Today's stock market is seeing mixed movements ahead of the Federal Reserve's decision on interest rates at 2:00 PM ET. Here's a simple breakdown:
- The S&P 500 futures are stable, showing no significant change.
- Nasdaq 100 futures are up by 50 points, a 0.2% increase.
- Dow Jones Industrial Average futures have dropped slightly by 20 points, a 0.1% decrease.
Everyone's eyes are on the Fed today, expecting interest rates to stay between 5.25-5.50%. There's a lot of anticipation about the Fed's rate-cut projections and what Fed Chair Powell will say during his press conference. This is especially true since some Fed officials want more proof that inflation is cooling down before they consider lowering rates, but recent data suggests inflation is still hotter than expected.
Treasury yields are pretty much unchanged as we wait for the Fed's announcement. Specifically, the 10-year note yield has decreased slightly by one basis point to 4.29%, and the 2-year note yield is steady at 4.69%.
In company news:
- Pinduoduo (PDD) shares are up by 13.5% after reporting earnings and revenue that beat expectations.
- General Mills (GIS, Financial) also saw a share price increase of 3.1% after beating earnings expectations and reaffirming its guidance for the year.
- Signet Jewelers (SIG, Financial) shares are down by 7.3%, despite beating earnings expectations, due to lower than expected revenue and future guidance.
- BioNTech (BNTX, Financial) shares dropped by 4.8% after missing earnings and revenue forecasts and giving a weaker revenue outlook.
- JPMorgan Chase (JPM, Financial) slightly increased by 0.01% after announcing a dividend increase.
- Altria (MO, Financial) shares are up by 0.2% following a $2.4 billion share repurchase announcement.
- Boeing (BA, Financial) shares fell by 1.5% after receiving a Navy contract but also forecasting a cash flow deficit and reducing production rates.
- HealthEquity (HQY, Financial) shares rose by 4.2% after beating earnings and revenue estimates and providing guidance in line with expectations.
- Intel (INTC, Financial) saw a 3.7% increase after a significant preliminary agreement under the CHIPS & Science Act was confirmed.
- Super Micro Computer (SMCI, Financial) shares are down by 2.4% after pricing a share offering below market value.
- Chipotle Mexican Grill (CMG, Financial) shares jumped by 6.1% after announcing a 50-for-1 stock split.
- JetBlue (JBLU, Financial) shares decreased by 0.9% following news of route eliminations.
Looking at global markets, Asian markets mostly ended higher while European markets are hovering around their opening levels. Notable updates include Japan's market closure for the Vernal Equinox, a slight increase in China's Shanghai Composite, and the U.K.'s inflation rate dropping to its lowest since September 2021.
Today's News
Topgolf Callaway Brands Corp. (MODG) experienced a significant increase in early trading following a report by The Chosun Daily indicating potential sale discussions involving major shareholders BlackRock Advisors LLC, Providence Equity Partners LLC, and Thomas Dundon. The reported plan involves spinning off the Topgolf entertainment business and selling the Callaway Golf equipment and apparel business for approximately $2.98B, with a strategic South Korean investor showing interest.
PDD Holdings Inc. (PDD) witnessed a notable 13% rise in pre-market trading after announcing fourth-quarter results that exceeded expectations. The Chinese e-commerce giant reported a 34.7% year-over-year increase in non-GAAP earnings per American depositary share to RMB17.32 ($2.40) and a nearly 123% surge in total revenues to RMB88.88B ($12.52B). Both the top and bottom lines surpassed analysts' estimates, highlighting the company's strong performance in the online marketing services and transaction services segments.
Intel Corporation (INTC, Financial) is set to receive approximately $20B in grants and potential loans from the U.S. government, aimed at enhancing domestic semiconductor manufacturing. The funding, part of the CHIPS and Science Act, supports Intel's ambitious plans to invest over $100B in the U.S. over the next five years, emphasizing the strategic importance of bolstering chipmaking capacity and capabilities for economic and national security.
Copper futures (HG1:COM) experienced a decline, moving away from an 11-month peak amid concerns over demand in China and a stronger dollar. The recent drop comes after a significant rally, driven by a surprise production cut agreement among China's copper smelters, underscoring the volatile nature of the copper market and its sensitivity to global economic indicators and currency movements.
Money managers are increasingly leaning towards equities and risk assets, despite concerns over the crowded AI trade, according to a BofA survey. The survey reveals a rise in risk appetite to its highest level since November 2021, with stock allocations reaching a two-year high. This trend reflects growing optimism among investors regarding global growth prospects and a willingness to embrace risk in search of higher returns.
Chipotle Mexican Grill (CMG, Financial) shares surged more than 5% after announcing a 50-for-one stock split, aiming to make its shares more accessible to a broader range of investors. The decision underscores Chipotle's strong performance and confidence in its business model, as well as its commitment to rewarding shareholders and enhancing stock liquidity.
Super Micro Computer (SMCI, Financial) announced the pricing of its underwritten public offering, aiming to raise $1.75B to support operations, including inventory purchases, manufacturing capacity expansion, and increased R&D investments. The offering highlights Super Micro's growth ambitions and its focus on capitalizing on the robust demand for computing and storage solutions.
Tencent Holdings Ltd. (TCEHY, Financial) reported a 7% increase in fourth-quarter revenue and announced plans to significantly expand its stock buyback program. The company's commitment to returning value to shareholders, coupled with its robust performance across key business segments, underscores Tencent's resilience and strategic focus in a competitive digital landscape.
Boeing (BA, Financial) has decided to maintain production of its 737 Max jetliner at a reduced rate, emphasizing quality and safety over volume. This decision reflects Boeing's cautious approach to addressing safety concerns and regulatory scrutiny, underscoring the importance of ensuring the highest standards of reliability and trustworthiness in its aircraft.
Bristol-Myers Squibb (BMY, Financial) announced that its immunotherapy combo, Opdivo plus Yervoy, achieved its primary goals in a late-stage trial for hepatocellular carcinoma. This success marks a significant milestone in Bristol-Myers Squibb's efforts to expand the treatment options available for liver cancer patients, highlighting the potential of combination therapies in oncology.
The Biden administration's decision to soften fuel economy standards represents a significant development for automakers, providing more flexibility in the transition to electric vehicles. This policy adjustment reflects a pragmatic approach to balancing environmental objectives with the practical challenges and economic considerations facing the automotive industry.
BioNTech (BNTX, Financial) reported a decrease in revenue and net profit for Q4 2023, driven by declining demand for COVID-19 vaccines. Despite the financial impact, BioNTech's commitment to R&D and its prudent capital allocation strategy underscore the company's resilience and long-term growth potential in the biotechnology sector.
Taysha Gene Therapies (TSHA, Financial) saw a significant premarket increase after announcing promising early clinical results for its lead gene therapy program targeting Rett syndrome. The positive safety and efficacy data from the REVEAL Phase 1/2 trial represent an important step forward in Taysha's mission to develop transformative treatments for rare neurodevelopmental disorders.
Astera Labs (ALAB, Financial) priced its initial public offering, marking a significant milestone for the company as it seeks to capitalize on the growing demand for semiconductor solutions. The IPO reflects Astera Labs' growth ambitions and its commitment to innovation in the rapidly evolving tech landscape.
Boeing (BA, Financial) is reportedly exploring options to minimize or eliminate Spirit AeroSystems' (SPR) connections to Airbus (EADSF) ahead of a potential acquisition. This strategic move highlights the complex dynamics and competitive considerations in the aerospace supply chain, underscoring Boeing's focus on securing a reliable and independent source of critical components.
Google (GOOG, Financial) (GOOGL, Financial) has been fined €250M by France's competition agency for failing to comply with a previous agreement related to negotiating with press agencies and publishers. The fine underscores the ongoing regulatory challenges facing tech giants in Europe and the importance of adhering to commitments made to authorities.
Citi downgraded Wells Fargo (WFC, Financial) to Neutral, citing limited upside potential for positive EPS revisions. The adjustment reflects a cautious outlook on the banking sector, emphasizing the importance of valuation and earnings expectations in investment decisions.
Blade Air Mobility (BLDE, Financial) announced a stock repurchase program, reflecting confidence in its business model and financial strength. The buyback initiative highlights Blade's commitment to shareholder value and its positive outlook for the urban air mobility market.
Starwood Capital (STWD, Financial) agreed to acquire a significant equity stake in ESR Group, emphasizing the strategic importance of logistics and data centers in the real estate sector. The investment underscores Starwood's focus on growth areas and its confidence in ESR Group's leadership and market position.
Aquestive Therapeutics (AQST, Financial), Euronav NV (EURN, Financial), Solidion Technology (STI, Financial), Prudential (PUK, Financial), and Harrow (HROW, Financial) were among the pre-market losers, highlighting the volatility and diverse challenges facing companies across different sectors.
Apple (AAPL, Financial) CEO Tim Cook's visit to China underscores the tech giant's ongoing efforts to strengthen relationships with local suppliers and navigate the competitive and regulatory landscape in one of its key markets.
Nucor (NUE, Financial) announced a partnership with Mercedes-Benz (MBGAF) to supply sustainable steel for vehicle production, highlighting the growing emphasis on environmental responsibility in the automotive industry and the steel sector's role in supporting green manufacturing practices.
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