U.S. index futures are mixed in Thursday’s pre-market trading, following a three-day losing streak for the S&P 500 and the Dow Jones.
At 05:17 AM, Dow Jones futures (DOWI:DJI) fell 80 points, or 0.22%. S&P 500 futures dropped 0.04%, while Nasdaq-100 futures rose 0.18%. The yield on 10-year Treasury bonds was at 4.146%.
In the commodities market, West Texas Intermediate crude for January rose 1.30% to $70.28 per barrel. Brent crude for February increased 1.31%, near $75.27 per barrel. Iron ore with a 62% concentration, traded on the Dalian exchange, rose 3.93% to $134.12 per ton.
On Thursday’s economic agenda, investors are following the 08:30 AM release of unemployment claims for the week ending December 2. At 10:00 AM, the Department of Commerce will release wholesale inventories for October. At 3:00 PM, consumer credit data for October will be announced.
European markets are performing negatively, reversing the previous day’s gains. This is happening as investors assess recent economic data. They are analyzing the Eurozone’s third-quarter Gross Domestic Product (GDP) figures, along with employment data for the same period in the euro area. Additionally, Germany’s October industrial production data is also set to be released soon.
Asian stock markets mostly closed lower. Tokyo was a notable drop, nearly 2%, while Shanghai showed a slight decrease of 0.09%, suggesting some stability. Modest Chinese trade balance data influenced the market, with automaker stocks contributing to the decline. The Shenzhen Stock Exchange also recorded a small drop. Other significant indices in the region, like Hong Kong’s Hang Seng, South Korea’s Kospi, and Australia’s ASX 200, also closed lower, though the declines were less pronounced.
On Wednesday, the major stock market indices in the United States experienced a slight decline. The Dow Jones fell by 0.19%. The S&P 500 decreased by 0.39%, and the Nasdaq saw a decline of 0.58%. In the Treasuries sector, there was an uptick in value after the ADP employment report indicated job growth below expectations, with 103 thousand new jobs in November compared to the forecasted 130 thousand, and a revision of the previous number from 113 thousand to 106 thousand. Additionally, labor productivity data exceeded expectations, while labor costs fell more than anticipated.
In terms of corporate earnings on Thursday, investors will be paying attention to reports from Dollar General (NYSE:DG), Ciena (NYSE:CIEN), Broadcom (NASDAQ:AVGO), Lululemon (NASDAQ:LULU), DocuSign (NASDAQ:DOCU), RH (NYSE:RH), and others.
Corporate Highlights from Wall Street Today
Alphabet (NASDAQ:GOOGL), Apple (NASDAQ:AAPL) – U.S. Senator Ron Wyden raises concerns about unidentified governments monitoring smartphones through Google and Apple push notifications, calls for transparency and policy review. The companies agree to cooperate.
Apple (NASDAQ:AAPL) – Steve Hotelling, Apple’s senior executive responsible for touch screen technology, health sensors, and facial recognition, is retiring. His responsibilities will be divided among several subordinates. His departure comes at a crucial time for Apple’s hardware technology group, which is seeking to replace vital components with in-house technology and faces challenges in future projects.
Alphabet (NASDAQ:GOOGL) – Alphabet has introduced the advanced artificial intelligence model Gemini, which processes multimedia information such as video, audio, and text with greater nuance. Gemini will be integrated into the AI assistant Bard and launched next year. The company has also announced more powerful custom AI chips, Cloud TPU v5p, for fast language model training.
Microsoft (NASDAQ:MSFT) – U.S. antitrust authorities are challenging the decision that deemed Microsoft’s $69 billion acquisition of “Call of Duty” maker Activision Blizzard legal. They allege that Microsoft has an incentive to restrict gaming on competitors. The FTC faces challenges after losing the case in the first instance and receiving approval from the EU and the UK.
Meta Platforms (NASDAQ:META) – Meta Platforms plans to add an invisible watermark to its text-to-image generation product in its Meta AI chatbot. This aims to increase transparency and prevent image manipulation. The company is exploring various ways to use generative AI in its platforms, including Instagram and WhatsApp. Additionally, Meta is implementing end-to-end encryption as the standard in its Messenger and Facebook apps for messages and calls, promoting greater security and privacy. The change is likely to extend to Instagram next year, but it raises concerns about privacy protection from law enforcement agencies.
C3.ai (NYSE:AI) – C3.ai, a manufacturer of artificial intelligence software, reported revenue of $73.2 million in the last quarter, below expectations. The company recorded a net loss of $69.8 million and plans a consumption-based pricing model. Its shares fell 10.3% in pre-market trading on Thursday.
Walmart (NYSE:WMT) – Walmart executives have expressed concerns that consumer behavior in the coming year may be more difficult to predict due to financial difficulties leading customers to be more cautious with their spending. Although they have observed recent anomalous behavior, they do not plan to make drastic changes to their long-term strategy.
AMD (NASDAQ:AMD) – AMD estimates that the market for its AI processors for data centers in 2023 is $45 billion, surpassing its previous estimate of $30 billion. The company has launched new AI chips and foresees significant growth in the AI data center market by 2027.
Tesla (NASDAQ:TSLA) – The Danish pension fund, PensionDanmark, sold its shares in Tesla due to the company’s refusal to negotiate with unions, part of a Nordic movement to pressure Tesla to accept collective labor agreements. Additionally, the largest Norwegian private sector union announced plans to block shipments of Tesla cars to Sweden in support of striking Swedish mechanics seeking collective agreements. Other Nordic unions have also joined in, challenging Tesla’s policy of not negotiating collectively. The actions will begin on December 20th.
Ford Motor (NYSE:F) – Ford has stated that it is unlikely that currently available Mustang Mach-E electric vehicles at dealerships will qualify for federal tax credits starting in January, due to new battery supply chain restrictions imposed by the U.S. Treasury. The Mach-E model currently qualifies for a federal tax credit of $3,750.
Nikola (NASDAQ:NKLA) – Nikola shares plunged 15.4% in pre-market trading on Thursday as the company announced plans to raise $100 million in stock and $200 million in convertible notes due in 2026 in two separate public offerings. The company intends to use the funds for general corporate purposes and investments in projects.
Nio (NYSE:NIO) – Chinese electric vehicle manufacturer Nio Inc. is considering additional job cuts, possibly expanding the previously announced 10%. The cuts target non-essential and slow-return areas. The decision comes amid growing competition and weakened demand for electric vehicles in China.
ChargePoint (NYSE:CHPT) – ChargePoint, the largest electric vehicle charging network in the U.S., experienced a sharp drop in revenue in the third quarter due to a strike at automakers and delays in electric vehicle deliveries, leading to a management team change. Revenue declined 12% to $110.3 million, with new CEO Rick Wilmer attributing the challenges to the strike and company execution.
Duke Energy (NYSE:DUK) – Chinese battery giant CATL has rejected claims by Duke Energy in the U.S. that its batteries pose a security threat. CATL stated that its products in the U.S. do not collect, sell, or share data and have undergone rigorous security assessments. Duke Energy disconnected the batteries due to safety concerns.
Chevron (NYSE:CVX) – Chevron plans to spend between $18.5 billion and $19.5 billion on new oil and gas projects next year, reflecting the ongoing recovery of the sector. Its budget for 2024, along with Exxon Mobil‘s (NYSE:XOM), reflects the pandemic’s impact, recent acquisitions, and carbon reduction initiatives. Chevron also plans to increase share buybacks following the deal with Hess (NYSE:HES).
Citigroup (NYSE:C) – Citigroup’s largest restructuring in decades will cost approximately $1 billion in charges, involving layoffs and management reduction. The overhaul aims to simplify the structure, reduce expenses, and achieve profit goals. The bank maintains its 2023 expense estimate at $54 billion. CEO Jane Fraser seeks to transform the bank, driven by commercial revenue and investment fees.
Barclays (NYSE:BCS) – Barclays Plc is supporting a UK charity associated with Russian billionaire Vladimir Potanin after JPMorgan Chase & Co. (NYSE:JPM) severed ties with the fund last year. Barclays received authorization from the UK sanctions watchdog to provide banking services to the Potanin Foundation. This decision reflects banks’ caution regarding sanctions compliance. Potanin, sanctioned by the UK and the U.S., has amassed a fortune of approximately $30 billion as the founder of MMC Norilsk Nickel PJSC.
Moody’s (NYSE:MCO) – Moody’s has downgraded the outlook for Hong Kong, Macau, and several Chinese state-owned enterprises and banks, citing close ties and erosion of Hong Kong’s autonomy due to the National Security Law. The weakening Chinese economy is also a factor.
Robinhood (NASDAQ:HOOD) – Robinhood has launched commission-free cryptocurrency trading in the European Union, allowing investors to buy and sell over 25 cryptocurrencies, including Bitcoin, Ether, and Solana. Customers will receive a percentage of their trading volume in Bitcoin as a reward. This follows Robinhood’s announcement of international expansion into the UK.
Blackstone’s Mortgage Trust (NYSE:BXMT) – Blackstone’s Mortgage Trust shares fell 1.4% in pre-market trading on Thursday, extending a sharp decline on Wednesday, after hedge fund Muddy Waters took a short position, alleging oversupply issues, underfunded loans, and expired leases. Blackstone countered the report, stating that its liquidity was strong and they were well-positioned.
AbbVie (NYSE:ABBV) – AbbVie is nearing an agreement of approximately $8.7 billion to acquire Cerevel Therapeutics (NASDAQ:CERE), focused on neurological disease medications such as Parkinson’s. AbbVie is looking to invest in promising drugs following previous deals. The agreement may be announced soon. Trading of Cerevel Therapeutics Holdings Inc options experienced a notable increase alongside the rise in shares in the days leading up to its acquisition announcement by AbbVie. This suspicious surge in options activity raised concerns about insider trading.
Bristol Myers Squibb (NYSE:BMY) – Bristol Myers Squibb announced a quarterly dividend of 60 cents per share, a 5.3% increase from the previous year, marking the 15th consecutive year of dividend increases. Payment will be made on February 1st to shareholders of record on January 5th.
McDonald’s (NYSE:MCD) – McDonald’s plans to open approximately 10,000 restaurants worldwide by 2027, increase loyalty program sales to $45 billion, and attract 250 million users by 2027. Global expansion would raise the total number of stores to approximately 50,000 by 2027.
Yum Brands (NYSE:YUM) – KFC, a Yum Brands subsidiary, announced the acquisition of 218 restaurants from its major franchisee, EG Group, in the UK and Ireland. The deal will be completed in the first half of 2024, with financial details undisclosed.
Comcast (NASDAQ:CMCSA) – Comcast is raising Xfinity program fees to offset rising programming costs. Subscribers can expect an average price increase of 3%, with a $3 per month increase in internet-only service. This follows an unexpected decline in broadband subscribers in the third quarter.
GameStop (NYSE:GME) – GameStop fell short of quarterly revenue estimates due to increasing competition and reduced consumer spending amid an uncertain economy. GameStop reported revenue of $1.08 billion in the third quarter, below estimates of $1.18 billion. This comes as the gaming industry faces challenges from persistent inflation and high borrowing costs.
Chewy (NYSE:CHWY) – Chewy shares dropped 10% in pre-market trading on Thursday after providing a disappointing outlook for the next quarter and lowering its full-year expectations. Third-quarter revenue was $2.74 billion, but the company projected lower sales in the next quarter, reflecting ongoing macroeconomic pressures in the sector. Chewy has named David Reeder as its new CFO.
SpaceX – SpaceX has initiated discussions to sell preferred shares, targeting a valuation of over $175 billion. The public offering could range between $500 million and $750 million, with shares priced at approximately $95 each. The current valuation is a premium compared to the $150 billion raised in a previous offering. SpaceX is a leader in the commercial space launch market and operates the Starlink internet service. Its projected revenues for 2024 are around $15 billion.