Before the Bell: CES Closes; Alibaba, Goldman Sachs, Deere in the News

Premarket action on Monday had the three major U.S. indexes trading higher. The Dow Jones industrials were up 0.29%, the S&P 500 up 0.34% and the Nasdaq 0.30% higher.

All 11 market sectors closed higher on Friday, with materials (3.44%) and technology (2.99%) rising the most. Health care (0.89%) and energy (1.68%) posted the day’s smallest gains. The Dow closed up 2.13%, the S&P 500 up 2.28% and the Nasdaq up 2.56% on Friday.

Trading volume was higher Friday, well above the five-day average. New York Stock Exchange winners led losers by 2,717 to 433, while Nasdaq decliners led advancers by about 3 to 1. Among S&P 500 stocks, First Solar Inc. (NASDAQ: FSLR) added 7.8% following a Thursday rating boost to Overweight at Wells Fargo. On the other side of the earnings coin, Baxter International Inc. (NYSE: BAX) dropped nearly 10% after revealing a plan to spin off its renal care business

December’s nonfarm payrolls report came in higher than expected (223,000 versus 210,000), and the headline unemployment rate fell from 3.6% to 3.5% instead of rising to 3.7%. All of that would indicate further Federal Reserve tightening and falling equity prices. However, hourly earnings rose less than expected (0.3% vs. 0.4%), and the average workweek declined from 34.4 hours to 34.3 hours. These numbers imply that productivity is rising, a good thing, and a reason to expect Fed rate increases to moderate, perhaps as soon as the January 31 meeting.

Economic reports due out this week include the usual weekly reports on new claims for jobless benefits and on petroleum and natural gas inventories. Before markets open Wednesday, the Bureau of Labor Statistics (BLS) will release December’s consumer price index (CPI). On Friday, the University of Michigan’s preliminary January report on consumer sentiment is due.

The Consumer Electronics Show (CES) closed Sunday, after spending a few days pumping up the auto industry. As traditional automakers Ford, Stellantis, Honda, Volkswagen and BMW begin rolling out more all-electric vehicles, cars got most of the attention at this year’s show. But there were a few other product introductions:

  • An $8,500 smart toilet from Numi and a $16,000 model coming later this year from Kohler.
  • The Walt Disney Co.’s (NYSE: DIS) new voice assistant, dubbed Disney’s Magical Companion, that responds in the randomly chosen voice of a Disney character. The gizmo will be available later this year at an unannounced price.
  • New OLED gaming monitors in either flat- or curved-screen models begin at around $1,000 for a 27-inch LG device and run to a 49-inch LG that will set you back about $3,000.
  • Swedish Motorbike maker Cake introduced its Åik electric motorbike with pedals, not pegs, capable of a top speed of 20 mph and a range of around 200 miles, along with a preorder price tag of $6,500.
  • The list goes on, and The Verge has plenty more.

Bloomberg reported late Sunday that Goldman Sachs Group Inc. (NYSE: GS) is about to fire about 3,200 employees beginning this week. Citing unnamed sources, the report noted that the job losses will include trading and banking unit employees. The bank is also expected to reveal when it reports quarterly earnings next week that it will take a pretax charge of more than $2 billion related to its credit card and installment loan business. Goldman currently employs around 49,000 people.

Other Monday morning movers include Alibaba Group Holding Ltd. (NYSE: BABA), which was trading up nearly 5% on news that co-founder Jack Ma is relinquishing control of Ant Group. Alibaba owns about a third of Ant Group, China’s largest fintech company, which failed to get regulatory approval for a 2020 initial public offering. Ma’s withdrawal may revive Ant Group’s IPO hopes.

Farming and heavy equipment maker Deere & Co. (NYSE: DE) signed a memorandum of understanding with the American Farm Bureau Federation on Sunday that allows farmers to repair their own equipment. Deere, like Apple until last year, required owners to get service and repair work done only at authorized shops. According to the Farm Bureau:

[Sunday’s agreement] formalizes farmers’ access to diagnostic and repair codes, as well as manuals (operator, parts, service) and product guides. It also ensures farmers will be able to purchase diagnostic tools directly from John Deere and receive assistance from the manufacturer when ordering parts and products.

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