Here are the most important news items that investors need to start their trading day:
1. Tech Stocks are Falling
Tech companies are not doing well this week, and it’s affecting the stock market. Big tech companies like Google’s parent company, Alphabet, saw their earnings disappoint, causing their stock to drop by more than 9% on Wednesday.
It went down another 2% before the stock market opened on Thursday. Facebook’s parent company, Meta, also had a drop of nearly 4% in its stock. This is impacting a stock market index called the Nasdaq 100, which mostly includes tech companies.
It was trading more than 1% lower on Thursday morning. Other stock market indices, like the Dow Jones Industrial Average, were down 0.5%, and the S&P 500 was down 0.8%.
2. Ford-Ward Movement
Ford and the United Auto Workers (UAW) union made a tentative agreement on Wednesday. This is the first deal among the big car companies after almost six weeks of worker strikes.
The agreement includes a 25% increase in wages, adjustments for the rising cost of living, and other improvements in the contract for Ford’s 57,000 workers who are represented by the union. The Ford workers who were on strike will go back to work while the agreement goes to UAW leaders for approval and then to the union members for a vote to confirm it.
3. First Pick
Morgan Stanley has chosen its next CEO after a closely watched selection process. Ted Pick will become the new CEO, taking over from James Gorman on January 1. He will also become a member of the bank’s board of directors.
Ted Pick has been with Morgan Stanley for a long time and currently oversees the bank’s operations on Wall Street, including investment banking and trading. It’s not a surprise that Gorman is leaving, and it was already known that his successor would come from within the company.
Gorman will stay with Morgan Stanley as the executive chairman of the board.
4. Meta’s Revenue
The company that owns Facebook, Meta, announced a 23% increase in its earnings for the last quarter, which is the fastest growth rate since 2021. They did better than what financial experts expected, surpassing their profit estimates by more than 70 cents per share.
The number of people using Meta’s services each month, known as monthly active users, was about as much as analysts predicted, at 3.05 billion.
However, Meta’s special unit called Reality Labs, which is focused on the metaverse, had a loss of $3.74 billion in its operations and a 26% decrease in revenue. The company said it expects this unit to have even bigger losses next year.
5. Spoken For
The House of Representatives has a new Speaker. Mike Johnson, a member of the GOP (Republican Party), was chosen as the leader of the Republican-led House on Wednesday. This decision came after two weeks of unsuccessful attempts to replace the former Speaker, Kevin McCarthy.
The Republican Party had three other candidates for Speaker, but disagreements within the party caused all of them to lose. Mike Johnson, who is from Louisiana, is a strong conservative and was involved in Republican efforts to challenge the results of the 2020 election.
The important news for investors is that tech stocks are going down, Ford has reached a labor agreement, Morgan Stanley has a new CEO, Meta’s earnings grew but their metaverse unit lost money, and Mike Johnson is now the GOP’s Speaker of the House.