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Shares of Virgin Galactic Holdings on Thursday made a scorching run higher after the space-travel company said it plans to begin offering commercial flights into space near the end of this month, a significant breakthrough for the nearly 20-year-old company founded by Richard Branson.
Shares rocketed 44% after hours on the news.
“We’re opening…
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Tesla Stock’s Winning Streak Ended. Wall Street Says Ford, GM, AI Made It All Happen.
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Adobe
Systems reports financial results after the close of trading on Thursday, but the stock is more likely to move on any tidbits the company shares about its push into artificial intelligence—and the status of its pending $20 billion acquisition of the collaborative design software company Figma.
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Siemens set out plans to invest 2 billion euros ($2.17 billion) to boost manufacturing capacity this year, pledging to develop a high-tech plant in Singapore and expand its digital factory in Chengdu, China, to tap growth opportunities in digitalization and automation.
The German industrial conglomerate said Thursday that it would pour around EUR200 million into its new Singapore facility, creating more than 400 jobs. The company will also invest EUR140 million to expand its digital factory in Chengdu, adding another 400 jobs.
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A federal judge late Tuesday approved a request by the Federal Trade Commission to temporarily block Microsoft Corp.’s $69 billion acquisition of Activision Blizzard Inc.
U.S. District Judge Edward Davila in San Francisco issued a temporary restraining order in order to “maintain the status quo,” and set a evidentiary hearing to be held June 22-23 on whether a preliminary injunction should be issued.
The deal was set to be finalized as soon as this Friday. Tuesday’s order said the deal may not close until at least five days after the court’s preliminary injunction ruling.
The acquisition has raised antitrust concerns that Microsoft
MSFT,
with its Xbox gaming console, could withhold hit Activision Blizzard
ATVI,
videogame franchises such as “Call of Duty” and “Overwatch” from competing console platforms.
On Monday, the FTC filed for a restraining order and injunction to block the deal, arguing “a preliminary injunction is necessary to maintain the status quo and prevent interim harm to competition.”
“This loss of competition would likely result in significant harm to consumers in multiple markets at a pivotal time for the industry,” the FTC said in its filing Monday.
In a statement Tuesday evening, a Microsoft spokesperson said: “Accelerating the legal process in the U.S will ultimately bring more choice and competition to the gaming market. A temporary restraining order makes sense until we can receive a decision from the court, which is moving swiftly.”
While EU regulators approved the deal in May, British regulators have tentatively scheduled appeal hearings after saying in April they would prohibit the purchase.
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That’s the practice by many S&P 500 food and consumer companies of raising prices to protect what a new report calls their “cushioned corporate profits,” and it has enabled them to boost margins through the current inflationary period.
Companies including Kimberly-Clark Corp.
KMB,
PepsiCo Inc.
PEP,
General Mills Inc.
GIS,
and Tyson Foods Inc.
TSN,
have on recent earnings calls touted their ability to raise prices, earning tidy profits and rewarding their shareholders as they go, according to the report from Accountable.US, a liberal-leaning consumer-advocacy group.
And they have signaled their intention to continue to take “price actions” even as the Federal Reserve has hiked interest rates an unprecedented 10 times in an effort to tame inflation.
“Higher interest rates haven’t stopped S&P companies, especially in the big food industry, from raising consumer prices despite reporting billions in extra net earnings and over a trillion dollars in new giveaways to wealthy investors,” said Liz Zelnick, director of economic security and corporate power at Accountable.US.
“Corporate greed is a stubborn thing and requires serious action from Congress. The Fed has not seen an adequate return on its investment in a policy that has already created fissures in the economy that could lead to recession. It’s just not worth it,” she said.
Now read: Skip, pause or hike? A guide to what is expected from the Fed on Wednesday.
Accountable.US is not alone in calling out price hikes on essentials including food. Walmart Inc.
WMT,
is also unhappy with packaged-food companies that have steadily raised prices in dry grocery and consumable goods, according to a recent report from research company CFRA.
“Given Walmart’s enormous bargaining power over its suppliers, we expect the retail giant to push back on further price increases from its packaged-food suppliers,” he said. That is expected to hurt margins, especially if volume growth does not recover.
May inflation data released Tuesday found that food prices were up 0.2% from April, after remaining flat for the previous two months. Food prices are up 6.7% over the last year. The food-at-home index is up 5.8% over the last year, while the index for cereals and bakery products is up 10.7%.
Food prices started to rise about two years ago, when supply-chain issues and higher fuel and commodity prices led companies to pass some of those costs on to customers.
But companies appear determined to raise prices even more, despite a decline in shipping and gas costs. Gasoline was down 5.6% in May from April and fuel oil fell 7.7%, according to consumer-price-index figures.
Also read: U.S. inflation slows again, CPI shows, and might keep Fed on sidelines
Kimberly-Clark executives told analysts on its recent earnings call that the company is able to “rapidly implement broad pricing actions” and acknowledged that “pricing has continued to be a big driver behind our top-line growth.”
The company’s first-quarter earnings topped expectations and it raised guidance for the full year. That’s after it raised prices by 10% for a second straight quarter, driving margins wider by 340 basis points.
Shareholders were rewarded to the tune of $425 million during the quarter, the Accountable.US report notes.
PepsiCo Chief Executive Ramon Laguarta told analysts on that company’s recent earnings call that most of its price increases are behind it.
However, he said, “obviously, there are some markets, highly inflationary markets around the world, where we might have to take additional pricing. If you think about Argentina, Turkey, Egypt — those kinds of markets where the currencies are suffering. But the majority of our pricing is already done,” he said, according to a FactSet transcript.
PepsiCo’s 2022 earnings rose 16.9% to nearly $9 billion, and it spent more than $7.6 billion on stock buybacks and dividends, with the former up 1,313% from 2021.
General Mills, meanwhile, bragged about “getting smart about how we look at pricing” on its recent call. The parent of brands including Cheerios, Nature Valley, Blue Buffalo pet products and Pillsbury raised its fiscal 2023 guidance in February.
And Tyson executives touted the “significant pricing power of our portfolio with a year-over-year increase of 7.6%.” Tyson’s latest quarter included a surprise loss, as it was hit by weak demand for meat, along with plant closures and job cuts.
For more, see: Tyson Foods stock slides after meat producer swings to surprise loss
But Tyson had net income of over $3.2 billion in 2022, up from $3 billion in 2021, and it rewarded shareholders with $1.35 billion in buybacks and dividends.
For Accountable.US, it’s more compelling evidence that the Fed’s rate-hike strategy “has failed to root out one of the main drivers of inflation and should give the [Federal Open Market Committee] pause before lifting rates again this week to the detriment of jobs and the economy.”
The Consumer Staples Select Sector SPDR exchange-traded fund
XLP,
has fallen 1.6% to date in 2023, while the SPDR S&P Retail ETF
XRT,
has gained 4.6%. The S&P 500
SPX,
has gained 13% in the same period.
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Shares of Oracle Corp. rose after hours Monday after the IT and cloud infrastructure provider reported fiscal fourth-quarter results that topped expectations, helped by a jump in cloud revenue that executives said positioned the company well for the year to come.
The company reported fourth-quarter net income of $3.32 billion, or $1.19 a share, compared with $3.19 billion, or $1.16 a share, in the same quarter last year. Revenue rose 17% to $13.84 billion, compared with $11.84 billion in the prior-year quarter.
Excluding stock-based compensation, amortization and other charges, Oracle earned $1.67 a share, compared with $1.54 a year ago.
Analysts polled by FactSet expected Oracle to report adjusted earnings per share of $1.58, on revenue of $13.74 billion.
Oracle also declared a quarterly cash dividend of 40 cents a share. Revenue from Oracle’s cloud software and infrastructure services rose 54% during the quarter.
“So, both of our two strategic cloud businesses are getting bigger — and growing faster,” Chief Executive Safra Catz said in a statement. “That bodes well for another strong year in FY24.”
Oracle shares
ORCL,
were up 4.8% after hours on Monday. The stock closed regular trading up 5.8% to $116.43, putting it at a record high.
Prior to the results, analysts were focused on Oracle’s cloud business — which has faced concerns about tighter tech budgets in IT departments as inflation raises concerns about the economy — as well as its AI potential, which has catapulted shares of other tech companies higher. More executives inside and outside of tech, hoping for a similar pop from investors, have been talking about AI on earnings calls more this year.
Earlier on Monday, Wolfe Research upgraded Oracle, saying its cloud business could double its market share by 2025 “on the backs of architectural advantages, partnerships” and generative AI.
UBS analysts also said they expected Oracle to highlight its cloud-AI partnership with chip maker Nvidia Corp.
NVDA,
which analysts say is set to benefit from more AI development. Those expectations were confirmed on Monday, when Oracle management name-checked Nvidia in its earnings release.
“Nvidia themselves are using our clusters, including one with more than 4,000 GPUs, for their AI infrastructure,” Larry Ellison, Oracle’s co-founder and chief technology officer, said in the release.
Shares of Oracle have marched 81.7% higher over the past 12 months. The S&P 500 Index
SPX,
has risen 15.7% over that period.
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Apple Inc.’s $3,499 Vision Pro headset stole the show Monday as Apple kicked off its annual WWDC event.
Chief Executive Tim Cook and other executives showed off the next chapter of Apple
AAPL,
technology — “spatial computing” — during a keynote event that failed to maintain Apple’s record stock price. Shares had been on track to close at an all-time high before the event began, but were trading in the red once the event wrapped.
While the Vision Pro and its eye-popping price tag was the biggest news from the presentation, Apple also teased forthcoming software enhancements and new Mac computers.
Here’s everything that was announced Monday.
Apple was widely expected to roll out a mixed-reality headset at Monday’s event, but the announcement still brought a few surprises.
While Apple was rumored to be planning a price tag in the range of $3,000 for its new Vision Pro headset, the actual price of $3,499 was higher. Also, Apple won’t be selling the device until early next year, later than expected, in a move that means the company will miss the holiday season.
The company spent ample time during Monday’s presentation showing off what the Vision Pro can do in terms of bringing photographs, movies and everyday web browsing into physical spaces. Though the company discussed some gaming applications, and a partnership with Unity Software Inc.
U,
executives didn’t dwell on gaming and focused the immersive experience more fully.
See MarketWatch’s enhanced coverage of the Vision Pro launch here.
Apple’s iPhone software enhancements are typically a focus of WWDC, an event aimed at developers who create apps for that and other Apple platforms. This year’s update — iOS 17 — will feature new ways to share contact information, journal and make use of the iPhone while it’s locked.
With iOS 17 this fall, Apple users will also be able to set up contact “posters” for themselves, which will appear in full screen when they call others. They’ll be able to see live transcriptions of voice mails so they can determine whether to pick up calls they initially ignored.
See MarketWatch’s full guide to the new iOS 17 features here.
Apple is making the MacBook Air bigger with a new 15-inch model that features the company’s M2 chip. This version will start at $1,299 and become officially available next week, though preorders begin today. The device gets 18 hours of battery life, is 11.5-millimeters thin and weighs just over 3 pounds.
Apple had set out to infuse its personal-computer lineup with custom chips, and the company rounded that out Monday with new Mac Pro and Mac Studio devices that feature Apple Silicon processing. The Mac Studio will start at $1,999, and the Mac Pro will begin at $6,999.
Don’t miss: AI could give a big boost to profit margins — but there’s one key unknown, Goldman Sachs says
Apple will refresh its iPad software as well, with a new custom lock screen, widget enhancements, machine-learning tools that help with PDF editing and better annotation functions for PDFs. Plus, users will be able to at last set multiple timers.
Apple plans to upgrade its Mac operating system as well with a new version that will be called Sonoma. A key feature of this update is a redesign of the widgets function, giving users the ability to place widgets on their home screens and see these automatically fade when necessary so they don’t become distracting.
The new Sonoma operating system will add various tools for web presentations, including a feature that lets people appear as overlays on top of their presentation content and new reaction animations that can show balloons and confetti in response to meeting content.
Within Safari, family members will be more easily able to share passwords. The company will also let people create separate profiles for home, work, and school use of a Mac.
Apple is adding Adaptive Audio to help AirPods users drown out distracting sounds when appropriate. The technology will proactively lower outside volume when someone is on a call and detect when someone is talking to a real-life companion in order to lower music volume for the duration of the conversation.
Within video, Apple will let people use their phone cameras to engage in FaceTime conversations shown on an Apple TV. The company will also support AirPlay connectivity at hotels.
WatchOS 10, the new Apple Watch operating system, will let users retain their aesthetic watch faces but twist the digital crown to see widgets for information like weather, timers and events. The company is also looking to make the Apple Watch more useful for cyclists with advanced tracking features. One part of this allows users to pair an iPhone and see cycling data on the phone’s lock screen, which can be useful for those who dock their phones on a bike while also wearing the watch.
Watch owners will receive a new hiking app as well, which will let users see elevation data and topographical information.
Read: Apple could be cooking up 3 more $10 billion-plus businesses, one analyst says
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These Stocks Are Moving the Most Today: Palo Alto, Dish Network, C3.ai, EPAM Systems, and More
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Artificial intelligence may destroy humanity, but not before creating enormous wealth. Such is the paradox that now confronts investors after
Nvidia
recent earnings report inadvertently created a large-scale ethics experiment on Wall Street.
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This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers visit http://www.djreprints.com.
https://www.barrons.com/articles/amazon-misses-rally-8a6e2511
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U.S. stock futures were mixed Thursday as Nvidia results boosted tech but debt ceiling concerns weighed on the Dow.
On Wednesday, the Dow Jones Industrial Average
DJIA,
fell 256 points, or 0.77%, to 32800, the S&P 500
SPX,
declined 30 points, or 0.73%, to 4115, and the Nasdaq Composite
COMP,
dropped 76 points, or 0.61%, to 12484.
Recurring fiscal concerns are battling with a nascent technological paradigm for the market’s lead. Fears about the looming debt-ceiling deadline is counteracted by ebullience over AI to deliver a stark bifurcation.
Futures for the Dow Jones Industrial Average — a gauge arguably currently more sensitive to broader economic conditions — were under pressure early Thursday, while futures for the tech-rich Nasdaq 100 — powered by optimism over a secular AI shift — surged strongly.
“The prospect of the U.S. government being unable to meet its financial obligations continues to be a key influence on investor sentiment in global equity markets,” said Derren Nathan, head of equity research at Hargreaves Lansdown.
Ructions at the short end of the Treasury market — where some 1-month bill yields
TMUBMUSD01Y,
broke above 7% — illustrate trader anxiety that unless Congress can reach an agreement to extend the debt-ceiling the U.S. government may technically default at the beginning of June.
Ratings agency Fitch late Wednesday said it was placing Washington’s AAA credit rating on watch for a possible downgrade given what it termed the debt ceiling “brinkmanship”.
However, results and comments from chipmaker Nvidia
NVDA,
whose stock is soaring 25% in premarket action, have boosted hopes that AI will deliver the next period of strong growth for a number of tech companies.
“The AI revolution may be making a lot of noise but results from microchip firm Nvidia hint at some substance behind the hype,” said Russ Mould, investment director at AJ Bell.
CS.ai Inc.
AI,
and Advanced Micro Devices
AMD,
were among those bathing in Nvidia’s AI glow early Thursday.
The optimism over semiconductors bade well for the wider tech sector, according to Mark Newton, head of technical strategy at Fundstrat: “Semis in relative terms to broader technology, have the potential to break back out to new all-time highs this week on a ratio basis. That would be important and positive for this leading sector to show such strength.”
U.S. economic updates set for release on Thursday include the weekly initial jobless claims data and the second reading of first quarter GDP, both at 8:30 a.m. Eastern. Pending home sales for April will be published at 10 a.m..
Fed officials making comments include Richmond Fed President Tom Barkin speaking at 9:50 a.m. and Boston Fed President Susan Collins talking at 10:30 a.m.
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By Yifan Wang
Lenovo Group’s net profit fell 72% in its fourth quarter, as personal-computer sales continued to decline amid a deteriorating global economy and soft consumer spending.
Net profit for the three months ended March was $114 million, the world’s largest PC maker said Wednesday. That compared with profit of $412 million a year earlier.
Revenue fell 24% to $12.635 billion, as its main business of PC, smartphone and other device sales fell 21%. The company cited a demand slowdown and exchange-rate fluctuations as reasons for the decline.
Write to Yifan Wang at yifan.wang@wsj.com
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Embattled Twitter may soon have a serious rival: Facebook’s Instagram is planning to release a text-based app as a competitor.
Instagram, a property of Meta Platforms Inc.
META,
has been testing the service with creators, celebrities and influencers for months, according to people familiar with Meta’s strategy.
“We’re exploring a standalone decentralized social network for sharing text updates. We believe there’s an opportunity for a separate space where creators and public figures can share timely updates about their interests,” a Meta spokesperson told MarketWatch.
The app could debut as early as June, according to Lia Haberman, an adjunct professor at the University of California, Los Angeles, who teaches social and influencer marketing. She published a screenshot of an early description of the app, which may eventually be compatible with rival Twitter apps like Mastodon.
Twitter has hemorrhaged users since Tesla Inc.
TSLA,
Chief Executive Elon Musk began his chaotic leadership of the company late last year, prompting an exodus by disgruntled customers to alternative services like Mastodon and Bluesky.
Jasmine Enberg, an analyst at Insider Intelligence, said the text-based service has been in the works for months alternately code-named P92 or Barcelona.
“The big picture here is that there is clearly an appetite for Twitter-like services,” Enberg said in an interview. “With Twitter’s problems and so many alternatives, Meta’s new service looks like a mashup of Instagram and Twitter. Meta sees an opportunity to tap into this market, and it has a history of copying other popular apps [like Snap].”
Meta’s stock was flat in Friday’s regular trading session.
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U.K. telecoms provider BT Group set plans to cut up to 55,000 jobs by the end of the decade as it completes the rollout of high-speed broadband.
BT Group
BT.A,
says it is aiming to reduce its total labor force, which includes contractors, from 130,000 down to between 75,000 to 90,000 by fiscal 2028 to fiscal 2030.
“It is not surprising that in an inflationary and high-interest rates environment where costs are higher and increased expenses for servicing debt, telecommunication companies are employing technology to decrease costs wherever possible,” said Albie Amankona, analyst at Third Bridge.
U.K.-based mobile operator Vodafone Group
VOD,
on Tuesday said it would cut 11,000 jobs over three years.
BT said revenue and adjusted EBITDA for its fiscal year was in line with its outlook but normalized free cash flow of £1.33 billion was at the lower end of guidance due to spending on building the Openreach fiber network.
For fiscal 2024, it’s targeting revenue and EBITDA growth on a pro forma basis; and normalized free cash flow between £1 billion and £1.2 billion. BT shares dropped 8% in early trade.
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Berkshire Hathaway Sold U.S. Bancorp, Bank of New York Stock. Here’s What It Bought.
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