US index futures are declining in pre-market trading this Thursday, primarily due to investors’ negative reaction to companies reporting results below expectations. Meta (NASDAQ:META) saw a 2.8% drop in pre-market trading, citing an uncertain economic environment as the reason, while Alphabet (NASDAQ:GOOGL) lost 1.7% due to disappointing cloud-related numbers. Amazon (NASDAQ:AMZN), which will release results later, fell by 1.5%.
At 06:40 AM, Dow Jones futures (DOWI:DJI) dropped 107 points, or 0.32%. S&P 500 futures fell 0.61%, and Nasdaq-100 futures fell 0.90%. The yield on 10-year Treasury bonds stood at 4.953%.
In the commodities market, West Texas Intermediate crude oil for December fell 1.23% to $84.34 per barrel. Brent crude oil for December dropped 1.10% to around $89.14 per barrel. Iron ore with a 62% concentration traded on the Dalian exchange rose 0.69% to $119.73, marking its third consecutive session of gains after three declining sessions.
The downward trend has extended to other markets, including stocks in Europe and Asia, which also recorded significant losses. The dollar strengthened, and the price of gold rose by 0.5%. The Japanese yen weakened against the dollar, raising speculation about possible government intervention in the foreign exchange market.
In Europe, the European Central Bank is expected to make a policy decision to keep interest rates unchanged for the first time in over a year.
US stock markets experienced a sharp decline in Wednesday’s session, with corporate earnings weighing on stock indices’ performance. The Dow Jones fell 105.45 points or 0.32% to 33,035.93 points. The S&P 500 dropped 60.91 points or 1.43% to 4,186.77 points, its lowest closing level in almost five months. The Nasdaq fell 318.65 points or 2.43% to 12,821.22 points, marking its worst day since February.
Alphabet (NASDAQ:GOOGL) reported below-expected results, while Meta’s (NASDAQ:META) results were expected after the market close. U.S. home sales exceeded expectations, while a Treasury auction had lower demand, influencing interest rates. Globally, tension in Gaza escalated with Israel preparing for a ground attack, raising oil prices. In Canada, the interest rate remained at 5%.
Regarding corporate earnings on Thursday, investors will be watching for reports from United Parcel Service (NYSE:UPS), Royal Caribbean Group (NYSE:RCL), Hershey (NYSE:HSY), Altria (NYSE:MO), Southwest Airlines (NYSE:LUV), Valero (NYSE:VLO), Northrop Grumman (NYSE:NOC), Newmont (NYSE:NEM), Merck (NYSE:MRK), before the market opens. After the close, results from Amazon (NASDAQ:AMZN), Intel (NASDAQ:INTC), Enphase Energy (NASDAQ:ENPH), Ford Motor (NYSE:F), Chipotle Mexican Grill (NYSE:CMG), United States Steel (NYSE:X), Vale (NYSE:VALE), Capital One (NYSE:COF), and others will be anticipated.
Wall Street Corporate Highlights for Today
Apple (NASDAQ:AAPL) – Apple plans a complete overhaul of its AirPods lineup, with an updated version of the standard AirPods in 2024 and a new Pro model in 2025. The changes will include improved design, cases, and audio quality. Additionally, a new version of AirPods Max is expected in 2024. The company also plans to discontinue the second and third-generation AirPods in favor of two fourth-generation models with similar prices but different features, including noise cancellation in the top-end version.
Meta Platforms (NASDAQ:META) – Mark Zuckerberg, CEO of Meta Platforms, has highlighted 2023 as a “year of efficiency,” earning praise from the market. The cost-cutting effort appears to be nearing completion, and analysts are confident despite the planned increase in payroll in 2024 to invest in artificial intelligence. Spending on AI is now more accepted by investors, boosting Meta. In other news, Malaysia’s communications regulator will warn TikTok and Meta for allegedly blocking pro-Palestinian content on their platforms. The Communications Minister threatens to take a firm stance if the issue persists, emphasizing the right to freedom of expression regarding the Palestinian cause.
Alphabet (NASDAQ:GOOGL), Meta Platforms (NASDAQ:META), Snap (NYSE:SNAP) – Google, Meta, and Snap exceeded quarterly revenue expectations, indicating that artificial intelligence is attracting marketers to digital platforms. Google reported a 9.5% increase in advertising revenue, while Meta plans to invest in AI next year. Snap saw its average revenue per user increase in the third quarter. The advertising market is rebounding, led by retail company spending, with Google and Meta standing out as potential beneficiaries. However, Meta noted softness in advertising spending related to the Israel-Gaza conflict.
Arista Networks (NYSE:ANET), Nvidia (NASDAQ:NVDA) – Shares of Arista Networks and Nvidia fell after Meta Platforms provided a lower-than-expected capital spending outlook for 2024. Meta plans to invest in servers, AI, and data centers, affecting related stocks.
ON Semiconductor (NASDAQ:ON) – ON Semiconductor’s shares fell about 25% from their record high. With earnings expected on Monday, the company has a history of surpassing estimates. Its focus on automotive and consumer chips protects it from trade restrictions with China. Analysts predict solid growth through 2026, which could boost the stock price, currently with an attractive valuation multiple.
Ford Motor (NYSE:F) – The UAW union and Ford reached a tentative agreement after a strike involving 45,000 workers. The agreement includes a 25% pay increase over four and a half years, strike rights, reversing past concessions, and pressuring other automakers. President Biden praised the agreement.
Stellantis (NYSE:STLA) – Stellantis announced the acquisition of a 21% stake in electric vehicle manufacturer Leapmotor in a $1.6 billion deal. This gives Stellantis access to Leapmotor’s advanced technology but faces increasing competition from Chinese electric vehicle manufacturers in Europe. Stellantis seeks to revitalize its presence in China, where it faces sales challenges. The deal also aims to help Stellantis expand its electric vehicle lineup to meet 2030 goals.
Southwest Airlines (NYSE:LUV) – Southwest Airlines reached a tentative agreement with the Transport Workers Union Local 556, which represents flight attendants. The union will communicate details and a voting schedule to members. Flight attendants were seeking pay increases and better working conditions.
Shell (NYSE:SHEL) – Shell plans to cut 15% of its workforce in its low-carbon solutions division and scale back its hydrogen business to boost profits under CEO Wael Sawan. About 200 jobs will be cut in 2024 as the company seeks to focus on more profitable low-carbon areas.
Berkshire Hathaway (NYSE:BRK.B), Occidental Petroleum (NYSE:OXY) – Berkshire Hathaway increased its stake in Occidental Petroleum, acquiring 3.9 million shares, raising its stake to 228 million shares worth $14.5 billion. Berkshire holds $8.5 billion in preferred Occidental shares. The company now owns 25.8% of Occidental Petroleum and paid about $63 per share in its latest purchase.
General Electric (NYSE:GE) – The offshore wind industry faced challenges in 2023, with project cancellations due to rising costs. General Electric (GE) incurred losses in its offshore wind turbine business but plans improvements. New York State will invest $300 million in wind equipment production as part of a plan to add 6.4 GW of renewable energy capacity. While projects on the East Coast have been delayed, new contracts offer lucrative opportunities for companies like RWE (USOTC:RWEOY), TotalEnergies (NYSE:TTE), and National Grid (NYSE:NGG), despite higher tariffs for consumers.
Endeavor Group Holdings (NYSE:EDR) – In Thursday’s pre-market, the value of talent agency and sports company Endeavor increased by 21.4%. Endeavor CEO Ari Emanuel announced in a press release that the company was exploring potential strategic options. The statement also emphasized that Endeavor is not considering selling its stake in TKO Group Holdings, which is the resulting company from the merger including WWE and UFC.
Morgan Stanley (NYSE:MS) – Ted Pick has been chosen as the next CEO of Morgan Stanley, succeeding James Gorman on January 1st. Pick, a former co-president of the company, led crucial divisions, including institutional securities and fixed income. He excelled in restructuring the fixed income division and has been with the company since 1990, serving on the management and operating committee.
Barclays (NYSE:BCS) – Barclays is laying off dozens of employees in its U.S. consumer banking division as part of a global cost-cutting effort. The layoffs represent about 3% of the division’s U.S. employees. The bank also announced a new round of restructuring to increase efficiency. Its shares fell 2.3% in Thursday’s pre-market in response to the bleak outlook for the domestic market.
Nomura Holdings (NYSE:NMR) – Nomura Holdings is reevaluating its business in China due to mounting losses in its Shanghai joint venture. The joint venture has faced challenges since 2019 and incurred CNY 225 million in losses in 2022. The review comes as Nomura cuts bankers in Hong Kong, and other global financial institutions conduct layoffs in Asia.
FedEx (NYSE:FDX) – FedEx warned that its Express deliveries in the U.S. could experience delays due to an overnight disruption in the FAA’s IT system. The company stated that affected shipments are not eligible for refunds or credits.
Unilever (NYSE:UL) – New Unilever CEO Hein Schumacher revealed plans to simplify the business by focusing on 30 key brands representing 70% of sales. Shares fell 3.2% in Thursday’s pre-market due to the lack of surprises in the strategy. Schumacher took over after several years of underperformance. The company met sales growth expectations in the third quarter but did not regain some customers due to cheaper products. The focus now is on improving gross margin without significant acquisitions. Additionally, CFO Fernando Fernandez was appointed.
Hershey (NYSE:HSY) – Consumer Reports found lead and cadmium in one-third of the chocolate products tested and urged Hershey to reduce these metals. Sixteen of the 48 products contained harmful levels. Hershey has expressed interest in reducing these metals in its chocolate. Consumer Reports is once again calling for action from the company.
Choice Hotels (NYSE:CHH), Wyndham Hotels and Resorts (NYSE:WH) – Choice Hotels has requested that the board of Wyndham Hotels and Resorts, a U.S. economy hotel operator, engage in merger negotiations. Wyndham had previously rejected a $7.8 billion acquisition offer from Choice.
Biogen (NASDAQ:BIIB), Eisai (USOTC:ESAIY) – Biogen and Eisai released promising data on the Alzheimer’s treatment Leqembi. The weekly subcutaneous version showed a 14% greater removal of amyloid plaques compared to the intravenous version after six months, potentially boosting the acceptance of the medication.
Sunnova Energy International (NYSE:NOVA) – Sunnova Energy International’s shares surged 9.9% in Thursday’s pre-market after the residential and commercial solar energy company announced measures that improved its corporate liquidity, completely eliminating the need for $500 million in planned capital for 2024.
Earnings
Meta Platforms (NASDAQ:META) – The parent company of Facebook, Meta, saw its stock fall by -2.7% after announcing third-quarter results that, while showing a reduction in profit and revenue estimates, exceeded expectations. Meta reported revenue of $34.15 billion and earnings of $4.39 per share, surpassing analysts’ projections of $33.56 billion in revenue and earnings per share of $3.63, according to LSEG.
IBM (NYSE:IBM) – The corporate services and cloud computing company reported adjusted earnings of $2.20 per share in its third-quarter earnings report, beating analysts’ estimates by 7 cents, according to LSEG. Additionally, the quarter’s revenue reached $14.75 billion, slightly above analysts’ forecast of $14.73 billion.
ServiceNow (NYSE:NOW) – In Thursday’s pre-market trading, the process automation company saw a 4.7% increase in its stock value due to third-quarter results that exceeded expectations. ServiceNow announced earnings of $2.92 per share, excluding extraordinary items, surpassing analysts’ expectations of earnings per share of $2.56, according to LSEG. Additionally, ServiceNow’s revenue reached $2.29 billion, also exceeding analysts’ forecasts.
Whirlpool (NYSE:WHR) – The appliance company lowered its full-year profit forecast. The company now estimates earnings per share of $16, in contrast to its previous forecast ranging from $16 to $18 per share. Nevertheless, Whirlpool exceeded earnings and revenue expectations in the third quarter.
Align Technology (NASDAQ:ALGN) – In Thursday’s pre-market trading, shares of the medical devices company fell more than 25%. This happened because Align issued a weak revenue forecast for the fourth quarter, and CEO Joe Hogan explained in a statement that the third-quarter results reflect lower-than-expected demand, along with a more challenging macroeconomic environment compared to the first half of the year. The company reported adjusted earnings per share of $2.14 and revenue of $960 million, which fell short of analysts’ expectations surveyed by LSEG.
Mattel (NASDAQ:MAT) – The toy manufacturer surprised analysts by reporting earnings and profits above expectations and even raised its full-year profit outlook. However, despite this positive performance, its stock price fell by -10.4% in Thursday’s pre-market trading. Mattel reported adjusted earnings of $1.08 per share, surpassing analysts’ expectations of earnings of 86 cents per share. Revenue reached $1.92 billion, while analysts had expected $1.84 billion.
WPP (NYSE:WPP) – The WPP Group revised its growth outlook for 2023, now predicting 0.5-1.0% growth due to reduced spending by technology clients and a slowdown in China. Third-quarter performance fell below expectations, with shares dropping 3% in Thursday’s pre-market trading. CEO Mark Read noted that technology companies are cutting marketing expenses. Growth at GroupM slowed to 1.6% due to client losses in the U.S. and technological deceleration. WPP plans to merge Wunderman Thompson and VMLY&R to create the industry’s largest creative agency.
Amazon (NASDAQ:AMZN) – Amazon seeks to increase its profit margin in the third quarter by boosting same-day delivery services. Investors expect a 2.67% increase in gross profit margins compared to the previous year.
Intel (NASDAQ:INTC) – Intel will release its third-quarter results, causing some concerns on Wall Street about its profit margins for the coming year. Revenue of $13.6 billion and earnings of 22 cents per share are estimated for the quarter, with analysts predicting $14.4 billion and 33 cents per share for the next quarter. Weak demand for data center server chips is a concern, with forecasts below consensus for 2024.
Honeywell (NASDAQ:HON) – Industrial giant Honeywell International is about to report its third-quarter earnings, offering investors an opportunity to assess its progress toward long-term goals. Wall Street expects earnings of $2.23 per share and sales of $9.2 billion. Its shares have fallen about 6% in the last 12 months but have exceeded estimates in previous quarters.
Merck (NYSE:MRK) – Merck will announce its quarterly results following a stock decline due to regulatory concerns and interest rates. Investors expect cancer treatments to boost results. Analysts project earnings of $1.95 per share and sales of $15.3 billion. The company also announced a collaboration with Daiichi Sankyo worth up to $22 billion.