- Dow Jones Industrial Average is flat
- S&P 500 is up 0.2%
- Nasdaq 100 is flat
US futures are treading water today, finding some minor support as US treasury yields ease, while markets brace for the Federal Reserve meeting tomorrow and continue to digest a wave of earnings.
Most discussed Reddit stocks
Below is a list of the top 10 most mentioned US stocks on the WallStreetBets thread on Reddit over the last 24 hours, according to data from Quiver Quantitative. Exchange-Traded Funds (ETFs) and other instruments have been excluded:
- Jacob’s Solutions
Most active US stocks before the bell
Below are the most active stocks with a valuation of at least $500 million before the bell, based on trading data taken from Bloomberg:
- Sarepta Therapeutics
US premarket winners and losers
Here are the stocks worth at least $500 million experiencing the sharpest movements in premarket trade, according to data from Bloomberg:
Top US stocks to watch
Let’s have a look at the top stocks to watch today.
Pfizer enters red as Covid eases
Pfizer is down 1.5% and testing multi-year lows after it entered the red for the first time since 2019 as sales of its Covid-19 products plunged, also leading to some hefty charges being booked and dragging down the bottom-line.
The pharmaceutical giant said revenue dropped to $13.2 billion in the latest quarter from $22.6 billion the year before. That was down to a 70% drop in sales of its Covid-19 vaccine and a staggering 97% fall in revenue from its treatment named Paxlovid. It also booked $5.6 billion worth of charges related to both products in the quarter.
Caterpillar slides as order backlog declines
Caterpillar is down 5.8% and at its lowest level in over four months after the heavy industrial machinery maker revealed its order backlog declined in the latest quarter, triggering fears that demand is waning and that the economy is slowing down.
The company beat expectations in the third quarter as sales jumped 12% and EPS of $5.45 smashed the $4.79 forecast. But that was overshadowed by a contraction in the order book, stoking concerns that the outlook is softening.
Caterpillar is a bellwether stock that is watched a broader gauge on the US and global economy because its equipment is used in a variety of key industries such as energy, construction and mining.
UAW ends strike action against Big Three automakers
General Motors is up 0.5% after striking a tentative deal with the United Auto Workers union yesterday, bringing an end to over six weeks’ worth of disruption but at a big cost.
Ford and Stellantis, both of which struck their own deals with the UAW, are up 0.4% and 2.7%, respectively. The deals struck by the UAW with the trio are largely aligned with each other, underpinned by a 25% rise in hourly wages, cost-of-living increases and other incentives.
While a deal is welcome news, markets are now grappling with what the sharp increases in wages will mean for their cost bases and profitability. For example, two unidentified sources told Reuters that the new deal will cost General Motors some $7 billion over four-and-a-half years!
Tesla stock slides to 5-month lows
Tesla shares are down 0.7% and poised to open at their lowest level in over five months today, building on the heavy losses we saw yesterday when the stock slumped amid fears that demand for electric vehicles is softening despite the wave of price cuts we have seen this year.
Panasonic and chipmaker ON Semiconductor both provided gloomier outlooks for their automotive arms yesterday, causing Tesla shares to flump 4.8%, with higher interest rates and the cost-of-living crisis stretching household budgets.
Smaller electric vehicle stocks are also suffering, with Rivian is down 0.4% and at a four-month low while Lucid Group is up 0.3% but still flirting with all-time lows.
The end of strike action against traditional automakers may also be weighing on Tesla, with UAW leader Shawn Fain warning the organisation plans to try to expand its membership to non-unionised factories. “When we return to the bargaining table in 2028, it won’t just be with a Big Three, but with a Big Five or Big Six”, Fain said on Sunday, spooking investors that Tesla could be a target.
AMD stock: Q3 earnings preview
AMD is up 0.2% this morning at $96.39 as markets wait for quarterly results to come out after the closing bell today, when all eyes will be on whether it is catching-up in the race for AI supremacy and if the lull in demand for consumer electronics has bottomed-out.
Revenue is expected to rise just 2.5% from last year to $5.71 billion and, although tepid, that would follow on from two consecutive quarter of declines. Adjusted EPS is expected to rise 1% from last year to $0.68.
That will be largely down to its Client segment that provides CPUs, GPUs and processors into laptops and computers coming up against easier comparatives. Sales are forecast to be up 20.6% from last year at $1.23 billion.
That will bolster hopes that the lull in demand for consumer electronics is bottoming-out, but that still remains significantly below historic levels. Plus, gaming will remain weak, with sales set to drop over 6%, but appears on course to potentially start rebounding in the near future.
The data centre division is forecast to see revenue rise a measly 0.9% this quarter, which may be underwhelming after AMD guided for an acceleration in growth during the second half and shifting more pressure onto its fourth quarter results. Its AI roadmap and new MI300 chip will be closely watched to see if there are any immediate hopes that it can gain ground on market-leader and runaway success story NVIDIA.
Will US curbs cost NVIDIA billions in sales?
NVIDIA is down 1.5% amid reports that it could cancel billions of dollars’ worth of orders for its advanced chips used for AI from China next year as tighter export curbs introduced by the US government bite.
The Wall Street Journal said NVIDIA had already shipped orders for AI chips to China for 2023, citing unnamed sources, and was hoping to deliver some orders made for 2024 before new export rules came in later this month. However, NVIDIA has now reportedly been told the new curbs designed to prevent advanced chips flowing to China are effective immediately.
That could starve companies like Alibaba, Baidu and Tik Tok-owner ByteDance from acquiring advanced chips from NVIDIA going forward. Alibaba is down 1.5% while Baidu is down 1.3%, amid a broader selloff in Chinese stocks after weak manufacturing data was released.
NVIDIA has previously warned that preventing US chips from being sold in China could cause a permanent loss of business for American semiconductor firms but has said that current export bans would not have any immediate impact on its financial performance.
Apple launches new products ahead of earnings
Apple shares are down 0.7% at $169.15. The company unveiled a slew of new hardware at a late-night event yesterday, including a new iMac and MacBook Pros equipped with its new M3 chip boasting better power and performance. Apple switched from using Intel chips in 2020 and has managed to grow sales of its hardware since switching to its own in-house processor.
Morgan Stanley said the new M3-powered MacBook Pro is “coming at the right time” and boasts a “more attractive price point” while Citigroup said more users still using Apple products powered by Intel chips will be encouraged to upgrade.
Demand for hardware remains soft but Apple is hoping new products, including its recently-launched iPhone 15 (as well as easier comps), can revive growth in the new financial year. Apple reports fourth-quarter results on Thursday, when all eyes are on how popular the iPhone 15 has been since launch, especially in China.
You can find out what you need to know in our Apple Q4 Earnings Preview.
Jefferies cut its target price on Apple this morning to $195 from $220.
Pinterest soars as results gain momentum
Pinterest is up over 15% and at four-month highs of $28.85 after beating expectations for a third consecutive quarter and providing an impressive outlook, raising confidence that the social media firm is reviving growth and improving margins.
Revenue rose 11% from last year to $763 million. Adjusted Ebitda more than doubled, and it swung from a loss at the bottom-line. It said it is expecting revenue growth to accelerate to 11% to 13% in the fourth quarter, which impressed analysts forecasting for 11.3%.
Morgan Stanley said the update shows it is delivering operational efficiencies. KeyBanc said it sees upside thanks to faster growth and healthier margins. Baird said Pinterest beat on virtually every metric.
Several brokers upped their target price on Pinterest today, including RBC to $32, Roth MKM to $31, JPMorgan to $34, Jefferies to $32 and Bernstein to $31.
Arista Networks impresses with outlook
Arista Networks is up over 9% today at $192.19 after beating expectations in the third quarter and impressing with its revenue guidance for the fourth. That is allowing Arista to regain the heavy ground lost last week, when major customer Meta warned the outlook for 2024 was uncertain and prompted concerns that Arista’s revenue could suffer.
Arista Networks said revenue rose 28% from last year in the third quarter to $1.51 billion and adjusted EPS jumped to $1.83 from $1.25. That was better than the $1.48 billion in sales and $1.57 in EPS forecast by analysts. Arista said it is anticipating $1.50 billion to $1.55 billion in sales in the fourth quarter, which was also ahead of the $1.47 billion pencilled-in by analysts. Arista is now anticipating 33% growth in annual sales this year.
Several brokers upped their view on Arista today, including JPMorgan to $230, Evercore ISI to $210, Jefferies to $180, Barclays to $226, Needham to $215 and Goldman Sachs to $223.
SoFi stock pops and then drops
SoFi shares experienced their sharpest rise in almost three months yesterday after it upped its revenue outlook for the rest of the year, but the stock pulled back sharply before the end of the session and only managed to close up 1%. The share price is up 1.6% at $7.05 this morning and largely trading in-line with where it started on the day of its results.
Deposits flooded into the coffers and helped reduce the cost of lending, helping boost profitability and accelerate growth.
Two brokers cut their target price on SoFi this morning, with BTIG lowering its view to $9 from $13 and Truist Securities reducing its target to $14 from $16.
JetBlue descends to 12-year low on tumultuous day
JetBlue Airways is down over 10% today and set to open at its lowest level since 2011 after warning its quarterly loss will be much wider than anticipated and taking a knock from worries its proposed acquisition of Spirit Airlines could be blocked.
JetBlue said its adjusted loss per share in the fourth quarter will be $0.35 to $0.55, which was much wider than the $0.21 loss pencilled-in by analysts. The third-quarter loss of $0.39 was also much wider than the $.028 forecast. That is because JetBlue is struggling with the operational backdrop, blaming everything from the weather to air traffic control issues.
Meanwhile, the US Department of Justice will ask a federal judge to block JetBlue’s proposed acquisition of Spirit Airlines as a trial kicks-off today, arguing it would be for the good of competition for cheap flights.
Lyft stock hits 5-month low as broker warns “steer clear”
Lyft shares are down 4.5% at $9.00 and poised to open at a five-month low today after broker MoffettNathanson warned investors to “steer clear” of the ride-hailing company and downgraded it to Neutral and setting a new target price of just $7, which represents a new low on Wall Street.
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