvue (NYSE:KVUE) – Kenvue won a significant legal case related to Tylenol, as a federal judge did not allow plaintiffs to present evidence linking the drug to neurological disorders in children.

BlackRock (NYSE:BLK) – BlackRock updated its spot bitcoin ETF application to allow cash redemptions, seeking regulatory approval. The move follows a trend of cryptocurrency ETFs to revive the market after collapses in 2022.

HSBC Holdings (NYSE:HSBC) – HSBC has expanded its equity research team in the Americas, hiring 12 analysts and growing the team to 24 people. This allowed the bank to expand its US equity coverage to more than 250 stocks across 83 sectors, meeting growing demand from wealthy clients, especially in Asia. HSBC’s wealth division manages around US$1.6 trillion in assets.

UBS (NYSE:UBS) – UBS has appointed Nozomi Moriya as equity strategist in Japan due to growing demand from institutional investors as the Japanese stock market outperforms many other markets. The Nikkei index is up 29% this year, and UBS is expanding its presence in the country after acquiring Credit Suisse. In addition, the bank appointed other professionals to positions related to research in specific sectors.

Jefferies Financial Group (NYSE:JEF) – Jefferies Financial Group has achieved success in the municipal finance sector, becoming the fourth largest player. Kym Arnone and her team’s leadership contributed to growth, securing major deals and avoiding political controversy. She is the only woman to lead a major public finance department and has a solid reputation. Jefferies has expanded its presence in the sector, taking advantage of the exit of other banks and hiring notable talent.

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