Brandon Bell
U.S. stock index futures on Thursday seesawed after the latest consumer price inflation report showed a slightly hotter-than-expected rise in the headline number. Cryptocurrencies continued to grab a chunk of the spotlight following a long-awaited approval of bitcoin (BTC-USD) exchange traded funds. Here are some stocks to watch on Thursday:
- Shares of Hertz Global (HTZ) slipped more than 3% ahead of the opening bell, after the car rental company said it would reduce about one-third of its global electric vehicle (EV) fleet by selling about 20K EVs in the U.S. Hertz (HTZ) expects to use a portion of the proceeds from the sale to buy internal combustion engine vehicles to meet customer demand. The sale will also result in a ~$245M incremental net depreciation expense to be recorded in Q4 2023. The company said this non-cash charge represents a write down of the EVs’ carrying values as of December 31, 2023 to their fair values.
- The U.S. oil and gas industry saw some more consolidation on Thursday, after Chesapeake Energy (CHK) and Southwestern Energy (SWN) announced a merger agreement in an all-stock transaction valued at $7.4B, or $6.69/share. The combination will create a firm with an enterprise value of about $24B that will likely be the largest U.S. natural gas producer. Chesapeake (CHK) stock was up nearly 3% in pre-market trading, while Southwestern (SWN) stock was down ~1%. The CHK-SWN deal comes just months after mega-mergers between Exxon Mobil (XOM) and Pioneer Natural Resources (PXD) and Chevron (CVX) and Hess.
- Shares of Citigroup (C) slipped more than 1% ahead of market open, after the lender said it had recorded a $1.3B charge in its Q4 2023 pretax results related to increases in transfer risk associated with exposures outside the U.S., mostly related to Argentina. Specifically, Citi (C) recorded a $720M reserve build in the quarter related to cross-border and cross-currency exposures in Argentina, and a $580M reserve build related to prolonged political and economic instability in Russia. The bank is set to report full Q4 results on Friday.
- Occidental Petroleum (NYSE:OXY) stock added more than 1% in pre-market trading. A regulatory filing after hours on Wednesday showed that Warren Buffett’s Berkshire Hathaway (BRK.A) (BRK.B) had now accumulated a 34% passive stake in Occidental (OXY), up from 28% previously. Separately, in another regulatory filing, OXY said that in November last year it was requested to temporarily halt certain operations in the eastern Gulf of Mexico. The company sees a cut to its Q4 2023 Gulf of Mexico oil and gas sales volume guidance due to the downtime, now anticipating 127 Mboed compared to a prior forecast of 152-158 Mboed. Total company production is still expected to remain within its provided outlook.
Market Trends
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