U.S. index futures are showing an increase in the pre-market on Thursday, following the Dow Jones closing at a historic high the day before due to indications from the Federal Reserve of several rate cuts in 2024.
At 05:30 AM, the Dow Jones futures (DOWI:DJI) rose 85 points, or 0.23%. S&P 500 futures were up 0.29%, and Nasdaq-100 futures were up 0.41%. The yield on 10-year Treasury bonds was at 3.947%.
In the commodities market, West Texas Intermediate crude oil for January rose 2.02% to $70.86 per barrel. Brent crude for February increased by 2.10%, close to $75.82 per barrel. Iron ore with a concentration of 62%, traded on the Dalian exchange, fell 1.05% to $133.18 per ton.
On Thursday’s economic agenda, investors are awaiting, at 08:30 AM, the unemployment insurance claims for the week ended last Saturday and the import and export prices for November.
European markets are up, motivated by the expectation that the Federal Reserve will reduce interest rates next year. Attention is now turning to the imminent decisions of the European Central Bank (ECB) and the Bank of England (BoE) on their respective interest rates, currently expected to remain at 4.50% and 5.25%. ECB President Christine Lagarde will hold an interview after the ECB’s decision announcement.
Asian stock markets showed a mixed response to the recent global excitement driven by the Fed. While the Shanghai (-0.33%) and Tokyo stock exchanges recorded losses, due to persistent pessimism about the Chinese economy post-economic conference, Seoul stood out with an increase of over 1%. While Japan’s Nikkei index fell 0.73%, Hong Kong’s Hang Seng rose 1.07%, South Korea’s Kospi increased by 1.34%, and Australia’s ASX 200 grew by 1.65%.
At the close on Wednesday, U.S. stocks were performing weakly before jumping with the Fed announcement. The Dow reached a record high, above 37,000 points, while the S&P 500 and Nasdaq also rose. The Fed maintained interest rates, planning to cut them next year to support employment and inflation. Gold and biotechnology stood out, with Acadia Pharmaceuticals (NASDAQ:ACAD) leading the sector after a patent lawsuit victory. Other sectors, such as banking, commercial real estate, and utilities, also performed well. Most major sectors showed strength, including airlines, housing, and network technology.
In the upcoming corporate earnings on Wednesday, investors will be paying attention to the reports from Jabil (NYSE:JBL), Knot (NYSE:KNOP), Live Ventures Incorporated (NASDAQ:LIVE), Moolec (NASDAQ:MLEC), before market open. After the close, the reports from Costco Wholesale (NASDAQ:COST), Lennar (NYSE:LEN), Scholastic (NASDAQ:SCHL), Mesa Air Group (NASDAQ:MESA), among others, will be observed.
Wall Street corporate highlights for today
Apple (NASDAQ:AAPL) – Apple’s shares closed at a record $197.96 per share on Wednesday, up 1.7% in response to the prospect of lower Federal Reserve interest rates in 2024. Apple now has a market capitalization of $3.08 trillion.
Spotify (NYSE:SPOT) – Apple (NASDAQ:AAPL) faces a potential ban and fine from the European Union due to App Store rules that affect music streaming services, with the EU considering preventing Apple from blocking music services from directing users to subscription options outside the App Store and fining it up to 10% of annual sales. The investigation began after a complaint from Spotify about higher prices due to App Store rules, with the European Commission claiming that Apple imposed unnecessary conditions that could result in additional costs for customers.
Alphabet (NASDAQ:GOOGL) – Alphabet, owner of Google, launched its advanced artificial intelligence model, Gemini, for developers, significantly reducing costs. The cost of Gemini has been reduced to between half and a quarter of the June costs, the company said on Wednesday. Gemini offers greater information processing capacity and tools for customization.
Meta Platforms (NASDAQ:META) – Major U.S. companies like Walt Disney (NYSE:DIS) and Comcast (NASDAQ:CMCSA) have increased advertising spending on Instagram after suspending ads on Elon Musk’s platform due to antisemitic content. Disney and Comcast raised their spending on Meta by 40% and about 6%, respectively, in the last two weeks of November.
Amazon (NASDAQ:AMZN) – Amazon.com Inc. won a $272 million lawsuit over alleged illegal tax exemptions in the European Union. The EU Court of Justice rejected the European Commission’s appeal, stating that the tax deal between Amazon and Luxembourg did not constitute incompatible state aid with the internal market.
Adobe (NASDAQ:ADBE) – Adobe, facing regulatory investigation related to subscription models, forecast revenues below estimates, resulting in a more than 5% drop in shares in Thursday’s pre-market. Furthermore, the FTC is examining subscription disclosure and cancellation practices, while the acquisition of Figma is being investigated by competition regulators. In the fourth quarter, the company reported adjusted earnings of $4.27 per share, compared to estimates of $4.14. Revenue was slightly above estimates.
Etsy (NASDAQ:ETSY) – Etsy saw its shares plummet on Wednesday due to the announcement of layoffs of 225 employees (11% of the workforce) to reduce costs due to weakened demand for handmade products. The company will face charges of $25-30 million and expects a decline in gross sales in the fourth quarter.
Mattel (NASDAQ:MAT), Paramount Pictures (NASDAQ:PARA) – Mattel, Paramount Pictures, and Temple Hill Entertainment plan to develop a live-action film based on American Girl, following the success of “Barbie.” American Girl’s revenue decreased by 13% in the third quarter. The film does not yet have a release date. Writer Lindsey Anderson Beer is in charge of the script and production.
Starbucks (NASDAQ:SBUX) – Starbucks did not engage in anti-union practices during contractual negotiations with the U.S. employees’ union, according to a third-party investigation. While the inquiry recommended improvements in the approach to unionization, it found no interference in employees’ freedom to unionize. The Starbucks Workers United union acknowledged issues and is willing to dialogue. Starbucks plans to resume discussions with representative stores in January.
Cal-Maine Foods (NASDAQ:CALM) – A Stephens analyst increased Cal-Maine’s price target to $50 due to the outlook for stronger egg prices, despite an outbreak of avian flu. The company is expected to benefit from reduced supply and lower grain prices.
Tesla (NASDAQ:TSLA) – Tesla is conducting a recall of over 2 million vehicles in the U.S. due to safety concerns with the Autopilot system. The NHTSA investigated driver inattention and Tesla will deploy software updates. Furthermore, Tesla has shortened the estimated waiting period for the delivery of its Model 3 and Model Y in China from six to nine weeks to just two to six weeks, as announced on its Chinese website on Thursday. Elsewhere, the Indian government is not planning to reduce taxes on imported electric vehicles, which could be a blow to Tesla’s plans to enter the market. Negotiations between Tesla and India face obstacles related to local production and tax incentives.
Lucid (NASDAQ:LCID) – Lucid Group has already assembled nearly 800 cars at its factory in Saudi Arabia, focusing on training over 200 local employees. The Saudi government has committed to buying up to 100,000 Lucid vehicles over 10 years. The Public Investment Fund of Saudi Arabia, which holds more than 60% of Lucid, invested billions in the company as part of the government’s plans to establish a hub for the electric vehicle industry. Lucid plans to open a full construction unit in 2026.
General Motors (NYSE:GM) – General Motors’ Cruise Robotaxi unit has fired nine executives, including Chief Operations Officer Gil West, amid a safety investigation following an accident in San Francisco. The dismissals aim to restore confidence and accountability in the company. In other news, Mary Barra, CEO of General Motors, reaffirmed the company’s commitment to becoming exclusively an electric vehicle (EV) manufacturer by 2035. Despite recent production delays, Barra emphasized the importance of regulation aligned with customer needs.
Nordson (NASDAQ:NDSN) – The industrial automation company reported adjusted earnings above expectations for the fourth fiscal quarter and projected a revenue increase in the first quarter. The company expects sales between $615 million and $640 million for the first quarter, surpassing last year’s $610.5 million, though below analysts’ expectations of $651.9 million.
BP (NYSE:BP) – BP has reduced former CEO Bernard Looney’s compensation by over $40 million due to misconduct for not disclosing personal relationships with colleagues. This included the forfeiture of unvested stock awards and a reimbursement of part of his 2022 cash bonus. Additionally, JPMorgan downgraded BP to Underweight from Neutral and lowered its target price by 11% to 550 pence. Analysts cited BP’s growing dependence on wider standard deviation variables and concerns about future cash returns. They suggested greater clarity in renewable energies under a new CEO.
Occidental Petroleum (NYSE:OXY) – Occidental Petroleum plans to pay off debts from the acquisition of CrownRock to reduce financial burdens a year after closing. Credit rating agencies consider the risks more manageable compared to the Anadarko acquisition in 2019.
Berkshire Hathaway (NYSE:BRK.B) – Berkshire Hathaway acquired about 10.5 million shares of Occidental Petroleum (NYSE:OXY) for approximately $588.7 million this week, raising its stake in Occidental to about 27%. The company also holds warrants to acquire an additional 83.8 million Occidental shares. If exercised, Berkshire’s total stake would be 33%.
Nasdaq (NASDAQ:NDAQ) – Nasdaq resolved a system issue that affected stock orders and more than 50 clients. The incident began due to a duplicated internal order ID in the “FIX/RASH” management system. Nasdaq temporarily shut down the system, blocked new orders, and cancelled open orders. The exchange operator stated that the issue was resolved and that it was ready for future trading.
Coinbase (NASDAQ:COIN) – Coinbase will expand spot cryptocurrency trading services on its international exchange, starting with Bitcoin (COIN:BTCUSD) and Ether (COIN:ETHUSD) on December 14 for institutional clients. This expansion aims to assess demand and may benefit the company in the long term.
Merrill Lynch (NYSE:PYT) – Merrill Lynch faces a breach of contract lawsuit filed by an investor alleging that the firm offered very low interest rates on client retirement money sweep accounts. The lawsuit seeks class action certification and an injunction against the firm, as well as damages and interest.
Goldman Sachs (NYSE:GS) – Goldman Sachs’ global head of digital assets, Mathew McDermott, anticipates a significant increase in blockchain-based asset trading volumes in the next one or two years, with growing interest in cryptographic derivatives. The bank is exploring issuing blockchain-based tokens for traditional assets like bonds, aiming for operational efficiency and risk reduction in financial markets.
Citigroup (NYSE:C) – Citigroup plans to pay partial bonuses to laid-off employees based on the duration of their service in 2023, as part of its ongoing restructuring, to be completed in March. Citigroup will not offer bonuses for voluntary resignations.
UBS (NYSE:UBS) – UBS Group AG is intensifying recovery of restricted cash bonuses, paid by Credit Suisse to retain traders before its collapse. UBS is offering multi-year plans to hundreds of bankers aiming to recover part of the 1.2 billion Swiss francs ($1.38 billion), with the desired amount being less than 651 million Swiss francs.
Pfizer (NYSE:PFE) – Pfizer revised down its sales forecast for 2024, anticipating vaccine and Covid-19 treatment revenue of $8 billion, below the expected $13 billion. This resulted in a stock drop on Wednesday and concerns about its R&D strategy. JPMorgan analysts lowered the stock’s target price from $34 to $30 and maintained a Neutral rating. BofA analysts reduced their target price from $38 to $35 and also remained neutral on the stock.
Vir Biotechnology (NASDAQ:VIR) – Vir Biotechnology announced it will cut 12% of its staff, about 75 jobs, and close two research facilities next year. These actions aim to save at least $40 million annually and align the company with sustainable growth goals. CEO Marianne De Backer emphasized the importance of these changes for the company’s future.
Johnson & Johnson (NYSE:JNJ) – Concerns about the U.S. exclusivity loss of the drug Stelara in 2025 led a Wells Fargo analyst to downgrade the stock and lower J&J’s target price, suggesting that the company’s profit growth could be affected. Stelara is a high-revenue medication for J&J used to treat conditions like psoriasis and psoriatic arthritis.