5 Things to Know Before the Stock Market Opens
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News of the day for May 6, 2024
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Apple (AAPL) shares are in focus after news that Berkshire Hathaway (BRK.A), (BRK.B) slashed its stake in the tech giant, while Warren Buffett's investment firm also announced a record cash pile; Palantir Technologies (PLTR) shares are rising ahead of the company's quarterly results after the closing bell, with its AI-driven sales at its commercial operations in investors' sights; Paramount Global (PARA) shares are gaining as it reportedly opens negotiations with a bidding group led by Sony Pictures Entertainment and private-equity firm Apollo Global Management after its exclusive discussions with Skydance lapsed; Starbucks stock is rising as former head Howard Schultz calls on the coffee giant to right itself; and strong orders for its first cheap model are driving up Li Auto (LI) American depositary receipts (ADRs). U.S. stock futures are rising after Friday’s U.S. jobs data saw fewer jobs added than expected, taking the pressure off inflation and raising hopes that the Fed could be closer to cutting interest rates. Here’s what investors need to know today.1. Apple in Focus After Berkshire Slashes StakeApple (AAPL) shares are in focus following news that Berkshire Hathaway (BRK.A), (BRK.B) slashed its stake in the tech giant in the first quarter. Berkshire's stake fell 13% during the first quarter, a far bigger reduction than in the previous quarter, although the tech giant remains its biggest stock holding and the investment firm Apple's single largest shareholder. Berkshire chairman and Chief Executive Officer (CEO) Warren Buffett praised Apple at the company's annual meeting in Omaha Saturday, saying it would likely remain the company's largest holding. The Apple news came as Berkshire reported another record cash holding and strong gains in its stock portfolio, with Buffett paying homage to long-time business partner Charlie Munger, who passed away in November, at the annual meeting. Buffett said he and his colleagues didn’t know what to do with the cash pile for now, noting that “we only swing at pitches we like." Apple shares were down 0.3% in premarket trading.2. Palantir Rises Ahead of Earnings ReportPalantir Technologies (PLTR) shares are up more than 3% in premarket trading ahead of the company's first-quarter earnings report after the closing bell Monday. Analysts expect earnings will be higher over the year on the back of surging demand for its artificial intelligence (AI)-driven software at its burgeoning commercial business. Analysts project revenue at Palantir, whose stock is up 36% this year, to be $615.32 billion with net income of $83.94 million, or 3 cents per share. In focus will be whether the data analytics firm, which makes the bulk of its sales from government contracts, can sustain the growth in its commercial segment. 3. Paramount Gains on News Apollo, Sony Start $26B Cash Takeover Talks Paramount Global (PARA) shares are rising more than 3% in premarket trading after it reportedly decided to open negotiations with a bidding group led by Sony Pictures Entertainment and private-equity firm Apollo Global Management after a period of exclusive talks with the Hollywood studio Skydance lapsed on Friday night. A special committee of Paramount’s board of directors met Saturday and signed off on beginning deal talks with Sony and Apollo, which last week submitted a nonbinding letter of interest offering to buy the company for around $26 billion in cash, The New York Times reported, citing people familiar with the matter. Paramount, the owner of Nickelodeon, MTV, CBS and Paramount Pictures, has been exploring a deal as it faces industrywide headwinds, including the decline of cable TV and the unprofitability of its streaming business.4. Starbucks Rises as Former CEO Schultz Says Coffee Giant Should Fix ItselfShares in Starbucks (SBUX), which tumbled following a disappointing quarterly earnings report last week, are rising in premarket trading after former CEO Howard Schultz said in a LinkedIn post that the coffee giant should start fixing its business by improving its U.S. operations, which were “the primary reason for the company’s fall from grace.” Schultz, who remains one of the company’s largest shareholders, said “senior leaders—including board members—need to spend more time with those who wear the green apron,” and improve the mobile ordering and payment platform, noting he was confident the embattled China business would recover.5. Li Auto Surges as Chinese EV Maker Posts Strong Demand for Cheaper Car American depositary receipts (ADRs) of Li Auto (LI) are surging 7% in premarket trading after the Chinese electric vehicle (EV) maker reportedly said that orders for its newly launched cheapest model, the L6, had exceeded 41,000 units. The EV is priced at under 300,000 yuan, or around $41,452 each. Shares had slumped last week after the company reported that its April deliveries were just up 0.4%. Read the original article on Investopedia.
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