US index futures are rising in pre-market trading this Tuesday, reflecting the relief in US interest rates that occurred yesterday, as well as economic activity data in the Eurozone and Japan. Investors are eager for information on corporate results and developments in the Israel-Hamas conflict.
At 06:56 AM, Dow Jones futures (DOWI: DJI) rose by 131 points, or 0.40%. S&P 500 futures rose by 0.48%, and Nasdaq-100 futures rose by 0.57%. The yield on 10-year Treasury bonds was at 4.869%, a day after the relief triggered by Bill Ackman of Pershing Square, who revealed he had closed his short position in bonds.
In the commodities market, West Texas Intermediate crude oil for December rose by 0.41% to $85.84 per barrel. Brent crude oil for December rose by 0.46% to nearly $90.25 per barrel. Iron ore with a 62% concentration traded on the Dalian exchange rose by 3.78%, priced at $118.15 per ton.
In the US economic calendar for Tuesday, investors await the release of S&P Global’s composite, industrial, and service PMIs at 09:45 AM, with forecasts below 50 points for all indicators. At 10:00 AM, the Richmond Fed releases the manufacturing index for October, while at 1:00 PM, the government conducts a two-year Treasury auction. At 4:30 PM, the API releases last week’s petroleum inventory changes.
In the Middle East, unconfirmed reports suggest that Israel has launched a ground incursion into the Gaza Strip, a significant development in the conflict with Hamas. On the other side, Hamas has released two hostages but demands access to fuel for further releases.
In Asia, markets had mixed performances due to US interest rates and contraction in Japan’s economic data.
In Europe, stock markets operated without a clear direction due to weak activity data in Germany, the UK, and the Eurozone. Other data includes a 4.2% unemployment rate in the UK in August and a negative 28.1 consumer confidence index in Germany for November. At 8:30 AM, a speech by European Central Bank President Christine Lagarde is scheduled, two days before the announcement of the monetary policy decision.
Stock markets had a mixed closing on Monday’s session. The Dow Jones fell 190.87 points, representing a 0.58% drop, closing at 32,936.41 points. The S&P 500 also experienced a decline of 7.12 points, or 0.17%, closing at 4,217.04 points. On the other hand, the Nasdaq Composite performed positively, rising 34.52 points, or 0.27%, to 13,018.33 points.
These fluctuations occurred amid changes in future interest rates, with the 10-year bond yield starting the day above 5% and then retreating to around 4.8%. Additionally, geopolitical factors had some impact on market sentiment, as the release of hostages by Hamas reduced the perception that the conflict could prolong for an extended period. The price of oil also experienced a drop of over 2% throughout the day. Furthermore, there is optimism regarding the financial results of major U.S. technology companies, the so-called ‘Big Techs,’ according to market analyses.
On the corporate earnings front for Tuesday, investors will be attentive to the reports from Coca-Cola (NYSE:KO), Verizon (NYSE:VZ), General Electric (NYSE:GE), RTX (NYSE:RTX), 3M (NYSE:MMM), Spotify (NYSE:SPOT), General Motors (NYSE:GM), NextEra Energy (NYSE:NEE), before the market opens. After the closing bell, results from Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), Snap Inc (NYSE:SNAP), Visa (NYSE:V), Teladoc Health (NYSE:TDOC), Texas Instruments (NASDAQ:TXN), among others, are expected.
Wall Street Corporate Highlights for Today
Nvidia (NASDAQ:NVDA), Arm Holdings (NASDAQ:ARM), AMD (NASDAQ:AMD), Intel (NASDAQ:INTC) – AI chip leader Nvidia plans to develop Windows-compatible CPUs using Arm technology, following in the footsteps from Apple (NASDAQ:AAPL). AMD also intends to enter the market, challenging Intel. Microsoft (NASDAQ:MSFT) is looking for alternatives to not depend on a single supplier, promoting AI in new chips. The transition to new architectures presents compatibility challenges for Intel’s x86 architecture, but competition promises to shake up the PC industry.
Microsoft (NASDAQ:MSFT) – Microsoft plans to invest $3.2 billion in expanding its artificial intelligence (AI) and cloud computing capabilities in Australia over the next two years. This will include increasing its computing capacity by 250% to meet growing demand for cloud computing and training 300,000 Australians in digital skills. Additionally, Microsoft will expand cyber threat intelligence sharing with the Australian Signals Directorate. The company did not detail how the funds would be spent. The initiative is seen as an influence effort in a country that is considering AI regulation.
Alphabet (NASDAQ:GOOGL) – Google, responding to a request from the Israel Defense Forces, has disabled real-time traffic updates in its Maps and Waze apps in Israel and the Gaza Strip due to security concerns. Apple (NASDAQ:AAPL) would also have followed this measure.
Big Tech – US tech giants including Microsoft, Alphabet (NASDAQ:GOOGL), Meta Platforms (NASDAQ:META) and Amazon (NASDAQ:AMZN), are expected to report strong quarterly revenue growth driven by enterprise software and robust digital advertising. While demand for legacy products has stabilized, growth in cloud computing may continue, especially for Microsoft. However, investment in AI could impact results in the short term, with relevant revenue likely not arriving until 2025.
Pinterest (NYSE:PINS) – Analysts are becoming more bullish on Pinterest as the company prepares to release its quarterly results. The company has faced challenges in advertising, but recent developments and optimistic outlook are boosting analyst confidence. The number of analysts rating the stock a “Buy” increased from 39% to 59% on Monday. Shares rose 1.2% in premarket trading Tuesday.
Foxconn (USOTC:FXCOF) – Taiwan Vice President Lai Ching-te criticized China for investigating Apple (AAPL, AAPL34) supplier Foxconn during the election. He emphasized that China should value Taiwanese companies and not pressure them. The investigation comes as Foxconn founder Terry Gou runs for president of Taiwan. Taiwan accuses China of election interference and economic pressure.
PDD Holdings (NASDAQ:PDD) – PDD Holdings founder Colin Huang saw his fortune grow by $13.8 billion in one year, driven by growing demand for discount e-commerce platforms like PDD. He rose to third place on the Hurun Rich List, reflecting the changing e-commerce landscape, both in China and abroad. Jack Ma, founder of Alibaba, fell to 10th place on the list. Nongfu Spring founder Zhong Shanshan retained the top spot with a fortune of US$62 billion, while Tencent founder Pony Ma came in second place with US$38.6 billion.
Redfin (NASDAQ:RDFN) – Share price increased 9.41% in Tuesday’s premarket. Redfin disclosed that funds managed by Apollo Capital and its affiliates have agreed to make up to $250 million in financing available to the real estate brokerage through a loan, as recorded in a document submitted to the United States Securities and Exchange Commission. This agreement extends Redfin’s debt maturity until 2028.
Barclays (NYSE:BCS) – Barclays proposed significant cost cuts due to competition for deposits, even as quarterly profit slightly exceeded expectations. Seeking to improve returns, the British bank is considering cost-saving measures in the fourth quarter, sending its shares down -3.3% in Tuesday’s pre-market, and those of rivals Lloyds (NYSE:LYG) and NatWest (NYSE:NWG). The efficiency strategy covers several areas of the bank, but details have not yet been disclosed. The institution has already started to reduce costs, including job cuts and exploring options for its payments unit.
JPMorgan Chase (NYSE:JPM) – The $290 million settlement between JPMorgan Chase and Jeffrey Epstein’s accusers faces objections from 16 U.S. attorneys general and Washington, DC. They dispute language in the settlement that limits sex trafficking victims’ pursuit of compensation. Deutsche Bank (NYSE:DB) reached a similar deal without this language.
Goldman Sachs (NYSE:GS) – Goldman Sachs Asset Management announced the successful close of its global infrastructure fund, West Street Infrastructure Partners IV, raising $4 billion, earmarked for infrastructure investments including energy transition, transportation and logistics around the world. The fund has already committed US$2.3 billion to eight companies in various sectors, including renewable energy. Goldman Sachs also warned that rising long-term Treasury yields pose a challenge to a potential recovery in European stocks. This is despite the yield curve between US two-year and 10-year bonds having flattened this year. European stocks are facing declines, and valuations are not attractive.
BlackRock (NYSE:BLK) – BlackRock Investment Institute strategists warn that inflation volatility could disappoint investors hoping for U.S. corporate earnings growth to revive the S&P 500. They see stagnant profits, inflationary risks and elevated valuations, although they remain bullish on large-cap technology, healthcare and Japanese stocks.
Bain Capital (NYSE:BCSF) – Bain Capital and DNE Group, a Chinese industrial real estate company, have formed a joint venture with a capital commitment of US$250 million to invest in industrial park assets in China, initially focusing on area of the Yangtze River Delta. Beijing seeks to modernize its industrial sector, boosting investments in areas such as chip production and robotics.
Brookfield Asset Management (NYSE:BAM) – Brookfield Asset Management Ltd., a Canadian asset management company, is considering raising dedicated funds for investments in the Middle East, seeking to strengthen its presence in the region. Options include private equity investments and real estate transactions, with a focus on sectors such as business services, financial infrastructure, healthcare and real estate.
Coinbase Global (NASDAQ:COIN) – Coinbase saw an 8.1% increase in pre-market trading, driven by the rise in Bitcoin (COIN:BTCUSD) prices over the last 24 hours, which now surpass $34,300.
Vanguard (NASDAQ:VGSH) – Vanguard remains optimistic about long-term Treasuries, predicting the economy will slow in 2024, ending the Fed’s rate hike cycle. Vanguard believes long-term bonds are attractive and companies with high Credit ratings have solid foundations.
Campbell Soup (NYSE:CPB) – Campbell Soup said its $2.33 billion acquisition of Sovos Brands has been delayed until next year due to requests for additional information by the FTC. The transaction is now expected to close in mid-2024 as both companies continue to collaborate on the regulatory review.
McDonald’s (NYSE:MCD), Chipotle (NYSE:CMG) – Despite concerns about consumer spending, McDonald’s and Chipotle are outperforming the overall dining industry, according to foot traffic data from Placer.ai. Both chains have focused on innovation and menu improvements in recent years, which positions them well to face industry challenges.
Oatly (NASDAQ:OTLY) – Swedish non-dairy products company Oatly is leading a campaign for climate labeling on food. They print the carbon impact of their products on packaging and advocate for a standardized system to help consumers make sustainable choices.
Microsoft (NASDAQ:MSFT), Palantir Technologies (NYSE:PLTR), Abercrombie & Fitch (NYSE:ANF) – Major U.S. companies, including Microsoft, Palantir Technologies, and Abercrombie & Fitch, are offering menopause benefits due to the increase in women in the workforce. work, representing 20% of the female workforce. Around 4% of employers offering sick leave are providing additional support for menopause. Lost productivity and medical expenses related to menopause cost the U.S. economy $26.6 billion per year. Companies are stepping in to support female employees and retain experienced leaders.
General Dynamics (NYSE:GD) – The United Auto Workers (UAW) union and General Dynamics have agreed to a tentative contract covering 1,100 workers, avoiding a strike. The four-year deal offers a 14% pay raise, inflation protection and rejects health concessions proposed by the company.
Stellantis (NYSE:STLA) – Stellantis faces a strike at its Sterling Heights, Michigan, factory, hampering production of Dodge RAM 1500 pickup trucks. Despite the strike, Stellantis shares rose 0.3% in premarket trading on Tuesday, reflecting its relative resilience compared to Ford (NYSE:F) and General Motors (NYSE:GM).
Lockheed Martin (NYSE:LMT), Boeing (NYSE:BA) – Lockheed Martin Corp has withdrawn from the competition to build refueling tankers for the United States Air Force, giving Boeing an edge in winning the contract. Airbus, which joined Lockheed, will continue in the competition. Victory would secure Airbus (EU:AIR) its first aircraft contract with the U.S. Air Force. Lockheed’s withdrawal surprised many industry observers.
Boeing (NYSE:BA), RTX (NYSE:RTX), Spirit AeroSystems (NYSE:SPR) – Investors are concerned about Boeing, RTX and Spirit AeroSystems, which are facing production problems and defects. All are expected to record losses in the 3rd quarter, raising uncertainty about annual targets. Concerns include component replacement, drilling issues and Boeing’s cash flow generation for 2023.
Fisker (NYSE:FSR) – Fisker has reduced the price of the Ocean Extreme SUV by 11% in the US, while increasing the prices of the cheapest variants. The company responds to competition and price wars in the electric vehicle market.
Petrobras (NYSE:PBR) – Petrobras plans to change its bylaws, opening the possibility for politicians to occupy leadership positions, reversing 2016 rules that restricted political appointments in state-owned companies. The change depends on shareholder approval and aims to comply with an injunction from the Supreme Federal Court of Brazil.
ConocoPhillips (NYSE:COP)- After major acquisitions by Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX), ConocoPhillips could be next to pursue a major purchase in the oil industry, according to analysts at KeyBanc. The company is considering options including incremental acquisitions in the Permian Basin and evaluating private companies such as Endeavor Energy Resources (NYSE:EDR).
Earnings
General Electric (NYSE:GE) – General Electric raised its profit and free cash flow forecast for 2023 as demand for air travel recovers, boosting growth in its aerospace business. The company expects adjusted earnings between $2.55 and $2.65 per share, surpassing analyst estimates. GE expects free cash flow to increase to as much as $5.1 billion. Its aviation operations are experiencing rapid growth. GE plans to spin off GE Vernova, its power generation and renewable energy units, in the second quarter of 2024, leaving GE Aerospace as a standalone business.
Novartis (NYSE:NVS) – Novartis revised its profit forecast for 2023 due to cost reductions and higher prices for the multiple sclerosis drug Kesimpta, which beat estimates with sales of $657 million. The company’s restructuring is advanced, resulting in efficiency and increased group sales in the third quarter, reaching US$11.78 billion, excluding contributions from Sandoz, exceeding analysts’ expectations of US$11.25 billion.
Logitech International (NASDAQ:LOGI) – Logitech International raised its full-year forecast after reporting an increase in profits and a slowdown in falling sales in the second quarter. The company now expects full-year sales of $4 billion to $4.15 billion, up from its previous forecast of $3.8 billion to $4 billion, and forecasts non-GAAP operating profit higher than previous estimates.
Crane Company (NYSE:CR) – Crane reported third-quarter results that exceeded Wall Street expectations and announced acquisition plans. The company reported a profit of $55 million for the quarter, compared with a loss of $59 million a year earlier, on sales of $530 million, an increase of 10%. Crane also raised its EPS outlook for 2023 and announced the purchase of German company Baum GmbH for $91 million, with plans to pursue other potential acquisitions.
Cadence Design Systems (NASDAQ:CDNS) – The company specializing in electronic systems design fell approximately 3.2% in Tuesday’s premarket after releasing a below-expected earnings per share outlook for the current quarter. The company said it expects earnings per share, excluding items, in the range of $1.30 to $1.36 for the quarter, while analysts surveyed by FactSet expected $1.37 per share.
Teck Resources (NYSE:TECK) – The Canadian mining company reported third-quarter results below expectations due to lower prices for steel coal and zinc, as well as reduced sales of steel coal and copper from Highland Valley. Teck Resources reported adjusted earnings of C$0.76 per share in the third quarter, below analysts’ average estimate of C$1.09 per share, excluding items. The company also raised capital cost guidance for its QB2 copper project in Chile and revised downward its copper and steelmaking coal production outlook for 2023.
Cleveland-Cliffs (NYSE:CLF) – Cleveland-Cliffs reported third-quarter adjusted earnings of 54 cents per share, beating analyst forecasts. The company’s CEO, Lourenço Gonçalves, highlighted that cost cuts resulted in a reduction in the unit cost per ton of steel in the quarter.
TrueBlue (NYSE:TBI) – The workforce solutions provider released a third-quarter performance report below expectations. TrueBlue failed to meet earnings and revenue forecasts established by the consensus of analysts surveyed by FactSet. Furthermore, the revenue projection for the fourth quarter was dismal, with the company estimating a value between US$450 million and US$475 million, while analysts predicted US$501 million.
Hexcel (NYSE:HXL) – The industrial company missed FactSet consensus forecasts for the third quarter in terms of both earnings and revenue. Despite this, the company maintained its full-year guidance, reaffirming that it expects adjusted earnings in the range of $1.80 to $1.94 per share, while Wall Street analysts had forecast $1.94 per share.
Agilysys (NASDAQ:AGYS) – The technology provider for the hospitality industry reported a profit of 25 cents per share, excluding items, in the fiscal second quarter, which represents an increase from the 24 cents per share recorded in the same period a year ago. Additionally, the company has revised upward its full-year revenue guidance, now anticipating revenue in the range of $235 million to $238 million, compared to its previous forecast of revenue in the range of $230 million to $235 million.
KKR Real Estate Finance Trust (NYSE:KREF) – The real estate investment trust exceeded expectations in the third quarter in terms of distributable earnings per share. KKR Real Estate Finance Trust announced distributable profit of 25 cents per share, while analysts surveyed by FactSet expected 4 cents per share.
General Motors (NYSE:GM) – General Motors is expected by analysts to report third-quarter results with earnings of $1.87 per share and sales of $42.5 billion. Compared to the previous year, when it recorded a profit of US$2.25 per share on sales of US$41.9 billion. Investors will pay attention to information about labor, costs and interest rates.