Top Stock News Highlights: A Recap of Today’s Market Moves
U.S. Job Growth and Labor Market Dynamics: November witnessed robust job growth in the U.S., driven by the return of thousands of automobile workers and actors following strikes. However, analysts caution that beneath the surface, signs indicate a cooling trend in the labor market. This mixed employment outlook adds nuance to the economic recovery narrative.
Lululemon Athletica’s Cautious Q4 Outlook: Lululemon Athletica, a leading premium apparel retailer, provided a lower-than-expected forecast for its fourth quarter, expressing a cautious stance for the holiday season. Despite a strong performance in Q3, the outlook, citing customer spending cutbacks and strategic shopping closer to Christmas, led to a decline in the company’s shares.
UK Antitrust Review of Microsoft and OpenAI Partnership: The UK antitrust regulator is scrutinizing Microsoft’s multi-billion dollar partnership with OpenAI, focusing on whether it necessitates a merger probe. OpenAI’s decision to grant Microsoft a non-voting board seat in the partnership has prompted regulatory attention, reflecting growing concerns about tech collaborations.
Honeywell: Honeywell announced a significant move with the acquisition of Carrier’s security business for $4.95 billion. This strategic move aims to bolster Honeywell’s position in the industry. Carrier expects approximately $4 billion in net proceeds from the deal, intending to utilize the funds for debt reduction.
Broadcom’s Revenue Forecast Below Expectations: Chipmaker Broadcom projected annual revenue below Wall Street estimates, citing weak enterprise spending and intense competition. Despite the acquisition of VMware, Broadcom’s fiscal 2024 revenue outlook fell short of analysts’ expectations, signaling challenges in the enterprise technology sector.
Cooper Companies: Cooper Companies exceeded Wall Street estimates for quarterly revenue, propelled by strong performance in its contact lens unit. The company anticipates fiscal 2024 revenue between $3.81 billion and $3.88 billion, showcasing optimism despite broader economic uncertainties.
Corporate Leadership Changes: Levi Strauss & Co and Spotify
Levi Strauss & Co announced the retirement of CEO Chip Bergh in April, with Michelle Gass set to take over the helm on January 29. Meanwhile, Spotify Technology’s CFO Paul Vogel is stepping down in March after eight years, following a challenging week for the music streaming giant.
Apple: In a strategic move, Apple is allocating product development resources for the iPad to Vietnam, working with China’s BYD for this shift. This marks a significant step as Apple diversifies its manufacturing and development operations.
Blackstone: Blackstone and Digital Realty Trust unveiled plans for a joint venture, committing $7 billion to develop data centers across Frankfurt, Paris, and northern Virginia. The move reflects the growing demand for data infrastructure amid the digital transformation era.
Boeing: Boeing signaled a revised and slower production ramp-up for its 737 narrowbody jetliner, with a production rate expected to reach 42 jets per month in February 2024. The adjustment aligns with evolving market dynamics and manufacturing considerations.
- Crown Castle Inc: CEO Jay Brown is set to step down on January 16, following pressure from activist investor Elliott Investment Management for a board shake-up and leadership change at the wireless tower owner. Board member Anthony Melone will serve as interim CEO, and the company plans to conduct a search for a permanent CEO.
- FedEx Corp: A company formerly contracted by FedEx to deliver packages on the California-Oregon border has filed a lawsuit, alleging systemic illegal and wrongful business practices by FedEx that violate U.S. anti-racketeering law. If successful, the case could impact cost-savings from FedEx’s restructuring efforts.
- Marathon Petroleum Corp: The company has restored normal operations at its Galveston Bay Refinery after a crude distillation unit malfunctioned. The 225,000-bpd Pipestill 3B CDU had experienced issues, but the refinery has resumed its regular operations.
- MarketAxess Holdings Inc & Tradeweb Markets Inc: Plans to provide a bond market price tape in the UK or EU have been abandoned by Tradeweb, MarketAxess, and Bloomberg, citing “risk and complexity.” This decision aligns with the EU’s goal to create consolidated tapes of stock and bond prices for a market-wide snapshot.
- McDonald’s Corp: An Australian workers union has filed a class action against McDonald’s, alleging that the fast-food chain required employees to work before and after rostered shifts for free. The lawsuit seeks A$100 million in backpay, claiming a deliberate and systematic practice by McDonald’s and franchisees.
- Microsoft Corp: Britain’s antitrust regulator will review Microsoft’s multi-billion dollar partnership with OpenAI to determine if it warrants a merger probe. This scrutiny comes after OpenAI announced that Microsoft would have a non-voting board seat in the partnership.
- NVIDIA Corp: The chipmaker is in advanced talks with Malaysian conglomerate YTL for a data center deal. The potential collaboration would include cloud infrastructure, likely anchored at YTL’s data center complex in Johor, Malaysia. NVIDIA will also discuss semiconductor cooperation with Vietnamese tech companies and authorities in Hanoi.
- Uber Technologies Inc: A U.S. appeals court panel noted a “legal error” in dismissing a lawsuit against Uber, claiming its policy of terminating drivers with low passenger ratings is racially discriminatory. The case alleges violations of the Civil Rights Act of 1964 and California anti-discrimination law.
- United Parcel Service Inc (UPS): The Teamsters union, representing U.S. workers at UPS, plans to respond to the firing of about 35 newly organized workers by filing unfair labor practice charges and potentially striking. UPS asserts that it respects employees’ rights to organize and has not committed unfair labor practices.
- Woodside Energy Group Ltd: Santos shares surged on the potential $52 billion merger with Woodside. Investors note that valuation will be crucial, and domestic asset sales may be necessary to address competition concerns. The merged entity would become a major global liquefied natural gas (LNG) producer, controlling a significant share of Australia’s gas market.
Top Analyst Ratings
- AbbVie Inc: Piper Sandler increases the target price to $180 from $175, emphasizing the positive long-term growth prospects driven by recent acquisitions of Immunogen and Cerevel.
- Broadcom Inc: Bernstein raises the target price to $1150 from $1000, citing the company’s strong fourth-quarter earnings as a basis for the adjustment.
- C3.ai Inc: Piper Sandler reduces the target price to $27 from $28, citing the company’s adjusted margin guidance due to increased spending on generative artificial intelligence solutions.
- Dollar General Corp: JPMorgan raises the target price to $108 from $107, reflecting the company’s better-than-expected third-quarter profit.
- Domino’s Pizza Inc: JPMorgan raises the target price to $420 from $410, following the company’s upward revision of its long-term annual global sales forecast.
