US index futures are up on Monday as investors brace for an important week filled with crucial events, including Federal Reserve rate decisions, job data releases, and Apple’s financial results.
At 06:09 AM, Dow Jones futures (DOWI:DJI) rose 171 points or 0.53%. S&P 500 futures were up 0.65%, and Nasdaq-100 futures increased by 0.76%. The yield on 10-year Treasury bonds stood at 4.871%.
In the commodities market, December West Texas Intermediate crude oil fell 1.03% to $84.66 per barrel. Brent crude oil for December dropped 0.85%, trading near $89.71 per barrel. Iron ore with a 62% concentration traded on the Dalian Exchange increased by 0.15% to $119.85 per ton, with persistent fears of higher interest rates in the U.S. limiting gains.
Asian markets closed with no clear trend, awaiting monetary policy decisions in Japan and Malaysia, as well as inflation data in South Korea and GDP figures in Taiwan and Hong Kong. The Japanese Nikkei fell 0.95%, while the South Korean Kospi rose 0.34%. The Shanghai SE index advanced 0.12%, and the Australian ASX 200 retreated 0.79%. Shares of Chinese construction firm Evergrande hit a historic low of 18.8 cents in Hong Kong due to the postponement of the liquidation hearing by Judge Linda Chan. Shares plunged over 20%, reaching their lowest point today. The hearing was rescheduled for December 4th, with Evergrande required to submit a restructuring proposal before that date to avoid dissolution.
Despite Middle East volatility, European markets are trading positively, driven by HSBC’s gains (NYSE:HSBC), while investors closely monitor inflation data in Spain and Germany.
US stock markets closed sharply lower in Friday’s session as the situation in the war in the Middle East worsened, with Israel intensifying its operations in Gaza. The Dow Jones fell 366.71 points or 1.12% to 32,417.59 and the S&P 500 fell 19.86 points or 0.48% to 4,117.37 points. The S&P 500 confirmed a 10.0% drop from its peak in July and is heading for the third consecutive month in the red. The Nasdaq Composite closed up 47.41 points or 0.38% at 12,643.01, recovering from its lowest closing level in five months.
With regard to commodities, the highlight was oil, which rose again due to the increase in tensions in Gaza and the losses recorded at the beginning of the week. In the economic calendar, a consumer price index slightly above expectations did not have a major impact on the markets, mainly because there was a downward revision of September’s data and the core numbers were in line with expectations. Data on short-term inflation expectations, released alongside the University of Michigan consumer confidence index, rose from 3.8% to 4.2%.
On Monday’s corporate earnings front, investors will be watching reports from SoFi Technologies (NASDAQ:SOFI), McDonald’s (NYSE:MCD), Western Digital (NASDAQ:WDC), HSBC (NYSE:HSBC), Checkpoint (NASDAQ:CHKP), before the market opens. After the closing, reports from Arista (NYSE:ANET), Pinterest (NYSE:PINS), VF Corp (NYSE:VFC), Public Storage (NYSE:PSA), among others, will be awaited.
Wall Street Corporate Highlights for Today
Alphabet (NASDAQ:GOOGL) – Google, a subsidiary of Alphabet, plans to invest up to $2 billion in the artificial intelligence company Anthropic. This follows Amazon.com’s (NASDAQ:AMZN) announcement in September of an investment of up to $4 billion in Anthropic, a competitor of OpenAI, the creator of ChatGPT.
Apple (NASDAQ:AAPL), Goldman Sachs (NYSE:GS) – The partnership between Apple and Goldman Sachs, which produced the Apple Card and a savings account, is facing financial challenges, costing Goldman more than $1 billion over three years. Apple seeks financial self-sufficiency with Project Breakout, challenging traditional financial institutions. Regulatory resistance and technical obstacles may be challenges, but digital transformation indicates an inevitable shift toward a technology-driven financial sector. Additionally, Apple plans to capitalize on the resurgence of the computer market with the launch of a new iMac and updates to the MacBook Pro. The models are expected to benefit from the PC sector’s recovery following demand during the pandemic.
HSBC (NYSE:HSBC) – HSBC announced a $3 billion share buyback and reported a third-quarter profit that more than doubled but fell short of expectations due to rising costs related to salaries and technology. The bank reported a pre-tax profit of $7.7 billion in the quarter, up from $3.2 billion a year earlier, but the result lagged behind the average estimate of $8.1 billion compiled by HSBC. The bank plans to increase costs by up to 5% this year, excluding acquisitions, and offer a provisional dividend of 10 cents per share, raising the annual payout to 30 cents per share. A $500 million impairment related to the commercial real estate sector in China was highlighted, but the worst is believed to be over for the sector.
JPMorgan Chase (NYSE:JPM) – JPMorgan strategists recommended “short” positions in European banks and changed their outlook for the sector from “neutral” to “underweight” due to potential pressure on bond yields. Meanwhile, they upgraded the healthcare sector from ‘neutral’ to ‘overweight’ due to exposure to the dollar and low volatility.
Santander (NYSE:SAN) – Santander is planning to sell up to €5 billion in toxic real estate assets, including non-performing loans backed by mortgage guarantees. Spanish banks are repackaging loans to recover money due to economic slowdown and the pandemic.
UBS (NYSE:UBS) – The sign at the Credit Suisse headquarters in London, located at One Cabot Square in Canary Wharf, has been removed, indicating the relocation of employees to the UBS Group AG building. The transfer is part of the rescue agreement for Credit Suisse, with the goal of moving all employees by the end of the year.
Blackstone (NYSE:BX) – Blackstone will acquire a majority stake in India’s Care Hospitals, investing $1 billion and holding over 75% of the hospital network. Blackstone’s entry into the healthcare sector follows increased demand for private healthcare in India.
Blackrock (NYSE:BLK) – Investors are missing opportunities in the energy transition due to outdated views of the mining and metals industry, warns Evy Hambro, Global Head of Thematic and Sector Investing at BlackRock. He highlights the focus on emission reduction and financial discipline in the sector, pointing to underestimated opportunities amid the transition to a low-carbon economy. Hambro emphasizes that the story will unfold over the next 10 to 15 years, and companies should invest in decarbonization.
SoFi Technologies (NASDAQ:SOFI) – SoFi Technologies, a fintech that began as a student debt refinancer, is set to reveal its third-quarter results soon. Investors are particularly interested in its student loan business following the temporary payment suspension due to the pandemic.
Chevron (NYSE:CVX), Hess (NYSE:HES) – Chevron’s acquisition of Hess could slightly increase oil production in Bakken, North Dakota. However, a return to pre-pandemic peaks is not expected, as higher costs and distance from export terminals affect the region’s profitability. Chevron is likely to follow Hess’s plans for the region. Bakken oil production has declined from pre-pandemic peaks and faces challenges for a significant increase.
Ford Motor (NYSE:F) – The United Auto Workers approved a tentative agreement with Ford, increasing wages by 30% and eliminating old concessions. Ford will invest $8.1 billion in the industry and allow the replacement of older workers with new ones.
Stellantis (NYSE:STLA) – The Canadian union Unifor initiated strikes at all Stellantis facilities in Canada due to a lack of agreement in contract negotiations. They are seeking better wages, pensions, and support for the transition to electric vehicles. Stellantis expressed disappointment, and negotiations continue.
General Motors (NYSE:GM) – The United Auto Workers expanded the strike to include the GM factory in Spring Hill, Tennessee, disrupting pickup production. GM is the only Detroit automaker without an agreement. The strike could cost GM $400 million per week.
Toyota (NYSE:TM) – Toyota announced a 1.5% increase in global vehicle production in September, driven by demand in Japan, the U.S., and Europe. The Japanese automaker’s domestic production grew by 12.8%, offsetting the decline in overseas production.
Tesla (NASDAQ:TSLA), BYD (USOTC:BYDDY) – Chinese company BYD is closing in on Tesla as the largest global seller of electric vehicles, with rising stock prices and optimistic projections. Its profitability and strong sales set it apart, while Tesla faces challenges. BYD plans to expand globally while maintaining profitability.
Walt Disney (NYSE:DIS) – Activist investor Nelson Peltz, with the support of Isaac Perlmutter, former Marvel president, is intensifying pressure on Disney. Peltz seeks seats on the company’s board, with most of the ownership being Perlmutter’s shares. The nomination window for Disney’s board opens in December, suggesting a potential proxy battle.
Glencore (USOTC:GLNCY) – Glencore lowered its nickel production forecast due to maintenance and strikes but expects solid profits in the trading division. The company’s own nickel production fell by 16% for the year. Projections for copper, zinc, coal, and cobalt remain unchanged for 2023.
Intuitive Machines (NASDAQ:LUNR) – Intuitive Machines’ stock rose by 11.6% due to the scheduling of its lunar mission with SpaceX in January, a two-month delay from the previously planned date.
ArcelorMittal (NYSE:MTCN) – Steel company ArcelorMittal announced an agreement to transfer its operations in Kazakhstan to the government, following a fatal incident at a coal mine over the weekend.
Pearson (NYSE:PSO) – Pearson raised its adjusted operating profit projection to up to $24.3 million, driven by demand for assessments and qualifications. The CEO highlighted the continued momentum of the group, with positive feedback on its generative AI tools.
Coherus BioSciences (NASDAQ:CHRS) – Coherus BioSciences’ shares rose by 15.15% in pre-market trading on Monday after the FDA approved its treatment for nasopharyngeal cancer. This treatment is used in combination with chemotherapy and is manufactured in partnership with Shanghai Junshi Biosciences.