Check out the companies making headlines before the bell. Target – Shares plunged more than 17% after the Minneapolis-based retailer missed third-quarter earnings and revenue estimates and slashed its full-year guidance, just three months after raising that forecast. Target cited only a slight uptick in customer traffic and its CEO noted “lingering softness in discretionary categories.” Comcast – Shares rose more than 2% after the owner of NBCUniversal said it will spin off its cable assets, including CNBC and MSNBC, into a separate, publicly-held company . The spinoff is expected to take about a year, the Brian Roberts-led Comcast said. Goldman Sachs and Morgan Stanley advised the parent company. Delta Air Lines – The Atanta-based carrier fell more than 1% after reiterating its outlook for the fourth quarter . Delta expects mid-single digit sales growth next year, in line with analysts’ expectations. Nio – U.S. shares fell more than 2% after the Chinese electric vehicle maker posted lower-than-expected revenue for the third quarter. Nio sales totaled 18.67 billion yuan for the period , down 2.1% year-over-year. Analysts polled by FactSet were estimating 19.13 billion yuan. Dolby Laboratories – Shares soared nearly 15% after the audio technology company’s quarterly results topped Wall Street estimates. Dolby earned 61 cents per share in its fiscal fourth quarter, above analysts’ estimated 45 cents per share, according to FactSet. Dolby also raised its quarterly dividend 10% to 33 cents per share, payable Dec. 10. Robinhood – Shares rose more than 3%, extending Tuesday’s gains. On Wednesday, Needham upgraded the stock to buy from hold . The financial services platform said it’s acquiring TradePMR for about $300 million to boost its advisory capabilities. Keysight Technologies – The electronics test and measurement equipment maker climbed more than 9% following better-than-expected fiscal fourth-quarter results. Keysight also gave an optimistic forecast for the current quarter, expecting adjusted earnings of between $1.65 and $1.71 per share versus analysts’ consensus estimate of $1.57, according to FactSet. AppLovin – Shares advanced 2.3% after Piper Sandler initiated research coverage of mobile app developer with an overweight rating, and a price target implying the stock has more upside ahead – even after it surged more than 700% in 2024. Powell Industries – Shares of the electrical equipment company fell 13% after new orders in the fiscal fourth quarter fell to $267 million from $356 million in the third quarter. Fourth quarter revenue missed analysts estimates, according to FactSet, while earnings per share topped forecasts. Super Micro Computer – Shares moved more than 2% lower after soaring more than 31% on Tuesday. The server maker announced it hired BDO as its new auditor and submitted a plan to the Nasdaq Stock Market outlining how it will comply with listing requirements. Netflix – Shares gained almost 1% after Netflix said the boxing match last week between former heavyweight champion Mike Tyson and Jake Paul drew 108 million global viewers , making it the most-streamed global sporting event ever. — CNBC’s Alex Harring, Jesse Pound, Pia Singh and Sarah Min contributed reporting. Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.
Jonathan Gray, president and chief operating officer of Blackstone Inc., from left, Ron O’Hanley, chief executive officer of State Street Corp., Ted Pick, chief executive officer of Morgan Stanley, Marc Rowan, chief executive officer of Apollo Global Management LLC, and David Solomon, chief executive officer of Goldman Sachs Group Inc., during the Global Financial Leaders’ Investment Summit in Hong Kong, China, on Tuesday, Nov. 19, 2024.
Bloomberg | Bloomberg | Getty Images
An “industrial renaissance” in the U.S. is fueling demand for capital, Marc Rowan, CEO of Apollo Global Management said at the Global Financial Leaders’ Investment Summit in Hong Kong.
“There is so much demand for capital, [including through debt and equity] … What’s going on is nothing short of extraordinary,” Rowan said on Tuesday during a panel discussion.
This demand has been supported by massive government spending, particularly on infrastructure, the semiconductor industry and projects under the Inflation Reduction Act, said the asset manager, who is reportedly in the running for Treasury Secretary position under President-elect Donald Trump.
“What we’re watching is this incredible demand for capital happening against a backdrop of a U.S. government that is running significant deficits. And so the capital raising business, I think that’s going to be a good business,” he said.
Rowan added that the U.S. has been the largest recipient of foreign direct investment over the past three years and is expected to stay at the top spot this year as well.
Rowan and other panelists also identified energy and data centers — needed for artificial intelligence and digitization — as growth sectors requiring more capital.
Blackstone President and COO Jonathan Gray told the panel that data centers were the biggest theme across his entire firm, with the company employing billions on their development.
“We’re doing it in equity, we’re doing it financing … this is a space we like a lot, and we will continue to be all in as it relates to digital infrastructure.”
Fundraising and M&A recovery
Other panelists at the summit organized by the Hong Kong Monetary Authority said that capital raising was well-positioned to recover from a recent slowdown.
According to David Solomon, Chairman and CEO of Goldman Sachs, capital raising activity had reached peak levels in 2020 and 2021 amid massive Covid-era stimulus but later became muted amid the war in Ukraine, inflation pressures and tighter regulation from the Federal Trade Commission.
There has been a recent pick up in activity as conditions have normalized, along with expectations of friendlier regulation on dealmaking from the FTC under the incoming Donald Trump administration, Solomon said.
While there remains an inflationary backdrop and other risks in the current environment, Ted Pick, CEO of Morgan Stanley said that the consumer and corporate community are “by in large, in good shape” as the economy continues to grow.
“This environment has been one where, if you are in the business of allocating capital, it’s been great,” he said, adding that the group was now gearing up to get into “raising capital mode.”
“That is [the] hallmark of a growing and thriving economy, which is where the classic underwriting and mergers and acquisitions businesses take hold,” he said.
Solomon predicted that these trends would see “more robust” capital raising and M&A activity in 2025.
The Senate Judiciary Committee convened on Tuesday for a hearing on the alleged Visa–Mastercard “duopoly,” which committee members from both sides of the aisle say has left retailers and other small businesses with no ability to negotiate interchange fees on credit card transactions.
“This is an odd grouping. The most conservative and the most liberal members happen to agree that we have to do something about this situation,” committee chair and Democratic Illinois Sen. Dick Durbin said.
Interchange fees, also known as swipe fees, are paid from a merchant’s bank account to the cardholder’s bank, whenever a customer uses a credit card in a retail purchase. Visa and Mastercard have a combined market cap of more than $1 trillion, and control 80% of the market.
“In 2023 alone, Visa and Mastercard charged merchants more than $100 billion in credit card fees, mostly in the form of interchange fees,” Durbin told the committee.
Durbin, along with Republican Kansas Sen. Roger Marshall, have co-sponsored the bipartisan Credit Card Competition Act, which takes aim at Visa and Mastercard’s market dominance by requiring banks with more than $100 billion in assets to offer at least one other payment network on their cards, besides Visa and Mastercard.
“This way, small businesses would finally have a real choice: they can route credit card transactions on the Visa or Mastercard network and continue to pay interchange fees that often rank as their second or biggest expense, or they could select a lower cost alternative,” Durbin told the committee.
Visa and Mastercard, however, stand by their swipe fees.
“We consider them incentives, some people might consider them penalties. But if you can adopt new technology that reduces the risk and takes fraud out of the system and improves streamlined processing, then you would qualify for lower interchange rates,” said Bill Sheedy, senior advisor to Visa CEO Ryan McInerney. “It’s very expensive to issue a product and to provide payment guarantee and online customer service, zero liability. All of those things, and many more, senator, get factored into interchange [fees].”
The executives also warned against the Credit Card Competition Act, with Sheedy claiming that it “would remove consumer control over their own payment decisions, reduce competition, impose technology sharing mandates and pick winners and losers by favoring certain competitors over others.”
“Why do we know this? Because we’ve seen it before,” Mastercard President of Americas Linda Kirkpatrick said, in reference to the Durbin amendment to the 2010 Dodd-Frank Act, which required the Fed to limit fees on retailers for transactions using debit cards. “Since debit regulation took hold, debit rewards were eliminated, fees went up, access to capital diminished, and competition was stifled.”
But the current high credit card swipe fees for retailers translate to higher prices for consumers, the National Retail Federation told the committee in a letter ahead of the hearing. The Credit Card Competition Act, the retail industry’s largest trade association wrote, will deliver “fairness and transparency to the payment system and relief to American business and consumers.”
“When we think of consumer spending, credit card swipe fees are not the first thing that comes to mind, yet those fees are a surprisingly large part of consumer spending,” Notre Dame University law professor Roger Alford said. “Last year, the average American spent $1,100 in swipe fees, more than they spent on pets, coffee or alcohol.”
Visa and Mastercard agreed to a $30 billion settlement in March meant to reduce their swipe fees by four basis points for three years, but a federal judge rejected the settlement in June, saying they could afford to pay more.
Visa is also battling a Justice Department lawsuit filed in September. The payment network is accused of maintaining an illegal monopoly over debit card payment networks, which has affected “the price of nearly everything,” according to Attorney General Merrick Garland.
Check out the companies making headlines in extended trading. Keysight Technologies — Shares added more than 8%. The electronics test and measurement equipment company’s fiscal fourth-quarter results beat analyst estimates on the top and bottom lines. Keysight also issued a rosy outlook for the current quarter, anticipating adjusted earnings ranging from $1.65 to $1.71 per share, while analysts polled by FactSet called for $1.57 a share. Dolby Laboratories —The audio technology company advanced 10% after its fiscal fourth-quarter earnings of 61 cents per share topped Street estimates of 45 cents per share, per FactSet. Dolby also increased its dividend by 10% to 33 cents a share. Powell Industries — The manufacturer of electrical equipment slipped almost 14%. Net new orders for fiscal 2024 came in at $1.1 billion, compared to $1.4 billion in the year-ago period. The company noted that the decline was largely due to the inclusion of three large megaprojects in Powell’s oil and gas and petrochemical sectors in fiscal 2023. Azek Company — Shares of the residential siding and trim company ticked up 2% after its fiscal fourth-quarter results beat analyst estimates. Azek reported earnings of 29 cents per share on revenue of $348.2 million. Analysts surveyed by FactSet were looking for earnings of 27 cents per share and $339.1 million in revenue. La-Z-Boy — The furniture company gained nearly 3% following fiscal second-quarter results. La-Z-Boy reported earnings of 71 cents per share on revenue of $521 million. That’s an improvement from the year-ago period, in which the company posted earnings of 63 cents per share and revenue of $511.4 million. La-Z-Boy also upped its quarterly dividend by 10% to 22 cents per share.
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