In Tuesday’s pre-market trading, U.S. index futures are showing positive performance. Investors worldwide are carefully analyzing quarterly earnings reports, as well as significant economic indicators from Europe. Concurrently, there is growing anticipation for the release of U.S. inflation data for October. It is estimated that these figures will indicate a slowing trend in inflation compared to the previous month’s data.
At 06:03 AM, Dow Jones futures (DOWI:DJI) rose 20 points, or 0.06%. S&P 500 futures climbed 0.08% and Nasdaq-100 futures increased by 0.18%. The yield on 10-year Treasury bonds was at 4.624%.
In the commodities market, West Texas Intermediate crude oil for December rose 0.26%, to $78.46 per barrel. Brent crude for January increased 0.21% to around $82.69 per barrel. Iron ore with a 62% concentration, traded on the Dalian exchange, rose 0.26%, priced at $132.19 per ton.
On the economic agenda this Tuesday, investors await the release of the October business sentiment index at 6 AM, while at 3:30 PM the API will release the weekly oil inventory data.
Some Fed members speak shortly after the country’s inflation data is released. At 10 AM, Fed Vice Chairman for Supervision Michael Barr will speak, followed by Loretta Mester, President of the Cleveland Fed, at 11 AM, and the President of the Chicago Fed, Austan Goolsbee, at 12:45 PM.
The major focus is the release of the October CPI at 08:30 AM, where economists expect a 0.10% increase from the previous month, a significant slowdown from the 0.40% increase in September. It is important to note, however, that inflation may get a slight boost in October, as the U.S. government will change the way it estimates health insurance costs. In addition to a change in data sources, the new methodology aims to smooth out some of the volatility and reduce the time lag in the index.
Tomorrow, the meeting between Joe Biden and Xi Jinping takes place during the Proclamation of the Republic holiday, drawing global attention. Asian markets close mixed, awaiting American inflation and the U.S.-China meeting. In China, problematic public-private partnership projects are suspended. In Europe, the focus is on the UK’s unemployment rates and deflation in the eurozone, while Germany shows an increase in the economic sentiment index.
U.S. stocks had a weak performance on Monday, with the Dow Jones slightly rising and the S&P 500 and NASDAQ falling. Moody’s downgraded the U.S. credit outlook, impacting the market. The sell-off was mitigated by a report from the New York Fed showing a decrease in inflation expectations. Sectors varied, with notable declines in utilities and semiconductors, and a rise in tobacco stocks.
For corporate earnings front on Tuesday, investors will be watching reports from Home Depot (NYSE:HD), Paysafe (NYSE:PSFE), Canadian Solar (NASDAQ:CSIQ), Aramark (NYSE:ARMK), Sea Limited (NYSE:SE), before the market opens. After closing, reports from QuickLogic (NASDAQ:QUIK), Canoo (NASDAQ:GOEV), AST SpaceMobile (NASDAQ:ASTS), Pioneer Power Solutions (NASDAQ:PPSI), among others, are expected.
Wall Street Corporate Highlights for Today
Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL) – During an antitrust trial in Washington, it was revealed that Google passes 36% of its Safari browser ad earnings to Apple. The deal between the tech giants is kept secret but is now under scrutiny by the U.S. Department of Justice for possibly unlawfully maintaining Google’s dominant position.
Foxconn (USOTC:FXCOF) – Foxconn, a supplier to Apple (NASDAQ:AAPL), surprised with an 11% increase in third-quarter profit, driven by smartphone demand ahead of the holiday season. Although it forecasts slight declines in fourth-quarter and full-year revenues, Foxconn expects a gradual improvement in operations.
Nvidia (NASDAQ:NVDA) – Nvidia will launch the H200 AI chip with more high-bandwidth memory in partnership with Amazon (NASDAQ:AMZN), Google (NASDAQ:GOOGL), and Oracle (NYSE:ORCL) next year. The upgrade will enable faster responses in AI services. Major cloud providers will also offer access to the H200. Nvidia’s shares are on the longest winning streak since December 27, 2016, when it rose for 10 consecutive trading days, according to Dow Jones Market Data.
Amazon (NASDAQ:AMZN), Snap Inc (NYSE:SNAP) – Amazon will allow U.S. Snapchat users to buy products directly from the app, in a deal similar to that with Meta Platforms (NASDAQ:META). Customers will be able to purchase Amazon ads on Snapchat and see real-time product information. This expands Amazon’s product offering on social media apps and benefits Snapchat, which has seen growth in revenue and users. In other news, Amazon cut about 180 jobs in its gaming division as part of a restructuring, marking the second round of layoffs in a week. The company said it is focusing on areas of higher growth.
Walmart (NYSE:WMT), Target (NYSE:TGT) – Walmart and Target’s earnings will reveal consumer spending trends ahead of Black Friday. While food inflation slows, credit card debt and high interest rates create uncertainties about year-end purchases. Walmart’s choice not to hire temporary workers may signal expectations of lower shopper traffic.
Starbucks (NASDAQ:SBUX) – The Workers United union reported that thousands of Starbucks store employees will attend the Red Cup Day event due to staffing issues. The union called for a walkout on November 16, citing challenges faced by baristas on Red Cup Day. Starbucks responded by criticizing the union for lack of progress in contractual negotiations.
Stellantis (NYSE:STLA) – Stellantis is offering voluntary separation packages to about half of its 12,700 administrative employees with over five years of employment, as part of its efforts to reduce costs and adapt to changes in the automotive industry, including the transition to electric vehicles. This is the second round of voluntary buyouts offered by the company this year.
Tesla (NASDAQ:TSLA) – Tesla plans to increase imports of components from India, according to Indian Trade Minister Piyush Goyal. The company aimed to purchase between $1.7 billion and $1.9 billion in Indian components this year, after $1 billion in purchases last year. In other news, Tesla surprised with a clause in its Cybertruck terms of service, prohibiting owners from selling it in the first 12 months after delivery. Tesla would have priority in repurchasing, and sellers need written approval.
Rivian (NASDAQ:RIVN) – Rivian plans to raise almost $15 billion in debt to build an electric vehicle factory in Georgia. The factory will employ over 7,500 people and produce 400,000 vehicles per year.
United Airlines (NASDAQ:UAL) – United Airlines canceled the resumption of flights from Newark, New Jersey, to Tel Aviv, Israel, on November 24, stating that a previous announcement about the return of flights was an error by its public relations agency.
Boeing (NYSE:BA) – Boeing will expand production capacity at its Huntsville factory for sensors used in Patriot missiles, meeting growing global demand for air and missile defense. The facility, operational in 2027, will increase annual production by over 30%.
Goldman Sachs (NYSE:GS) – Goldman Sachs strategists predict that European stocks will rise next year, driven by increased household purchasing power and cooling inflation. They see the Stoxx Europe 600 index reaching 480 points in 12 months, a 7% increase.
Berkshire Hathaway (NYSE:BRK.A) – Berkshire Hathaway’s stock holdings disclosure may reveal that more General Motors (NYSE:GM) shares were sold in the third quarter, a disappointing investment. Berkshire also bought about $1 billion in financial stocks during the period. So far in 2022, Berkshire has sold about $23 billion in stocks and bought $49 billion. Its largest holdings remained unchanged, but GM continues to be a challenge. The 13-F report should reveal additional details.
Fidelity National Financial (NYSE:FNF) – Fidelity launched six new ETFs and significantly reduced management fees for about a third of its existing ETF line. In 2023, 419 ETFs have been launched so far, approaching the record of 475 in 2021. Fidelity offers fees between 18 and 28 basis points, below the average of 63 basis points for actively managed ETFs.
Robinhood Markets (NASDAQ:HOOD) – Alphabet (NASDAQ:GOOGL), the parent company of Google, dissolved its stake in Robinhood Markets, after a significant reduction in its stake months ago. Alphabet had invested in Robinhood when it was a financial startup. However, uncertain economic conditions have hurt Robinhood, resulting in performance below Wall Street’s expectations in the third quarter.
Bain Capital (NYSE:BCSF) – Bain Capital is exploring a sale or IPO of Varsity Brands, valued at over $6 billion. Varsity Brands generates more than $400 million in earnings before interest, taxes, depreciation, and amortization over the last 12 months.
Teck Resources (NYSE:TECK), Glencore (USOTC:GLNCY) – Glencore acquired 77% of Teck Resources’ metallurgical coal business, Elk Valley Resources, for $6.93 billion. The transaction is expected to be completed in the third quarter of 2024, following discussions about a possible merger.
Fox Corp (NASDAQ:FOX) – Jason Donner, a former Fox News reporter, filed a lawsuit claiming he was targeted and fired for resisting false allegations about the U.S. Capitol riot on January 6, 2021. He seeks compensation for political discrimination.
Vodafone Group (NASDAQ:VOD) – Vodafone reported second-quarter sales growth that exceeded analysts’ estimates, driven by an unexpected increase in service revenues in Germany following price hikes. CEO Margherita Della Valle also implemented job cuts and conducted strategic deals to boost the company.
Tripadvisor (NASDAQ:TRIP), Booking Holdings (NASDAQ:BKNG) – Analyst Richard Clarke of Bernstein expressed optimism about the travel sector, upgrading his ratings for Tripadvisor and Booking Holdings. He upgraded Booking’s rating from “Underperform” to “Market Perform” and raised the target price from $2,600 to $2,940, citing a positive outlook driven by strong travel demand. Clarke also upgraded his rating for Tripadvisor from “Market Perform” to “Outperform” and raised the target price from $14.80 to $21.40, based on solid third-quarter results and the company’s ability to diversify its revenue sources.
Coty (NYSE:COTY) – Coty expanded its share repurchase program by $600 million, totaling $1 billion. This supports the reduction of diluted shares to 800 million by 2026. The company anticipates strong free cash flow generation and stability in deleveraging.
WeWork (USOTC:WEWKQ) – WeWork, after filing for bankruptcy protection, announced that Ernst & Young will no longer continue as its accounting firm and will no longer audit the company. There were no disputes between the parties, and the New York Stock Exchange initiated the process of delisting WeWork, whose shares are now traded over-the-counter under the symbol “WEWKQ” since November 8.
AstraZeneca (NASDAQ:AZN) – AstraZeneca entered the competition for a weight loss pill. Despite being late to the game, CEO Pascal Soriot sees an opportunity in serving overweight adults seeking moderate weight loss.
Johnson Controls International (NYSE:JCI) – Johnson Controls announced that the delay in releasing its fourth-quarter results is due to a cyberattack that impacted its financial data systems. The company plans to release the results by December 14, with further details to be provided later.
Fisker (NYSE:FSR) – The electric vehicle startup Fisker reported a loss in the third quarter, delivering about 1,100 electric Ocean SUVs. Deliveries accelerated in October, however, shares are down more than 13% in Tuesday’s pre-market trading. The company produced 4,725 Oceans and expects to deliver 300 per day by the end of 2023. The net loss was $91 million, and revenue was $71.8 million. The company has $625 million in cash and did not update its full-year production outlook.
Home Depot (NYSE:HD) – Home Depot exceeded Wall Street’s expectations with a 3% decrease in quarterly sales, focusing on smaller home repairs. Lowering its annual forecasts, Home Depot anticipates a 3-4% decline in sales and a 9-11% drop in earnings per share. The company faces challenges with high mortgage rates and inflation, leading to a trend of more modest projects. In the third quarter, the company reported earnings of $3.81 per share on revenue of $37.71 billion, while analysts had estimated earnings of $3.76 per share on revenue of $37.6 billion.