Nasdaq set to drop as short and long bond yield rise
U.S. stock futures fell Tuesday. The Dow Jones Industrial Average was set to open nearly 1% lower, hit by Goldman Sachs‘ drop on disappointing earnings. The Nasdaq was tracking for a 1.5% drop at the open as bond yields at the short end and the long end of the curve move higher. (CNBC)
The 2-year Treasury yield broke above 1% for the first time since February 2020, a month before the Covid pandemic declaration, which sent the U.S. economy into a recession. The 10-year yield topped 1.83%, its highest since January 2020. (CNBC)
Microsoft (MSFT) will buy video game giant Activision Blizzard (ATVI) in a $68.7 billion all-cash deal. Activision, which makes popular game franchises such as “Call of Duty,” has been mired in controversy in recent months due to allegations of sexual harassment and misconduct among company executives. Shares of Activision soared about 37. Microsoft shares fell more than 2%. (CNBC)
Bank earnings continued Tuesday morning with Dow stock Goldman Sachs reporting a fourth-quarter earnings miss as operating expenses surged 23% from a year earlier. The company’s shares in the premarket dropped 2.8%. Revenue of $12.64 billion topped estimates. (CNBC)
CNBC on Tuesday announced the launch of the CNBC Investing Club with Jim Cramer subscription product. The exclusive investor-focused product will equip members with Cramer’s unparalleled knowledge and analysis of portfolio management and investing and give behind-the-scenes access to Cramer and the Investing Club team.
* Cramer’s Investing Club Stock Profile: Why we own Apple and don’t trade it (CNBC Investing Club)
BlackRock (BLK) CEO Larry Fink pushed back against accusations that the asset manager was using its heft and influence to support a politically correct agenda. “Stakeholder capitalism is not about politics. It is not a social or ideological agenda. It is not ‘woke,'” Fink said in his annual letter to corporate leaders, released Monday. (CNBC)
Fink reiterated those sentiments in a CNBC interview that ran on Tuesday. He said he’s looking at the “the shape of the yield curve” in the bond market as a signal to where stocks go from here with an “aggressive Federal Reserve over the course of the next two years.”
U.S. and international oil prices hit more than seven-year highs Tuesday after the United Arab Emirates vowed to retaliate against Yemen’s Iran-aligned Houthi group for Monday’s deadly attack on its capital Abu Dhabi. Overnight, West Texas Intermediate crude jumped more than 2% to hit $85.56 per barrel, before trimming those gains. (Reuters)
Billionaire investor Chamath Palihapitiya said during a recent podcast that “nobody cares” about the ongoing human rights abuses against the Uyghurs in China. Palihapitiya sought to clarify his remarks in a Monday evening tweet, saying he recognizes that he came across as “lacking empathy.” The Chinese government has previously denied any wrongdoing or human rights abuses in Xinjiang. (CNBC)
White House chief medical advisor Dr. Anthony Fauci said Monday it’s still too soon to predict whether the omicron Covid variant will mark the final wave of the coronavirus pandemic. “It is an open question whether it will be the live virus vaccination that everyone is hoping for,” Fauci said via videoconference at The Davos Agenda virtual event. (CNBC)
The Senate is set to launch debate Tuesday on a voting bill with attention focused intently on two pivotal Democrats: Kyrsten Sinema of Arizona and Joe Manchin of West Virginia. They’ve been singled out with a barrage of criticism during Martin Luther King Jr. Day events for their refusal to change what civil rights leaders call the “Jim Crow filibuster.” (AP)
Major U.S. airline CEOs warned of an impending “catastrophic” aviation crisis tomorrow when AT&T (T) and Verizon (VZ) are set to deploy new 5G service. The airlines said the new service could potentially make a significant number of widebody aircraft unusable and “could potentially strand tens of thousands of Americans overseas.” (Reuters)
Activist investor Macellum Advisors is renewing its push for Kohl’s (KSS) to increase shareholder value. Macellum holds a roughly 5% stake in Kohl’s, and is telling Kohl’s that it either needs to change its board or hire bankers to explore a possible sale or other transaction. Kohl’s rose 1% in the premarket. (Reuters)
Peloton (PTON) will begin charging for setup and delivery of its bicycles and treadmills starting January 31, services that had previously been included in the sales price. Peloton will charge $250 for setup and delivery of its bicycles and $350 for its treadmills. The stock fell 2.2% in premarket trading. (CNBC)
Walmart (WMT) appears to be venturing into the metaverse with plans to create its own cryptocurrency and collection of nonfungible tokens, or NFTs. The big-box retailer filed several new trademarks late last month that indicate its intentions. (CNBC)
Shopify (SHOP) has partnered with Chinese e-commerce giant JD.com (JD) to help U.S. merchants sell their goods in the world’s second-largest economy. The deal marks a significant step up in Shopify’s China expansion, and it’s another step in JD’s internationalization efforts. (CNBC)
Alibaba (BABA) fell 3.8% in the premarket after a Reuters report said the Biden administration was reviewing the China-based company’s cloud unit to see if it poses a risk to US national security. The probe is said to focus on how the e-commerce giant stores the data of US clients.
Citrix Systems (CTXS) jumped 2.8% in premarket trading following a Bloomberg report saying Elliott Investment Management and Vista Equity Partners were in advanced talks to buy the software company.
23andMe (ME) initially rallied 6% in the premarket after announcing that drug maker GlaxoSmithKline had exercised its option to extend a partnership with 23andMe. The company will receive a one-time $50 million payment as part of that agreement. The stock subsequently lost its gains and fell 1.4%.
Gap (GPS) tumbled 5.4% in premarket trading after Morgan Stanley downgraded the apparel retailer’s stock to “underweight” from “equal-weight,” saying it expects margins for Gap and other mall-based specialty retailers to revert back to the declining path seen pre-pandemic.
Credit Suisse (CS) Chairman Antonio Horta-Osorio resigned after he reportedly violated Covid-19 protocols on multiple occasions. Horta-Osorio’s departure comes after just eight months with the bank. Credit Suisse fell 3.4% in premarket trading.
Unilever (UL) tumbled 9.8% in premarket action after the consumer products company made a $68 billion bid for GlaxoSmithKline‘s (GSK) consumer health business. That bid was the third in a series of offers to acquire the unit, but all were rejected by Glaxo as undervaluing the business. GlaxoSmithKline shares jumped 2.6%.
Houghton Mifflin Harcourt (HMHC) surged 8.3% in the premarket following a Bloomberg report said the education materials publisher is exploring a possible sale of the company. The stock rose 4.5% Friday after the report first surfaced.