Read the top 5 market news this Wednesday

Ford shares rise after the automaker outlines plans to deliver a supplemental dividend to shareholders, while Snapchat shares fall due to weaker-than-expected Q4 revenue at the social media company.

ESPN, Fox and Warner Bros release a joint venture (joint venture) to create a new streaming of sports. NYCB (New York Community Bancorp) overall credit rating is cut to status “trash” by Moody's, causing the US regional creditor's shares to reach their lowest point since 1997. In Brazil, expectations for the release of Bradesco's balance sheet (BVMF:BBDC4) and Inter.

1. Futures down

US stock futures were muted on Wednesday (Feb 7, 2024) as investors weighed a series of corporate earnings and fresh comments on interest rates from Federal Reserve policymakers.

At 8am (Brasília time), the contract Dow futures lost 0.1%, S&P 500 futures fell 0.05% and the Nasdaq 100 futures it was stable.

Wall Street's main averages ended slightly higher on Tuesday (Feb 6), after spending most of the session in the red.

The benchmark S&P 500 rose 0.2%, following a rise in shares of GE HealthCare (NASDAQ:GEHC) Technology, which reported stronger-than-expected Q4 earnings. The healthcare sector of the S&P 500, an index that tracks the sector, subsequently jumped to a new all-time high.

Despite facing pressure from a decline in chip stocks – particularly Rambus (NASDAQ:RMBS), based in California – the heavy technology sector Nasdaq Composite gained 0.1%. O Dow Jones Industrial Average rose 0.4% on hopes that solid demand for air travel would boost airlines.

Comments from Cleveland Fed President Loretta Mester and Minneapolis Fed President Neel Kashkari dented sentiment.

Mester said an uncertain inflation outlook clouded the timing for possible rate cuts, while Kashkari argued that the central bank's struggle to tame high inflation “It’s not finished yet.”

Both echoed a similar recent stance taken by Fed Chairman Jerome Powell, which all but dashed hopes of an imminent reduction in borrowing costs.

Ford Motor (NYSE:) sharesF) rose in US pre-market trading this Wednesday (Feb 7), after the automotive giant revealed a revenue outlook that exceeded analysts' expectations and promised to return more money to interested parties.

Michigan-based Ford gave guidance for annual pretax income of $10 billion to $20 billion, above Bloomberg consensus estimates of $9.5 billion.

The company added that it would deliver a supplemental dividend of $0.18 per share for Q1, along with a regular payment of $0.15.

But executives told analysts they were slowing investment in next-generation electric vehicles due to price increases that hurt demand for combustion-free cars last year.

Elsewhere, Snap shares plunged more than 30% after the social media group reported quarterly revenue of $1.36 billion, missing projections.

Unlike larger rivals like Meta Platforms (NASDAQ:GOAL), owner of Facebook, the Santa Monica-based company has struggled to overcome a drop in digital advertising spending during a period of tighter financial conditions.

Snap, which detailed plans to lay off 10% of its workforce earlier this week, signaled that its operating environment has been “challenger”.

A parade of company results continues today, highlighted by big names like media titan Walt Disney (NYSE:DIS), ride-sharing company Uber Technologies (NYSE:UBER) and chip designer Arm Holdings (NASDAQ:ARM).

2. ESPN, Fox and Warner Bros. Discovery

Walt Disney's ESPN, Warner Bros. Discovery and Fox said they plan to team up to launch a new streaming service that will offer lucrative live sporting events.

The as-yet-unnamed joint venture will bring together each group's sports networks, certain direct-to-consumer sports services and sports rights, according to a statement from the companies.

They said that the platform aims to provide a “new and different experience”especially for sports fans who are ditching pay television for streaming options.

The companies noted that they would each have an equal one-third stake in the joint venture, adding that independent management would oversee the service. No price has been revealed.

Cord-cutting and weak pay-TV demand have increasingly persuaded media groups to consider moving their prized sports portfolios out of traditional — and expensive — cable packages.

“This new product […] will help prove how many families who have cut the cord would like to subscribe to a lower-priced, sports-centric package.”said analysts at Morgan Stanley (NYSE:MS) in a note.

3. Moody's Downgrades

NYCB's (New York Community Bancorp) long-term and select short-term issuer ratings were downgraded to status “trash” by Moody's, causing the regional bank's shares to fall in the pre-market this Wednesday (7.Feb).

The stock, which had already fallen more than 50% since the bank reported steep home loan losses last week, hit its lowest level in more than 2 decades after the announcement.

Moody's said the decision stemmed from issues related to “financial, managerial and risk management” of NYCB, adding that the mid-sized lender did not have sufficient provisions to cover potential loan losses. The mid-sized lender has also been under scrutiny following the recent departure of its chief risk officer.

NYCB's troubles threatened to reignite concerns about regional lenders' exposure to a post-pandemic drop in commercial property values. In turn, NYCB stated that it is taking “decisive measures” to strengthen its balance sheet and reinforce risk management processes.

4. Oil prices rise

Oil prices rose slightly in European trade on Wednesday (Feb 7), as investors sought more information on US production and inventories from official data to be released later in the day, while the focus remained in the ongoing ceasefire negotiations in the war between Israel and Hamas.

Forecasts of a possible drop in U.S. production from record highs spurred some strength this week in oil prices, which were otherwise recovering from steep losses fueled by speculation about an end to oil disruptions. Middle East.

A weaker dollar also provided some relief to oil prices, with the dollar pulling back from near 3-month highs reached earlier in the week. The dollar's strength was mainly driven by expectations of higher interest rates for longer in the US.

Crude oil futures contracts Brent due in April gained 0.64% to $79.09 per barrel, while crude oil futures West Texas Intermediate rose 0.7%, to US$ 73.82 per barrel, at 8 am (Brasília time). Both contracts fell more than 7% each last week.

5. Bradesco and Inter release balance sheets today

The Brazilian stock exchange was boosted yesterday by the advance in shares of Itaú Unibanco, which reported better-than-expected quarterly data, as well as other financial institutions, notably Bradesco, which soared more than 6%.

The Brazilian earnings season continues this Wednesday (Feb 7) with the release of quarterly data from Bradesco, before the opening, and Inter, after the closing.

In the 4th quarter, Bradesco's recurring net profit totaled R$2.878 billion, an annual increase of 80.4%, but a worsening of 37.7% compared to the 3 immediately previous months.

The indicator totaled R$16.3 billion in 2023, a drop of 21.2%, affected by expenses with provisions and contraction in the financial margin with customers.

The expanded credit portfolio was stable in the quarter, as was delinquency from 15 to 90 days. Over 90 days was 5.1%, a quarterly improvement of 0.5 percentage points. The Basel Index reached 13.2%, an increase of 0.8 percentage points per year.

“In operational terms, we saw default rates above 90 days reach their peak in June 2023 and begin to gradually fall from then on. This trend should continue in 2024. Because of this, the cost of credit was still high in 2023, but it should show gradual improvement this year and in the following years”highlighted Bradesco in an earnings release.

Both the financial margin, service revenue and operating expenses showed worse trends on an annual basis in the 4th quarter and in the year as a whole.

At 8:01 am (Brasília time), the ETF ETF (NYSE:EWZ) rose 0.98% in pre-market.

With information from Investing Brazil.