In a slightly choppy week for Wall Street, as December’s inflation reading came in ahead of expectations at 3.4%, US stocks were ultimately dragged higher by the big tech firms which powered the markets in 2023.
Positive comments from Nvidia (NVDA:NASDAQ) chief financial officer Collette Kress and news of three new graphics chips helped propel the company to double-digit gains for the week.
Cyber security firm Palo Alto Networks (PANW:NASDAQ) was also in demand and the manufacturer of the da Vinci robotic surgical devices, Intuitive Surgical (ISRG:NASDAQ), was higher as it beat expectations with its fourth quarter numbers.
On the other side of the ledger Paramount Global (PARA:NASDAQ) fell amid whispers there might not be a bidder for the company after all, despite earlier speculation over a merger with Warner Bros. Discovery (WBD:NASDAQ).
BOEING
CEO David Calhoun is feeling the heat following the latest bout of turbulence for aerospace company Boeing (BA:NYSE).
Shares in the embattled airplanes maker tumbled almost 10% this week after a part of one of its jets blew out in the middle of an Alaska Airlines flight on 5 January, shortly after the new 737 Max 9 had taken off from Portland, Oregon. The terrifying incident forced an emergency landing although amazingly, no serious injuries were reported.
Weeks before the door plug blew out, workers at the part’s manufacturer Spirit AeroSystems (SPR:NYSE), whose shares slid 12.8% to $27.6 this week, had allegedly flagged safety concerns to management but their pleas fell on deaf ears. Calhoun has stressed his charge must acknowledge ‘our mistake’ and
Boeing is cooperating with the Federal Aviation Administration and National Transportation Safety Board’s investigations into whether Boeing failed to ensure certain aircraft were safe for operation. Part of a duopoly with high-flying Airbus (AIR:EPA),
Boeing faces its biggest safety crisis since two of its Max 8 jets crashed, in 2018 and 2019 respectively, killing hundreds of people. The tragedies saw Boeing’s 737 Max jets grounded across the world for the best part of two years.
MODERNA
Downtrodden biotechnology firm Moderna (MRNA:NASDAQ) released positive news on 8 January after revealing better than anticipated preliminary 2023 Covid vaccine sales of $6.7 billion.
The preliminary figures come after the vaccine maker said as recently as November that it expected to generate sales at the bottom end of its forecast range between $6 billion and $8 billion.
The company said it gained share in the US Covid-19 vaccine market from rival Pfizer (PFE:NYSE) to take its haul to 48% from 37% in 2022.
Looking ahead Moderna said it expects to return to sales growth in 2025 and breakeven in 2026 following new product launches. Regulatory approvals for the firm’s RSV (Respiratory Syncytial Virus) vaccine are expected in the first half of 2024 while it is also seeking approval for its seasonal flu shot.
Weak sales of the mRNA Covid vaccine have dragged on the shares which have fallen 42% over the last year compared with a 36% gain for the Nasdaq Composite Index.
APPLE
If investors are hoping that Apple’s (AAPL:NASDAQ) mixed-reality headset is the new product line to rev up growth, they may be disappointed. The Cupertino tech giant finally set a 2 February 2024 launch date for the Vision Pro, first talked up last summer.
It is the first major new product to be released by Apple since the Watch in 2015 with a suitably slick trailer showing flashy eye-tracking navigation technology, gesture control and immersion gradient selection.
Yet the product is already facing challenges, with the Financial Times reporting that Apple has more than halved its original 2024 production forecasts of an estimated one million units to 400,000. At $3,500 a pop, little wonder.
We can probably expect some sort of boost to Apple’s service business through extra app revenue yet is difficult to see this as more than am expensive toy for the wealthy with little scope for Vision Pro to move Apple’s sales needle. This would explain why most analysts and investors largely shrugged off the announcement earlier this week, while the shares did nothing at all.
