Month: January 2024

© Reuters. FILE PHOTO: Neuralink logo and Elon Musk photo are seen in this illustration taken, December 19, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

(Reuters) -The first human patient has received an implant from brain-chip startup Neuralink on Sunday and is recovering well, the company’s billionaire founder Elon Musk said.

“Initial results show promising neuron spike detection,” Musk said in a post on the social media platform X on Monday.

Spikes are activity by neurons, which the National Institute of Health describes as cells that use electrical and chemical signals to send information around the brain and to the body.

The U.S. Food and Drug Administration had given the company clearance last year to conduct its first trial to test its implant on humans, a critical milestone in the startup’s ambitions to help patients overcome paralysis and a host of neurological conditions.

In September, Neuralink said it received approval for recruitment for the human trial.

The study uses a robot to surgically place a brain-computer interface (BCI) implant in a region of the brain that controls the intention to move, Neuralink said previously, adding that its initial goal is to enable people to control a computer cursor or keyboard using their thoughts alone.

The implants’ “ultra-fine” threads help transmit signals in participants’ brains, Neuralink has said.

The first product from Neuralink would be called Telepathy, Musk said in a separate post on X.

The startup’s PRIME Study is a trial for its wireless brain-computer interface to evaluate the safety of the implant and surgical robot.

Neuralink did not immediately respond to a Reuters request for further details.

The company has faced calls for scrutiny regarding its safety protocols. Reuters reported earlier this month that the company was fined for violating U.S. Department of Transportation (DOT) rules regarding the movement of hazardous materials.

The company was valued at about $5 billion last June, but four lawmakers in late November asked the U.S. Securities and Exchange Commission to investigate whether Musk had misled investors about the safety of its technology after veterinary records showed problems with the implants on monkeys included paralysis, seizures and brain swelling.

Musk wrote in a social media post on Sept. 10 that “no monkey has died as a result of a Neuralink implant.” He added that the company chose “terminal” monkeys to minimize risk to healthy ones.

Investing.com — Super Micro Computer (NASDAQ:SMCI) raised its annual guidance and reported fiscal second-quarter earnings that beat Wall Street estimates, as the data center hardware maker was boosted by an artificial intelligence-driven surge in demand. 

Shares in the server seller, which counts NASA and Japan’s NEC among its customers, jumped in premarket trading on Tuesday.

The company reported adjusted earnings per share of $5.59 per diluted share on revenue of $3.66 billion, well above analyst estimates of $4.51 and $2.8B. That was also ahead of its most recent second-quarter guidance offered on Jan.18 that called for adjusted EPS of between $5.40 and $5.55 per share. 

For the third quarter, Super Micro expects net sales of $3.7B to $4.1B and non-GAAP net income per diluted share of $5.20 to $6.01. That was ahead of analyst projections for EPS of $4.35 on revenue of $2.93B.

Looking ahead, the firm raised its guidance for full-year revenue to a range of $14.3B to $14.7B from a prior forecast of $10B to $11B.

Scott Kanowsky contributed to this report.

© Reuters. FILE PHOTO: The fuselage plug area of Alaska Airlines Flight 1282 Boeing 737-9 MAX, which was forced to make an emergency landing with a gap in the fuselage, is seen during its investigation by the National Transportation Safety Board (NTSB) in Portland,

By David Shepardson, Valerie Insinna and Tim Hepher

WASHINGTON/DUBLIN (Reuters) – Boeing (NYSE:BA) said on Monday it was withdrawing a request for a key safety exemption that could have allowed U.S. regulators to speed up certification of its coming 737 MAX 7, in the latest fallout from the planemaker’s ongoing crisis.

Lawmakers had been pressuring the planemaker to withdraw the petition following a harrowing mid-air cabin blowout on Jan. 5 that has exposed numerous safety and quality control concerns at one of the world’s two major jetmakers.

No one died in the blowout that left passengers staring at open space 16,000 feet above the ground and forced the pilots to make an emergency landing. But the incident has turned into a full-blown safety and reputational crisis for Boeing that will slow plane production and risks it ceding further market share to Airbus.

The withdrawal, first reported by Reuters, throws the anticipated timeline for certifying Boeing’s MAX 7 and the larger, better-selling MAX 10 into further doubt because it may force Boeing to make design changes more quickly than it had planned.

CEO David Calhoun withdrew the exemption request after being asked to do so in Capitol Hill meetings last week as Boeing grapples with growing safety concerns following the mid-air incident on a 737 MAX 9 jet operated by Alaska Airlines.

After its best-selling MAX family of jets resumed service following two fatal crashes, Boeing had at one point forecast it would win approval for the MAX 7 and 10 by the end of 2022. The head of the Federal Aviation Administration (FAA) has repeatedly declined to put any timetable on approval.

The ongoing delays have set back the fleet plans of major carriers including Southwest Airlines (NYSE:LUV) and United Airlines, the biggest customers for the MAX 7 and MAX 10 respectively.

Boeing’s decision to withdraw the exemption request came ahead of its fourth-quarter results on Wednesday. Shares were down 0.7% in premarket action Tuesday.

The exemption would have allowed the MAX 7 to be certified before making design changes to the nacelle inlet structure and engine anti-ice system to prevent overheating that could lead to severe damage or a failure of the engine inlet inner barrel.

The MAX 10 will also require design changes if an exemption is not sought. A nacelle is the structure that holds an aircraft engine.

Boeing originally proposed the MAX 7 exemption run through May 2026 – the time period the company believed necessary to develop and certify design changes, but approval of the request was thrown into doubt after the Alaska Airlines accident.

“While we are confident that the proposed time-limited exemption for that system follows established FAA processes to ensure safe operation, we will instead incorporate an engineering solution that will be completed during the certification process,” Boeing said in a statement, without providing an estimate of how long that would take.

The FAA deferred comment to Boeing.

DUCKWORTH, CALHOUN CONFER

U.S. Senator Tammy Duckworth, who leads the Senate Commerce Committee’s aviation safety subcommittee, said last week she requested that Boeing withdraw the exemption request during a meeting with CEO Calhoun.

Calhoun called Duckworth about the withdrawal decision, she said in a Monday evening interview with Reuters, adding that he thanked her for pushing the company to do “what is absolutely the right thing to do.”

Duckworth called the withdrawal “probably a tough decision for the shareholders and but also the right decision for the people who will be flying as passengers on the aircraft.”

Before the Alaska accident, Boeing was expected to release a new financial and delivery target for 2024 and provide an update on its forecast for 2025-26, the timeframe in which the planemaker’s operations were expected to stabilize.

Richard Aboualfia of AeroDynamic Advisory said a delay of MAX 10 certification could push customers into the arms of European rival Airbus, further eroding Boeing’s 40% share of the narrowbody market.

United Airlines CEO Scott Kirby (NYSE:KEX) flew to Toulouse recently to inquire whether it could buy A321neo jets to replace MAX 10 order slots, Reuters reported on Sunday.

Dennis Tajer, a spokesperson for the union representing American Airlines (NASDAQ:AAL) pilots, said Boeing’s decision to withdraw the exemption request was good news, but questioned what Boeing and the FAA would do for the MAX 8 and 9 models. “What are they doing about the planes that are flying now?” he said.

The FAA said last year Boeing was developing a design change to fix the problem on the MAX 8 and 9 and it might require it to put it in place on those planes in the future.

U.S. Senate Commerce Committee Chair Maria Cantwell said Boeing’s withdrawal “is good news. I hope this means they can quickly develop a compliant design across other MAX planes.”

Boeing had previously projected 737 production expected to reach 50 jets per month, but that is also in question after the FAA last week announced it would not approve further production rate increases for the 737 MAX.

MANAGEMENT IN FOCUS

Multiple sources told Reuters that industry speculation was swirling about various permutations of leadership changes at Boeing or its commercial division ahead of a U.S. National Transportation Safety Board (NTSB) report due in coming days and what could be a tricky hearing before Congress.

Executives at an Airline Economics conference in Dublin on Monday publicly backed Boeing’s management. “They’re under no illusions about the severity of the situation,” AerCap CEO Aengus Kelly told Reuters on the sidelines of an Airline Economics conference in Dublin Monday.

The door plug that blew out is present on most 737 MAX 9 planes, in place of an exit airlines could have added if they wanted a greater number of seats.

Trade publication The Air Current last week reported that the door plug on the affected MAX 9 reached Boeing’s factory from Spirit AeroSystems (NYSE:SPR) with bolts installed, but that the planemaker re-opened it to give access to nearby rivets that had been mis-installed by Spirit.

Spirit and Boeing referred queries on the probe to the NTSB. The agency’s chair Jennifer Homendy said on Jan. 18 it was too early to say if the root cause of the blowout was missing or mis-installed bolts.

© Reuters. Whirlpool (WHR) slides after missing estimates for 2024 earnings and revenue

(Updated – January 30, 2024 7:04 AM EST)

Shares of Whirlpool Corp. (NYSE:WHR) fell 4.1% in pre-open trade Tuesday after the company’s revenue guidance for 2024 missed Wall Street’s estimates.

Analysts said the weakness in stock is also a result of core North America margin and guide coming in “short of already-low expectations going into the print, while FCF also remains soft.”

“We expect the stock to trade down as a result,” analysts said.

For Q4, Whirlpool reported earnings per share (EPS) of $3.85, topping the consensus projection of $3.54. Revenue came in at $5.09 billion, while analysts looked for $4.98 billion.

The home appliance manufacturer generated $2.88 billion in North America net sales, up 1.3% year-over-year, but missing the expected $2.96 billion.

EBIT stood at $266 million in the quarter, up 56% year-over-year, while analysts were looking for $304.6 million.

Looking ahead, Whirlpool expects 2024 revenue of $16.9 billion, notably below the consensus estimates of $17.68 billion.

Full-year EPS is anticipated to be in the range of $13 to $15, also missing Wall Street’s expectations of $15.34.

Whirlpool projects cash from operating activities to range between $1.15 billion and $1.25 billion, compared to analysts’ estimates of $1.27 billion.

Free cash flow is expected to be in the range of $550 million to $650 million, while analysts called for $888.3 million.

“The strength of our balance sheet, with approximately $1.6 billion cash on hand as we exit the year along with strong cash generation, positions us well to fund approximately $400 million of dividends in 2024 while further reducing debt by $500 million,” said Whirpool CFO Jim Peters.

© Reuters

Investing.com — U.S. stock futures traded marginally lower Tuesday, as investors awaited earnings from a series of tech giants while the Federal Reserve starts its latest two-day policy-setting meeting.

By 06:55 ET (11:55 GMT), the Dow Futures contract was down 65 points, or 0.2%, S&P 500 Futures traded 7 points, or 0.1%, lower and Nasdaq 100 Futures dropped 15 points, or 0.1%.

The main U.S. averages closed higher on Monday, with the Dow Jones Industrial Average and the S&P 500 recording their sixth record closes of the year. The Nasdaq Composite, however, was the star, ending over 1% higher.

Tech giants set to report

This quarterly earnings season is now in full swing, with 19% of the S&P 500 set to report this week, including tech giants Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL) and AMD (NASDAQ:AMD) after the close Tuesday.

Collectively, the market capitalization of Alphabet, Microsoft, Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN) and Meta (NASDAQ:META) account for nearly 25% of the S&P 500, giving them an outsize influence on the performance of the broader index.

Outside of tech, General Motors (NYSE:GM) and United Parcel Service (NYSE:UPS) are among well-known companies sharing results before the bell on Tuesday, while Starbucks (NASDAQ:SBUX) is due after the market closes.

Fed meeting starts

The Federal Reserve starts its latest two-day policy-setting meeting later in the session, and is widely expected to keep interest rates on hold at more than two-decade highs when the meeting concludes on Wednesday.

The Fed signaled in December that it could reduce rates six times this year, and investors will watch for updates out of the meeting for clues as to when the first full quarter-point rate cut arrives.

Tuesday’s economic calendar includes data on JOLTS job openings, which kicks off a week of domestic jobs data, culminating in the January U.S. payrolls report on Friday. The data will give further indications of the state of the world’s largest economy.

Crude steadies amid Middle East tensions

Oil prices steadied Tuesday after the previous session’s losses, as escalating geopolitical tensions in the Middle East fuelled supply concerns.

By 06:15 ET, the U.S. crude futures traded 0.3% higher at $76.98 a barrel, while the Brent contract traded 0.1% higher at $81.91 a barrel.

Crude markets are on edge after the U.S. vowed to take “all necessary actions” to defend its troops following a deadly drone attack in Jordan by Iran-backed militants, potentially resulting in regional energy supply disruptions in the oil-rich Middle East.

The crude contracts fell over $1 on Monday as a deepening real estate crisis fuelled worries about demand from China, the world’s biggest crude consumer.

Additionally, gold futures rose 0.4% to $2,052.45/oz, while EUR/USD traded 0.1% higher at 1.0838.

(Oliver Gray contributed to this article.)

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© Reuters. People visit a currency exchange office in Istanbul, Turkey July 18, 2023. REUTERS/Dilara Senkaya/File Photo

By Joice Alves and Brigid Riley

LONDON/TOKYO (Reuters) – The euro edged lower on Tuesday after data showed the euro zone narrowly avoided a technical recession in the fourth quarter, while the U.S. dollar edged higher, as traders awaited the Federal Reserve’s monetary policy decision this week.

Gross domestic product (GDP) in the 20 countries sharing the euro was flat in the fourth quarter against the previous three months, mainly thanks to strong growth in Spain and Portugal and a modest increase in Italy, while the German economy shrank in the final three months of 2023.

The euro was down 0.05% at $1.0827 against the dollar, as expectations are for a stronger U.S. outlook than in the euro zone, which has led investors to fully pricing in a rate cut by the European Central Bank (ECB) in April.

“For the ECB, today’s figure eases the pressure somewhat, but it is clear that the so-called soft landing being pursued by (ECB President Christine) Lagarde has been somewhat softer than many would have liked,” said Joshua Mahony, Chief Market Analyst at Scope Markets.

The single currency is down about 2% in January.

“Risks remain tilted to the downside for the single currency as long as these rate-cut expectations prevail among investors,” UniCredit analysts told clients in a note.

U.S. DATA, FED IN FOCUS

Data on job openings from the U.S. Department of Labor Statistics due later on Tuesday will in the meantime offer a prelude to the closely watched payroll report to be released on Friday

The dollar index was 0.04% higher at 103.50 as market participants moved cautiously ahead of the two-day Fed meeting that begins on Tuesday.

With the Fed expected to hold interest rates steady, markets will focus on the tone that Fed Chair Jerome Powell strikes at the press conference on Wednesday and any hints of rate cuts in the near future.

“After Fed Chairman Jerome Powell’s dovish comments at the press conference following the last meeting, market participants are likely to be looking for more precise information on the timing of the first rate cut,” said Michael Pfister, FX Analyst at Commerzbank (ETR:CBKG).

Markets are currently pricing in a 46.6% chance that the U.S. central bank will begin cutting in March, dropping from 73.4% a month ago, according to the CME Group’s (NASDAQ:CME) FedWatch Tool, as data has been reinforcing the view that the U.S. economy remains resilient.

Tuesday’s U.S. job opening figures will kick off a week of domestic jobs data, culminating in the January U.S. payrolls report on Friday. The data will give further indications of the state of the world’s largest economy.

Sterling slid 0.24% to $1.2678 ahead of the Bank of England’s monetary policy meeting this week.

The U.S. currency slid 0.15% to 147.27 against the yen.

With Japanese policy normalisation looking more likely in the second quarter, when the Bank of Japan (BOJ) will have additional wage data, the dollar-yen rate will “be more driven by the Fed than any expectations of a policy shift by the BOJ in the short term,” said Wei Liang Chang, currency and credit strategist at DBS.

“We thus expect dollar/yen to ease more pronouncedly towards the end of Q1.”

Japan’s jobless rate fell to 2.4% in December from the previous month, government data showed on Tuesday, just under economists’ median forecast of 2.5% in a Reuters poll.

© Reuters.

Investing.com — U.S. futures hovered broadly around the flatline on Tuesday, with traders gearing up for a flurry of earnings, data, and central bank decisions this week. Artificial intelligence is set to be a major focus in the latest quarterly reports from tech behemoths Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) later today. Boeing (NYSE:BA) scraps an application to speed up the official certification of its upcoming 737 Max 7 jet following heavy scrutiny from U.S. lawmakers.

1. Futures subdued

U.S. stock futures were subdued on Tuesday, as investors awaited the release of fresh earnings from several big-name companies, a bevy of key economic data, and a major Federal Reserve policy decision.

By 05:30 ET (10:30 GMT), the Dow futures contract had shed 44 points or 0.1%, S&P 500 futures had fallen by 2 points or 0.1%, and Nasdaq 100 futures were mostly flat.

The main averages on Wall Street climbed in the prior session, with the benchmark S&P 500 in particular surging by 0.8% to a fresh record high close. The tech-heavy Nasdaq Composite jumped by 1.12% and the 30-stock Dow Jones Industrial Average added 0.6%.

In individual stocks, shares in iRobot (NASDAQ:IRBT) slumped by 8.8% after the robot vacuum maker and Amazon (NASDAQ:AMZN) announced they had mutually agreed to terminate a planned merger due to opposition from EU antitrust regulators. Elsewhere, SoFi Technologies (NASDAQ:SOFI) soared by 20.2% after the online personal finance group posted better-than-anticipated quarterly profit.

2. Microsoft, Alphabet earnings ahead

Tech giant Microsoft and Google-parent Alphabet are set to unveil their latest quarterly earnings after the close of trading in New York on Tuesday, in the first wave of potentially market-moving corporate results this week.

For Microsoft, the figures come after the Redmond, Washington-based company’s stock market value topped $3 trillion for the first time ever last week.

Undergirding this sky-high valuation is Microsoft’s investment in OpenAI, whose ChatGPT chatbot has become one of the focal points of recent growing enthusiasm over generative artificial intelligence. Analysts will likely be paying close attention to any comments from the firm’s executives regarding how they hope to deploy the nascent technology, particularly at its crucial Azure cloud computing division.

Alphabet, meanwhile, has recently launched its own advanced AI play, dubbed Gemini. The YouTube-owner has lauded this model as a sophisticated tool for crunching disparate pieces of information like video, text, and audio, with Chief Executive Sundar Pichai calling it “one of the biggest science and engineering efforts we’ve undertaken.”

AI will also be front-and-center for Advanced Micro Devices (NASDAQ:AMD) when the chipmaker posts results after the bell later today. Analysts already hiked their price target for the semiconductor group earlier this month, citing the benefits of elevated demand for AI-powered chips.

3. Boeing withdraws request for 737 Max 7 safety exemption

Boeing has confirmed that it is withdrawing its request for a safety exemption for a new series of its popular 737 Max planes, as the jetmaker wrangles with the continuing fallout from a dangerous mid-air door plug breach earlier this month.

The exemption would have allowed U.S. regulators to expedite the process of approving Boeing’s upcoming 737 Max 7. Investors had widely anticipated that it would receive the official green light in the first half of this year.

More doubt now surrounds the timeline for the much-anticipated certification of both the Max 7 and Boeing’s larger Max 10. According to Reuters, the company may be forced to roll out design changes more quickly than it had originally planned.

Boeing’s decision also comes after it faced heavy pressure from U.S. lawmakers last week to withdraw its application for the exemption. U.S. Senator and aviation subcommittee chair Tammy Duckworth took a particularly strong stance against the request, arguing that it could have “catastrophic consequences on passenger safety.”

4. BYD shares slip after disappointing profit forecast

BYD (SZ:002594), the Warren Buffett-backed group that recently dethroned Tesla (NASDAQ:TSLA) as the world’s biggest electric vehicle (EV) maker by sales volume, has forecast full-year profit that missed analyst expectations, sending shares lower on Tuesday.

The Chinese EV company said it now expects to report annual profit of between 29 billion yuan and 31 billion yuan, implying a rise of as much as 86.49% versus the prior year. However, the pace would be far slower than its 2022 net earnings growth of 446%.

Analysts at Nomura noted that the outlook was 4% to 10% below their projections, the Wall Street Journal reported, citing a research note.

BYD flagged that it was facing “fierce competition” in China’s EV industry, which has contributed to an intensifying price war among domestic automakers desperate to entice cost-wary consumers. Even still, the Shenzhen-based company said it has demonstrated “strong resilience” to these pressures, adding that it has been boosted by “rapid” expansion in overseas sales and expense reductions in its supply chain.

5. Crude inches up amid Middle East tensions

Oil prices inched up on Tuesday after the previous session’s losses, as escalating geopolitical tensions in the Middle East fueled supply concerns.

By 05:01 ET, the U.S. crude futures contract traded 0.5% higher at $77.13 a barrel, while the Brent contract climbed by $82.15 per barrel.

Crude markets are on edge after the U.S. vowed to take “all necessary actions” to defend its troops following a deadly drone attack in Jordan by Iran-backed militants, potentially resulting in regional energy supply disruptions in the oil-rich Middle East.

The crude contracts fell over $1 on Monday as a deepening real estate crisis contributed to worries about demand from China, the world’s biggest crude consumer.

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© Reuters.

Investing.com — Super Micro Computer (NASDAQ:SMCI) lifted its annual guidance on Monday, following its release of Q2 earnings that exceeded expectations. This positive performance is attributed to ongoing AI-led demand in the data center hardware sector.

The company’s shares saw a significant pre-market increase of over 10% today.

Supermicro reported an EPS of $5.59, with revenue totaling $3.66 billion. These figures considerably surpassed analyst predictions of an EPS of $4.51 per share on revenue of $2.8B. The results also exceeded Supermicro’s own Q2 guidance provided on Jan 18, which forecasted an EPS between $5.40 and $5.55 per share.

For Q3, the IT Solutions provider anticipates net sales to be between $3.7B and $4.1B, with an EPS ranging from $5.20 to $6.01. This projection significantly exceeds analyst estimates of an EPS of $4.35 on revenue of $2.93B.

Looking forward, Supermicro raised its revenue guidance for fiscal 2024 to a range of $14.3B to $14.7B, up from the previous forecast range of $10B to $11B.

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