What’s News in Markets: GM Resolutions, Big Tech, Activist Target
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Hey, your money briefing listeners. I'm Francesca Fontana for The Wall Street Journal. Every week, I write a column for the journal called The Score. It's a look at the biggest stock moves of the week and the news that drove them. And now, every Saturday, we're bringing you what's news in markets. Let's get to it. This week, the stock market finished out the first month of 2024 higher, making January the third straight month of gains. Meanwhile, earnings season is in full swing, with this week's slate of reports including some of the biggest tech stocks. Don't worry, we'll come back to that in a minute. But first, I want to talk about General Motors. Now, GM had a bumpy year in 2023, but the company is aiming to leave all that behind this year, giving a surprisingly optimistic outlook for 2024.
And that's thanks to a few things. One of those is that it's expecting narrower losses on its electric and driverless car businesses. And when I said that GM had a bumpy year last year, a lot of those bumps were related to those two areas. GM's budding EV business was tripped up by manufacturing issues that messed up launch plans of several models. For example, the botched release of an electric Chevrolet Blazer. And GM said it plans to spend about $1 billion less this year on its self-driving car unit called Cruise than it did last year. So those are some resolutions for GM in the new year. And investors seem to share in the optimism, as GM shares jumped nearly 8% Tuesday and held on to those gains throughout the week.
We got earnings results from five of the magnificent seven this week. Those are the tech stocks that have been driving the market in recent months. So let's go chronologically. Alphabet and Microsoft's results came after the bell Tuesday, while meta platforms Amazon and Apple were after the bell Thursday. so markets reacted very differently on the days that followed those earnings results. On Wednesday, we had Alphabet, Google's parent company, leading a retreat in tech shares after its quarterly advertising sales missed expectations. Its shares fell about 7%, making some smaller moves in the days that followed, but ultimately ending the week down. And even Microsoft went down with it, even though Microsoft actually reported its fastest earnings growth in over two years.
Its shares lost about 3% Wednesday, but paired those losses throughout the rest of the week. But Thursday's earnings were the second chance for the other magnificent seven stocks to turn things around for tech. And they did. Meta, the owner of Facebook and Instagram, and Amazon both turned in strong results. Both stocks also jumped in after-hours trading, and Amazon moved steadily higher Friday.
Why did General Motors raise its 2024 outlook and cut Cruise spending?
And Meta was really soaring on Friday, actually, up some 20% during the trading day, thanks to the results and its new first-ever dividend. Apple was left out of the party, though. It did beat expectations for iPhone revenue, but it seems like Wall Street was more focused on its falling sales in China. Apple's stock fell after hours Thursday and was moving lower Friday. Now let's talk about Norfolk Southern. That's one of the biggest railroad companies in the U.S., and you might recognize the name from that train derailment in East Palestine, Ohio last year that released toxic chemicals into the community. And Norfolk Southern has become the target of a group of investors led by activist Ancora, with the goal of overhauling its board and replacing its CEO.
It seems like this investor group is focused on a number of different issues at Norfolk, and a big one is how the company handled that accident last year. Norfolk caught a lot of flak over it, and it also paid literally. The accident has cost the company over a billion dollars, and its stock tanked and hasn't quite recovered. And the activist investors want to turn its performance around. Norfolk's stock rose 9% Thursday on the news, its highest close in nearly a year, and it gave back some of those gains the next day. And now you know what's news in markets this week.
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