Daily US Equity Opening News - Biden to tighten restrictions on China semiconductors; MSFT antitrust probe; Canada sues GOOG

NOTE: Given the early US market closures today, we will be running a normal service until 18:15GMT/13:15EST, upon which the desk will close.

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  DAY AHEAD: On today's CRA slate, traders will be watching S&P's review on France (currently AA-) amid its recent budget woes; Moody’s is set to review Hungary (Ba1); DBRS will review Germany (AAA) and Spain (A).

EQUITY NEWS:

NOTE: In today's edition, we recap on major equity news from the close on Wednesday, on account of the Thanksgiving Holiday on Thursday.

TECH:

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  Semiconductors - The Biden administration plans to tighten restrictions on semiconductor and AI memory chip sales to China, targeting Beijing's tech ambitions, Bloomberg reports. Measures are said to be less severe than earlier proposals; the proposed restrictions are expected to exclude some suppliers to Huawei and may allow companies like Micron (MU), Samsung (SSNGY), and SK Hynix (HXSCL) to maintain certain sales in China; the details may be finalised next week, the report added. The US also added 100 firms to its entity list, including Huawei partners.


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  TSMC (TSM) - TSMC plans to start manufacturing its 2nm process in the US around 2028, following mass production in Taiwan starting in 2025, according to reports in the Taiwanese press. This timeline is in keeping with Taiwan's policy, which restricts TSMC from investing in advanced technologies abroad until three years after domestic production begins.


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  Intel (INTC) - Said its deal for USD 7.86bln in US government subsidies restricts the Co.s ability to sell its stake in its chipmaking unit if it becomes an independent entity.


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  Microsoft (MSFT) - The US FTC has launched a detailed antitrust investigation into Microsoft, focusing on its cloud computing, software licensing, cybersecurity, and AI businesses, Bloomberg reports. The inquiry follows extensive interviews with competitors and partners and includes a comprehensive information request.


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  Micron (MU) - Micron has ramped up its recruitment in South Korea, focusing on university campuses with "on-the-spot hiring" initiatives. Previously targeting experienced engineers from companies like Samsung (SSNGY), Micron is now aiming to attract fresh talent to strengthen its workforce in the region, DigiTimes reports.


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  Germany Semiconductors - The German government plans to invest around EUR 2bln in its semiconductor industry to strengthen Europe's chip supply chain, Bloomberg reports. The funds will support advanced production capacities. This follows Intel's (INTC) delay of its EUR 30bln chip factory in Magdeburg.


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  PC Sales - Acer's chairman expects AI PC pricing to reach an optimal point by Q3 2025, which should stimulate demand for replacements, DigiTimes reports. Despite initial slow sales, he predicts a surge once the pricing aligns with market expectations.


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  SK Hynix (HXSCL) - SK Hynix has started mass production of its 321-layer 1Tb TLC 3D NAND Flash products, increasing competitive pressure on Samsung (SSNGY), according to DigiTimes. This move has raised market attention, as SK Hynix aims to challenge Samsung's dominant position in the NAND flash market.


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  STMicroelectronics (STM) - STMicroelectronics announced a strategic collaboration with Hua Hong Semiconductor, China's second-largest foundry, defying broader industry trends, DigiTimes reports. This move comes amid global economic uncertainties and geopolitical shifts, as STMicroelectronics seeks to strengthen its position in the semiconductor sector.


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  MicroStrategy (MSTR) - There are unverified reports suggesting that MicroStrategy could be included in the Nasdaq 100 (NDX) index following its reconstitution (to be announced on November 29th); the updated list of stocks is set to take effect after December 20th. Please note, that Newsquawk has been unable to verify this rumour.


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  First Solar (FSLR) - US trade officials are expected to announce a new round of tariffs on solar panel imports from four Southeast Asian nations after American manufacturers complained that companies there are flooding the market with unfairly cheap goods.

COMMUNICATIONS

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  Interpublic Group (IPG), Publicis Groupe SA (PUBGY) - French marketing giant Publicis is reportedly exploring a takeover of US rival Interpublic Group, valued at USD 11.4bln. The speculation follows earlier reports linking Interpublic to potential European buyers, possibly involving private equity collaboration.


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  Alphabet (GOOG) - Canada's Competition Bureau has sued Google for alleged anti-competitive practices in online advertising, Reuters reports. It seeks penalties and the sale of two ad tech tools, citing Google's abuse of market dominance. Google denies any wrongdoing.


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  Alphabet (GOOG), Samsung (SSNGY) - Reports cited by DigiTimes suggest that OpenAI is in talks with Samsung Electronics about integrating ChatGPT into its devices, potentially following a similar strategy to Apple (AAPL). The report said it raises questions about Samsung's existing relationship with Google, which already powers many of its devices.


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  Australia Social Media Ban - Australia has passed a law banning under-16s from using social media, enforceable through fines of up to AUD 50mln for non-compliance, BBC reports. Meta Platforms (META) criticised Australia's ban for rushing legislation without youth input, despite widespread support. Critics have questioned enforcement, privacy implications, and the potential for circumvention via tools like VPNs, and reduced societal participation for young Australians.


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  Reddit (RDDT) - Ramping up efforts to attract additional users outside of the US, targeting countries like India and Brazil as it seeks to open up new advertising opportunities, CNBC reports. The COO said other platforms have 80-90% of users outside of the US, while Reddit has about half of current users based internationally.


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  Meta Platforms (META) - Plans to build a USD 10bln subsea cable spanning the world.

CONSUMER DISCRETIONARY

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  Thanksgiving Sales - US online Thanksgiving sales rose by +4% Y/Y in 2024, surpassing last year’s +2% growth, driven by early and bold discounts, Reuters reports. Salesforce (CRM) projects Cyber Week global sales of USD 311bln, while holiday shopping growth slows to its weakest in six years, the report added. Meanwhile, Adobe (ADBE) analytics notes Consumers spent a record USD 6.1bln online on Thanksgiving, up 8.8% Y/Y; expecting consumers to spend a record USD 10.8bln online for Black Friday (+9.9% Y/Y); Cyber Monday will remain the year's biggest shopping day, driving a record USD 13.2bln in spend (+6.1% Y/Y).


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  Amazon (AMZN) - Amazon is developing its own video AI model to reduce reliance on Anthropic, The Information reports. The move highlights Amazon's strategy to strengthen its AI capabilities and maintain independence in its tech operations. Separately, Amazon employees in over 20 countries, including the US and UK plan to hold protests or go on strike between Black Friday and Cyber Monday, NBC reports.


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  Toyota (TM), Volkswagen (VWAGY), Hyundai (HYMTF) - India plans to extend electric vehicle incentives to automakers at existing factories, not just new plants, Reuters reports. It will also set minimum revenue targets for production lines to qualify for the scheme, aiming to attract investment from companies like Toyota, Hyundai, and Volkswagen.


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  Japan Automaker Sales - Toyota (TM) October group global vehicle output fell 0.8% Y/Y to 893.1k units and sales rose 0.4% Y/Y to 974.2k units; Nissan (NSANY) October output fell 6.3% Y/Y to 290.8k units and sales fell 2.7% Y/Y to 271.5k units; Honda (HMC) October vehicle output fell 15.9% Y/Y to 340.8k units.


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  Delivery Hero (DELHY) - Delivery Hero SE has set the IPO price for Talabat Holding at AED 1.60 per share, the top of its range, making it the UAE's largest IPO this year, Bloomberg reports.


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  Rivian Automotive (RIVN) - A WSJ editorial criticised the Biden Administration’s USD 6bln loan to struggling EV maker Rivian. It says that despite initial hype, Rivian’s valuation has dropped significantly, and the WSJ warns taxpayers could bear the cost of this government-backed support for a financially unstable firm. Separately, Rivian Chairman Robert Scaringe sold 83,334 shares for a total of USD 937,508.


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  Stellantis (STLA) - Reducing output in Italy starting next week, citing waning EV sales in Europe and poor demand for luxury cars in the US and China, Bloomberg reports.


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  Renault (RNLSY) - Trying to strengthen its footprint in China, a country where it doesn't sell cars, Bloomberg reports.

FINANCIALS

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  Direct Line Insurance (DIISY), Aviva (AVVIY) - Direct Line rejected a GBP 3.28bln takeover bid from Aviva, calling it "highly opportunistic" and undervaluing the company. Aviva's proposal offered cash and shares; according to British takeover rules, Aviva has until December 25th to make a firm offer or walk away. FT reports that Aviva has now approached Direct Line shareholders directly after its takeover bid was rejected; the proposal valued Direct Line at 250p per share, a 60% premium; some analysts have suggested that a higher bid may be needed. Separately, Goldman Sachs (GS) has switched sides to advise Aviva on its bid for Direct Line, just months after helping Direct Line fend off an offer from Ageas, Bloomberg said.


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  BlackRock (BLK) - BlackRock is set to acquire private credit manager HPS Investment Partners for approximately USD 12bln, the FT reports. The deal, to be finalised after the Thanksgiving break, reflects BlackRock’s focus on expanding in higher-fee alternative investments, following recent acquisitions in infrastructure and private market data, the report added.


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  Bank of America (BAC) - Bank of America plans to double its revenue and client base in Mexico over five years, driven by nearshoring trends, despite tariff threats from President-elect Trump, Reuters reports. The bank views Mexico's economic integration with North America as irreversible.


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  Coinbase (COIN) - Chief Legal Officer Paul Grewal sold 7,104 shares for a total of USD 2.19mln; Chief People Officer Lawrence Brock sold 15,858 shares for a total of USD 4.74mln.


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  Standard Chartered plc (SCBFY) - Standard Chartered's global head of M&A advisory Tom Willett is leaving after 12 years, Bloomberg reports. His departure follows a September restructure that merged global credit markets and M&A advisory under Henrik Raber, now head of M&A.


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  Citi (C) - Will complete a split next week of the systems that underpin Banamex from the rest of its Mexican operations, according to WSJ. CEO is moving closer to a spin-off of Banamex.


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  HSBC (HSBC LN) - Pulling back from its credit card business in China eight years after its launch, due to a struggle in expansion and profitability, Reuters reports.

MATERIALS

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  Anglo American (NGLOY), BHP Group (BHP) - BHP's need for copper prompts speculation of fresh Anglo bid, FT reports. As of Friday, BHP can launch another takeover for Anglo as the six-month standstill from the last offer has now expired, the report adds.


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  Heidelberg Materials (HDELY) - Heidelberg Materials has acquired Giant Cement Holding for approximately USD 600mln, aiming to strengthen its presence in the Southeastern US and New England markets. The deal, seen closing in Q1 2025, is expected to contribute USD 60mln in EBITDA in its first year, excluding further synergies.


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  Thyssenkrupp (TKAMY) - German Chancellor Scholz urged Thyssenkrupp to reconsider its planned job cuts in its steel division. He also reaffirmed the government's commitment to capping energy grid charges for energy-intensive companies and promoting climate-friendly production.


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  Glencore (GLNCY) - Glencore and Merafe Resources have partnered with Pele Green Energy to build a USD 116mln, 100 MW solar plant in South Africa’s Free State, Bloomberg reports.

INDUSTRIALS

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  Pony.ai (PONY) - Chinese autonomous driving firm Pony.ai debuted on Nasdaq under the ticker "PONY," raising up to USD 452mln.


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  Lockheed Martin (LMT) - Lockheed Martin received a USD 579mln contract modification under Foreign Military Sales with Japan’s Ministry of Defense, to support the development, testing, and integration of equipment for the Aegis System Equipped Vessel.


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  RTX (RTX) - RTX received a USD 196.7mln contract modification for the Global Positioning System Next Generation Operational Control System.

ENERGY

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  Exxon Mobil Corp (XOM) - A US National Labor Relations Board administrative law judge ruled Exxon's 10-month-long lockout of some 600 union workers at a Texas oil refinery during a contract dispute was legal.


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  Repsol (REPYY) - Repsol has reached a deal for the sale of Repsol Colombia Oil & Gas Ltd to Geopark for USD 530mln.

HEALTHCARE

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  Johnson & Johnson (JNJ) - Janssen Research & Development received FDA orphan designation for its multiple myeloma treatment.


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  Gilead (GILD) - Gilead's Phase 3 PURPOSE 2 trial data, published in NEJM, showed that twice-yearly lenacapavir for HIV pre-exposure prophylaxis (PrEP) reduced HIV infections by 96% compared to background incidence. It was superior to daily Truvada and well-tolerated, with no significant safety concerns. Similar results were seen in the PURPOSE 1 trial.


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  Eisai Co. (ESAIY), Biogen (BIIB) - Eisai and Biogen launched Leqembi in South Korea, following approval from the Ministry of Food and Drug Safety in May.


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  Applied Therapeutics (APLT) - Announced that the US FDA declined to approve its drug to treat galactosemia, a rare genetic metabolic disease.

29 Nov 2024 - 14:01- Data- Source: Newsquawk