Today, the stock market looks set to open a bit lower, wrapping up a week that saw major indices hitting new highs. The slight dip comes as investors are weighing a mix of earnings reports. NIKE (NKE, Financial) and lululemon athletica (LULU, Financial) are seeing their stock prices drop after their earnings announcements, while FedEx (FDX, Financial) shares are climbing following its earnings report. There's also a downtick in Treasury yields, with the 10-year note and the 2-year note yields decreasing slightly. No significant U.S. economic data is scheduled for release today.
In company news:
- NIKE (NKE, Financial) reported earnings that were better than expected, with revenue meeting forecasts. North America sales rose by 3%, and the company sees positive growth ahead.
- FedEx (FDX, Financial) also surpassed earnings expectations, though revenue fell short. The company has tightened its earnings forecast for the year and announced a new $5 billion share buyback program.
- lululemon athletica (LULU, Financial) beat earnings estimates but expects lower-than-anticipated earnings and revenue for the coming quarter and fiscal year.
- Tesla (TSLA, Financial) is reducing production at its China plant due to slowing electric vehicle sales.
- Best Buy (BBY, Financial) received an upgrade from JPMorgan, boosting its stock price.
- Rush Street Interactive (RSI, Financial) is reportedly seeking buyers, with DraftKings (DKNG, Financial) among the potential suitors.
- Altice (ATUS, Financial) faces discontent from bondholders over a proposed debt value reduction.
Looking at global markets, Asian-Pacific stocks mostly fell, with notable movements in Japan's Nikkei and Hong Kong's Hang Seng. European markets are mixed but mostly leaning towards a positive close for the week. Economic data and various reports are influencing these movements, including actions by China's state banks to support the yuan and the latest consumer confidence and retail sales figures from the UK.
Today's News
Amid a vibrant stock market, FedEx (FDX, Financial) shares leaped over 12%, buoyed by the company's cost-reduction strategies in its Express segment and an uptick in margins for FQ3. Despite a mixed FQ3 performance and a narrowed FY2024 outlook, the Express sector outperformed expectations with a 2.5% operating margin. FedEx now projects FY2024 earnings to range between $17.25 and $18.25 per share, slightly adjusting from its prior forecast.
Conversely, several companies faced declines, with Ispire Technology (ISPR, Financial) dropping 27% after announcing a public offering, and Lululemon Athletica (LULU, Financial) falling 13% post-Q4 earnings disclosure. Other notable decliners include Grifols (GRFS, Financial), Cutera (CUTR, Financial), and Nike (NKE, Financial), the latter dipping 6% following its Q3 earnings announcement despite reaffirming an approximate 1% full-year revenue growth expectation.
Pfizer (PFE, Financial) received a nod from the European Medicines Agency for its novel antibiotic combination, Emblaveo, aimed at treating multidrug-resistant infections. This endorsement underlines the drug's potential in addressing complicated infections with limited treatment alternatives.
Wall Street's fund asset dynamics shifted, with equity funds attracting $15.5B, led by significant inflows into SPDR S&P 500 ETF (SPY, Financial) and iShares S&P 500 Growth ETF (IVW, Financial). Despite the overall $49.8B withdrawal from fund assets, equity and commodity funds saw positive movements.
The Federal Reserve's decision to maintain interest rates sparked discussions on the future trajectory of rate cuts. With an anticipated three rate cuts in 2024, the focus remains on the Fed's long-term monetary policy amidst ongoing economic evaluations.
Tesla (TSLA, Financial) is adjusting its production strategy in China, reducing the manufacturing of its Model Y and Model 3 vehicles amid slowing EV sales growth. This decision reflects the competitive pressures and market dynamics in the world's largest EV market.
Alphabet (GOOG, Financial) (GOOGL, Financial) saw its shares rise after being added to Wedbush Securities' Best Ideas List, highlighting the tech giant's robust position in the digital advertising industry and its potential to leverage generative AI effectively.
Dividend activity this week featured increased payouts from JPMorgan Chase (JPM, Financial) and FirstEnergy (FE, Financial), with upcoming ex-dividend dates for Humana (HUM, Financial) and Mondelez (MDLZ, Financial) signaling continued interest in dividend-paying stocks.
Digital World Acquisition Corp (DWAC, Financial) faces a pivotal shareholder vote on its deal to take Trump Media & Technology public, with legal challenges and strategic implications at the forefront of this significant corporate event.
Sangamo Therapeutics (SGMO, Financial) announced a funding initiative through a securities purchase agreement, aiming to bolster its financial position and further its research and development efforts.
Verizon (VZ, Financial) received an upgrade from Redburn-Atlantic, citing improving subscriber trends and the potential benefits from a decline in interest rates, signaling a positive outlook for the telecom giant.
The United Nations General Assembly's adoption of a global resolution on artificial intelligence emphasizes the need for a safe and trustworthy development of AI technologies, underscoring the global commitment to harnessing AI's potential responsibly.
Baidu (BIDU, Financial) unveiled enhancements to its AI model platform, Qianfan, introducing new ERNIE models designed to offer efficient and cost-effective AI solutions across various applications.
Foot Locker (FL, Financial) enjoyed a positive adjustment in its stock rating, driven by Nike's (NKE, Financial) reaffirmed commitment to the wholesale channel, signaling potential growth opportunities for the retailer.
As the financial landscape continues to evolve, regulatory speeches and market movements remain focal points for investors and analysts alike, with a keen eye on future economic indicators and policy decisions.
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