Markets up, Wynn, Plug, Tesla fall: Top Stories
The Dow Jones Industrial (^DJI) and NASDAQ (^IXIC) saw an uptick Friday morning, shrugging off recent comments from Federal Reserve Chair Jerome Powell about leaving the door open for future interest rate hikes to continue to battle inflation. The gains may be short-lived as the University of Michigan consumer sentiment for November showed the index came in at 60.4 this month, below the expected 63.7 by economists and one of the lowest measurements since May.
Wynn Resorts (WYNN) is down over 5% Friday morning as news of lower-than-expected revenue from Chinese markets for the third quarter. In addition, The Culinary Workers and Bartenders Union, representing about 5,000 employees, has reached a tentative agreement with Wynn. The agreement includes the biggest wage increase ever negotiated in the union’s 88-year history, according to the union.
Shares of Plug Power (PLUG) are diving over 35% as the company's third-quarter report mentioned "unprecedented supply challenges". In a filing late Thursday night, The company projected that "existing cash and available for sale and equity securities will not be sufficient to fund operations through the next 12 months." causing serious doubts about the future of the company.
Tesla (TSLA) received another lowered rating, this time from HSBC (HSBC). Analyst Michael Tyndall reduced his price target to $146, citing CEO Elon Musk as a "risk" for the company, along with a longer timeline to see profits from current innovations.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Video Transcript
- Let's get you up to speed on the market action that we're tracking so far this morning. Taking a look at the Dow here, up about 0.4% on the day, as we also take a look at what we're seeing with the NASDAQ that's up about 1% on the day. And then as we look at the S&P 500 also in the green there as we can see, up about almost about 0.6% there. And as we look, stocks looking to claw back those gains at the end of a very busy week. On Thursday, rising bond yields took the wind out of the S&P's uptrend. Comments from Fed Chair Jay Powell didn't help matters either. Powell spooked investors and derailed an eight day rally by saying the central bank is not confident it has done enough to battle inflation.
Now we've also got a fresh reading on consumer sentiment and it's not looking great. The University of Michigan sentiment index dropped to 60.4-- that's a six month low. US consumers long-term inflation expectations jumped to the highest since 2011. Let's also check in on what we're seeing with some of our trending tickers this morning, starting off with Macau that continues to be a problem for Wynn Resorts. That's one of our top trending tickers currently down about 5.7% on the day.
Revenue in China came up short of expectations once again in the third quarter. Revenue from the gambling and entertainment hub was about seven times higher than a year ago, but regardless, the results didn't impress Wall Street, analysts saying the return of gambling to China is not happening as quickly as expected. Now this isn't the only headwind for the Casino operator. Unions representing workers in Las Vegas have also been negotiating for seven months for higher wages. And while competitors MGM Resorts International and Caesars Entertainment have reached a tentative deal, Wynn has failed to do so.
Let's also check in on what we're seeing with shares of Plug Power this morning, really needing a charge, nosediving after a weak third quarter report, where it warned of quote, "unprecedented supply challenges and some high-profile downgrades." Fuel cell systems and related equipment fell over 8% on the year. JP Morgan said the downgrade reflected an increased risk profile. And after results illustrated numerous near-term challenges, the business manufacturers fuel cells using hydrogen, and count Amazon and Walmart as some of its top competitors.
Also taking a look at Tesla, another poor rating for Tesla, HSBC Global initiating coverage with a reduced rating and a $146 price target. In their note, analysts called Elon Musk both an asset and a risk, noting he is a charismatic CEO with a cult-like following, who feeds into the innovator narrative. Now the analyst also pointing out that there might just be too much hope in Tesla's share price. Now, the company's many ambitious projects from its long-delayed driverless systems to its humanoid robots have not yet come to market. Quote, "the ideas need to become a reality to support the current share price," the analysts said.
Also taking a look at what we're seeing with Novo Nordisk. Now that's going full steam ahead in the race to win the weight loss drug market. The Danish drug maker saying it will spend $6 billion to boost production in the nation. The plan, a new 170,000 square meter factory at the company's existing facilities. Now, the factory will make products for chronic diseases. That includes diabetes treatments Wegovy and Ozempic. The big picture here, annual sales of obesity drugs expected to hit $100 billion within 10 years.
