Here are the most important updates for investors as they start their day of trading:
1. Positive Trends
The Nasdaq Composite and S&P 500 are doing well for the year, almost three weeks into trading. They both saw gains on Thursday. The Nasdaq, mainly driven by Apple, went up by 1.35%, and the S&P 500 increased by 0.88%. The S&P 500 is now only 0.33% away from its highest-ever closing record. Despite a 0.54% gain on Thursday, the Dow Jones Industrial Average is still in the negative for 2024, down by 0.59%.
2. Nelson Peltz and Disney
Nelson Peltz is actively pursuing a position on the Disney board and outlining his vision for the company. The activist investor’s Trian Fund Management officially nominated Peltz and former Disney CFO Jay Rasulo for board seats on Thursday. They’re backed by a detailed five-point plan covering aspects like CEO succession, streaming profits, and studio oversight.
Peltz intends to present his case to shareholders on X, the social media platform formerly known as Twitter. This will be done through a newly created website and a comprehensive white paper, as reported. Trian is unveiling its plans before Disney’s upcoming earnings report and the company’s shareholder meeting this spring.
3. Job Reductions at Macy’s
Macy’s, the department store retailer, is trimming around 2,350 jobs, which accounts for 3.5% of its workforce. Additionally, five mall locations will be shut down. This move is part of a strategy to cut costs and boost sales, which have been slowing down.
The affected stores, located in Arlington, Virginia; San Leandro, California; Lihue, Hawaii; Simi Valley, California; and Tallahassee, Florida, will be closed early this year. A spokesperson for the company mentioned that Macy’s is getting ready to implement a new strategy to adapt to the changing needs of consumers and the marketplace, aiming to become a more efficient and streamlined company.
4. Investing in AI Chips
Meta is acquiring Nvidia’s high-performance H100 graphics cards, which are powerful chips supporting generative artificial intelligence (AI). This move by Meta is expected to involve a substantial investment, likely reaching into the multibillion-dollar range.
The H100 chips have gained significant popularity as corporate America has shown increased interest in generative AI. Analysts at Raymond James estimate the cost of these chips to be around $25,000 to $30,000. Meta aims to use these chips to drive its future advancements in AI, particularly in research related to large language models.
5. Insights from Davos
American business leaders at this year’s Davos conference share a common belief: Donald Trump might make a comeback to the White House in 2024. U.S. attendees at the annual World Economic Forum in Switzerland don’t seem overly concerned about this possibility, while their international counterparts express more apprehension.
One U.S. business executive, speaking that, mentioned, “I’m not sure Europeans understand how weak executive orders are,” and added, “It’s right to be cautious, but it won’t be the end of the world.”
However, it’s worth noting that Davos has been known to provide predictions that don’t always align with reality in the past. The summit has, at times, incorrectly emphasized the risk of recession and downplayed the threat of Covid. Therefore, even if Davos is predicting a Trump return in 2024, that forecast may not hold true beyond Switzerland.
Nasdaq and S&P 500 are doing well, Macy’s is cutting jobs to improve sales, Meta is investing big in AI chips, and there’s talk at Davos about Trump returning. But, be cautious, as Davos predictions haven’t always been accurate in the past.